Saudi Arabia says it will spend $13bn to acquire ‘a leading game publisher’
The country’s Savvy Games Group claims it will invest a further $37.8 billion in the games industry
Saudi Arabia will invest a further $37.8 billion in the games industry acquisitions, including around $13 billion to acquire “a leading game publisher”, according to state news.
The investments will be made via the country’s Savvy Games Group, which is owned by sovereign wealth fund PIF, as it aims to become a major player in the games industry.
The investments will include 70 billion riyals ($18.6bn) to take minority stakes in several “key companies” that support Savvy’s game development agenda, and 50 billion riyals ($13.3bn) to acquire “a leading game publisher to become a strategic development partner”.
If accurate, the $13 billion acquisition figure would likely fall short of the asking price the very largest third-party publishers would command, such as EA and Take-Two, but it could potentially secure a deal for most others.
In addition, Saudi Arabia state news said 2 billion riyals ($481m) would be reserved for investments in “industry disruptors to grow early-stage games” and esports companies. Finally, 20 billion riyals ($4.8bn) will be invested into “mature industry partners” who add value and expertise to Savvy’s existing portfolio.
Saudi Crown Prince Mohammed bin Salman said in a statement: “Savvy Games Group is one part of our ambitious strategy aiming to make Saudi Arabia the ultimate global hub for the games and esports sector by 2030.
“We are harnessing the untapped potential across the esports and games sector to diversify our economy, drive innovation in the sector and further scale the entertainment and esports competition offerings across the Kingdom”.
PIF, which is a sovereign wealth fund chaired by crown prince Mohammed bin Salman, has invested in numerous game developers in recent years.
That includes this year’s purchase of a 5.01% stake in Nintendo (which Nintendo subsequently claimed it first learned about from news reports), 5% stakes in Capcom and Nexon, and billions invested in stock for Activision Blizzard, Electronic Arts, Embracer and Take-Two.
Saudi Arabia officials have said the investments will help modernize the kingdom, but they have come with negative fallout due to the country’s highly criticised human rights abuses.
Notably, the crown prince has been accused by US Intelligence of ordering the murder of journalist Jamal Khashoggi. The country is also engaged in a controversial war in Yemen, and has historically cracked down on female activists and homosexuality.
The head of Saudi Arabia’s gaming investment arm has dismissed such concerns as “older impressions” of the country.