Silver Lake and PIF Reportedly Discuss Buying Unity Outright

Unity Software, the company behind the Unity engine, may be about to add another chapter to the games industry's wave of mergers and acquisitions. According to reports, the company is in talks over a full takeover with US private equity firm Silver Lake Partners and Saudi Arabia's sovereign wealth fund, PIF.

The talks are ongoing and no deal has been finalized. Still, if it goes through, the transaction would rank among the largest acquisitions in the history of the games industry and would further widen the scope of the Saudi government's investments in gaming.

What the offer looks like

Unity is publicly traded, and Silver Lake already holds an eight percent stake in the company. This time it is acting alongside PIF, leading a consortium of investors. Who the other members of the group are is not yet known.

The offer reportedly values Unity at $25 billion, against a current market capitalization of $21.5 billion. At those figures, the deal would be the third-largest in the games industry, behind only Microsoft's acquisition of Activision and the sale of EA.

PIF's growing footprint in gaming

PIF is no stranger to the sector. The fund completed its acquisition of EA this summer, and Silver Lake and Affinity Partners, the firm run by Donald Trump's son-in-law Jared Kushner, also took part alongside PIF in both the EA and Niantic deals.

Mobile game developer Scopely is also among the companies PIF owns, and the fund holds stakes in Nintendo, Capcom and Take-Two Interactive. As the country works to reduce its dependence on oil, it is using gaming as a soft power tool; its ownership of Evo and its own eSports World Cup stand out as parts of that strategy.

Why it matters to developers

Unity is the second most widely used game engine among developers after Unreal Engine. Its reach goes beyond games, with uses in fields such as engineering and film production. A change in the company's ownership therefore directly concerns the many studios that depend on the engine.

Some developers have voiced uncertainty about the current AI-focused direction of Epic Games' Unreal Engine, and a change of hands at Unity could add another layer of uncertainty. Whether the talks will conclude, and how a possible transfer would affect the engine's future, remains unclear for now.