Saudi Arabia is investing $37.8 billion in the video game industry, a move that will see it edge closer to becoming a gaming hub. This is part of the nation’s plans to diversify the economy from oil as outlined in the Kingdom’s Vision 2030 plan.
The investment which will be made through the Public Investment Fund-backed Savvy Gaming Group is geared towards establishing the country as a major player in the gaming industry and jumpstarting esports in the Middle East. The intention made the news in September 2022 and was reported by Axios.
According to last year’s report, Savvy mulled buying different gaming companies and starting some of its own. According to the Kingdom’s press agency, Savvy had set aside $13 billion “for the acquisition and development of a leading game publisher to become a strategic development partner.”
Also, Savvy set aside $18 billion for minority investments. Saudi Crown Prince Mohammed bin Salman was credited for the announcement which is expected to create 250 gaming companies and create over 39,000 jobs.
Timeline of Savvy’s investments toward making Saudi Arabia a gaming hub
Savvy first came into the limelight in January 2022 when it acquired esports organizations ESL and Faceit for a whopping $1.5 billion. Later in March last year, the group’s CEO Brian Ward said the group had the biggest startup capital ever provided by the PIF. Ward is an ex-executive at Activision and EA.
The group nursed the ambitious plan of building esports organizations in the Middle East as well as studios that would make games for a global audience. In June, Savvy revealed another $1 billion investment in The Embracer Group, a Swedish gaming conglomerate.
The PIF has also made other multi-billion dollars investments in Take-Two, Electronic Arts, Nintendo, and Activision Blizzards. Surprisingly, the move to make Saudi Arabia a gaming hub has been criticized by human rights groups saying it is only an attempt to sanitize the Kingdom’s poor human rights records. However, Ward dispelled the rumor through an interview with Axios.
“I’m not over there on an image makeover project,” Ward told Axios. “We’re there to build a real commercial entity that’s a powerhouse, hopefully, in gaming and aimed at developing and growing the game sector.”
In a recent interview with Bloomberg, Ward disclosed the new direction of the Savvy gaming conglomerate towards making Saudi Arabia a gaming hub.
“We are now more of an esports company than a games company,” Ward said. “What we are doing this year is focusing more on game publishing and development.
Saudi Arabia has increased its stake in Nintendo
In May last year, the PIF’s filing showed that it had acquired a 5.01% stake in Japan’s Nintendo Co Ltd. In January 2023, it was reported that the PIF has increased its stake in Nintendo to 6.07% making it the largest foreign investor in Nintendo.
According to PIF, the stake in Nintendo was for investment purposes. The same is said about its stake in Koei Tecmo, Capcom, and Nexon. After the news that PIF acquired a 5% stake in Nintendo went public, the gaming company came out to say it was unaware of the investment and only learned about it from news reports. The company is yet to comment on the latest development.
What we do know is that acquiring gaming studios and publishers may not be enough. According to an analysis from Niko Partners, there are about 21 million gamers in Saudi Arabia. This translates to 58% of the Kingdom’s population—which is close to the 66% recorded in the United States.
Interestingly, people are rarely aware that there are that many gamers in Saudi Arabia. The gaming market in North Africa and West Asia is expected to grow by 56%, hitting $2.79 billion by 2026.
To make the Middle East a gaming hub, the Kingdom needs to invest more in publicity and organizing large gaming events. Gradually, people’s perception of the Kingdom will begin to change. This is not going to be a sprint, but rather, a marathon.
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