To diversify its economy away from oil, Saudi Arabia is investing $38 billion in the video game sector. With this investment, which will be made through its Public Investment Fund (PIF), the nation hopes to become a significant player in the $184 billion global gaming market.
The Saudi Arabia fund’s subsidiary Savvy Gaming Group will be in charge of the initiative. Savvy initially concentrated on the eSports sector, but after realizing its difficulties, it changed its direction to game publishing and development.
“We are now more of an eSports company than a games company,” Savvy Chief Executive Officer Brian Ward told Bloomberg. “What we’re doing this year is focusing more on game publishing and development.”
Saudi Arabia has a rapidly expanding gaming population despite having almost no presence in the world’s game development industry.
Niko Partners analysts estimate that there are 21 million gamers in the nation. According to the report, that amounts to about 58 percent of the world’s population, compared to 66 percent in the US. It also stated that the games market in West Asia and North Africa is anticipated to increase by 56 percent to $2.79 billion by 2026.
Saudi Arabia’s PIF has already invested billions of dollars in gaming companies like Tencent Holdings, Activision Blizzard, and Nintendo, becoming the company’s largest outside shareholder with an 8.3 percent stake.
To achieve its ultimate goal of assisting the nation in becoming a global entertainment hub by 2030, Saudi Arabia’s Savvy plans to acquire studios or publishers, including those located outside the country. Ward would think about taking another publicly traded game publisher private, but Savvy has $13 billion to spend on the acquisition of a game publisher.
In a competitive market where well-known companies like Electronic Arts are cutting staff, Savvy’s plans are ambitious. Savvy, however, is optimistic that Saudi Arabia’s investment in the gaming sector will pay off in the long run and that the nation will emerge as a significant player in the global gaming market, according to the report.