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HomeBusinessSaudi Arabia’s Ambitious Expansion into the Gaming Industry

Saudi Arabia’s Ambitious Expansion into the Gaming Industry

The Kingdom's Strategy to Become a Global Gaming Powerhouse

December 26, 2023
in Business
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The Kingdom of Saudi Arabia has been making significant investments in various sectors, including sports and entertainment. One of the most recent developments is the merger of Saudi-backed LIV Golf with the Professional Golfers’ Association, funded by the Saudi Public Investment Fund (PIF) with over a billion dollars. The country has also attracted global sports stars to play in its soccer league. Apart from sports, Saudi Arabia has shown interest in the movie industry, hosting pay-per-view WWE events, and entering the gaming industry, which is worth $187 billion globally.

Through the PIF-funded Savvy Games Group, Saudi Arabia has made significant minority investments in game industry giants like Nintendo, Take-Two, EA, and Activision Blizzard. The country has also acquired mobile developer Scopely for $4.9 billion and esports organizations ESL and Faceit for $1.5 billion. Saudi Arabia aims to become a gaming powerhouse and transform itself into a hub of game development and esports. The investment is part of the country’s plan for economic diversification and social transformation.

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The investment in video games is not unprecedented. Countries like South Korea and China have invested heavily in the industry, leading to the emergence of new gaming hubs. While the acquisition of a leading publisher may be relatively straightforward, entering the esports industry poses more significant risks due to the economic downturn and declining viewership. However, Saudi Arabia’s move into esports is seen as having impeccable timing, as many organizations are in need of funding and may not turn down significant investments.

Investing in video games is part of Saudi Arabia’s broader plan for economic diversification and maintaining political stability. The country recognizes the need to diversify its economy, as it heavily relies on oil and gas. Additionally, with a large youth population susceptible to radicalism, the government aims to provide alternative forms of entertainment and engage with its citizens through video games. Video games also serve as a form of diplomacy, allowing Saudi Arabia to maintain and broker power internationally.

While Saudi Arabia’s investments in various industries may bring economic benefits, there are concerns about censorship and self-censorship in companies owned by the kingdom. Critics argue that investments from Saudi Arabia are not purely business-oriented and come with strings attached. However, the financial clout of Saudi Arabia is already being felt in the gaming industry, as seen in the fallout between Embracer and Savvy Gaming Group, resulting in job losses for developers.

Overall, Saudi Arabia’s ambitious expansion into the gaming industry is part of its broader strategy for economic diversification, social transformation, and maintaining political stability. The country aims to become a global gaming powerhouse and leverage the passionate fandoms of sports and gaming to enhance its global reputation.

Tags: esportsgaming industryinvestmentsaudi arabiasportsvideo games
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