🔗 Share this article

Electronic Arts made headlines lately with the announcement of a considerable transaction worth around 55 billion dollars to take the company private. Stakeholders such as investment fund the Silver Lake fund, financial firm Affinity, and Saudi Arabia's sovereign wealth fund might significantly alter the future of Electronic Arts.

This transaction is a single component of the Kingdom's multi-billion dollar commitments in the gaming and entertainment sectors. In recent months, the sovereign fund took over the popular mobile game developer the Niantic company through game publisher Scopely and its Savvy Games. It also purchased the Evo Championship through the Qiddiya company, a subsidiary of the Public Investment Fund. The Savvy Games Group also owns the ESL FACEIT organization, that united two major tournament hosts.

The Kingdom has committed substantial funds to purchase shares in companies such as Activision Blizzard, Capcom, Embracer Group, Nexon Co., Nintendo, and Take-Two Interactive lately. Additionally holds fighting game maker SNK Corporation, control that a number of fans of the genre believe influenced the content of the company's most recent game, Fatal Fury: City of the Wolves.

Why is Saudi Arabia so deeply involved in gaming? A key factor of the answer economic diversification. But the Kingdom is investing heavily on the gaming industry for other reasons also.

What is the Public Investment Fund of Saudi Arabia?

The Public Investment Fund is the state-owned investment fund of the Kingdom. Created in the early 1970s, the wealth fund is under the direction of Crown Prince Mohammed bin Salman, Saudi Arabia's primary leader since 2015. According to estimates, Saudi Arabia’s Public Investment Fund oversees about nine hundred twenty-five billion dollars in investments.

What is Savvy Games?

Savvy Games Group was established in 2021 by the PIF. The group was founded with the Kingdom's “broadening economic bases and societal change” as an objective, per Chief Executive Officer the CEO. The Crown Prince Mohammed bin Salman, the Kingdom's leader, allegedly a “dedicated gaming enthusiast,” serves as the PIF’s head.

This group says it is “dedicated to promoting sustainable expansion and advancement in the gaming and competitive gaming sector via calculated investments, funding, and business initiatives.” Its goal is to reach “leadership status in the gaming sector” by the next decade, via rapid and aggressive growth.

Why games?

In addition to the Crown Prince's alleged enthusiasm for video games, the Kingdom is hoping to put money into a expanding market. Per reports, the PIF anticipates to see gaming industry earnings top three hundred billion dollars by 2028.

Saudi Arabia is additionally aiming that its Qiddiya gaming hub, within the Qiddiya initiative in Riyadh, will emerge as a center for esports and gaming. The goal is to “attract millions of tourists each year to its venues by the year 2030, and incubate 30 prominent video game development companies.” This forms part of a master plan called the Gaming and Esports National Plan, which plans to foster 250 firms, establish many thousands of jobs, and add 13.3 billion dollars to the economic output, based on the Public Investment Fund.

But the gaming sector is only one part of the Public Investment Fund's investment strategy, which seeks to broaden the Kingdom's economy into different sectors, such as tourism, the entertainment business, and the tech sector. The country’s economic system is largely dependent on the petroleum industry, which represents about forty percent of GDP. Saudi Arabia is preparing for a future beyond oil world.

Nonetheless, the fund's investments in game publishers, development studios, and competitive gaming entities have been controversial, resulting in accusations comparable to the PIF “reputation laundering” — funding in sporting events including the World Cup and the establishment of the LIV Golf tour to boost Saudi Arabia’s international image. The country’s record of rights violations and MBS's reported directing of the assassination of journalist Khashoggi have consistently damaged international opinion of the kingdom. Whether the video game industry could possibly polish the kingdom’s reputation is uncertain, but the likely economic returns may be a more important goal.