The Saudi Arabian government plans to invest $38 billion to turn the country into a new hub for the video game industry, according to Bloomberg. This is part of the country’s strategy to diversify its economy in order to get rid of its dependence on oil.
Saudi Arabia has the 19th largest gaming market in the world, with an annual growth rate of 41.1%. in 2020, the country had more than 21 million players and gaming revenues reached more than $1 billion. The MENA gaming market is expected to grow 56% to $2.79 billion by 2026.
The Saudi sovereign wealth fund PIF, a wealth fund chaired by Crown Prince Mohammed bin Salman, whose subsidiary Savvy Gaming Group is a major force in the gaming industry, is reportedly planning to invest $38 billion to create a hub for the video game industry, said Brian Ward, CEO of Savvy Gaming Group: “We are now more of an eSports company than a gaming company. Our focus this year is on game distribution and development.”
Savvy Gaming Group has five operating companies, one of which is a game studio with about 45 employees. The studio plans to develop a mobile game first and then a console game. Ward hopes it will grow into a top-notch studio, but admits that “it’s very difficult to build a game studio from scratch.
To achieve its ultimate goal of making Saudi Arabia a global entertainment hub by 2030, Savvy Gaming Group also intends to acquire or partner with other international or local game studios or publishers. Ward said they have about $13 billion to spend on a game publisher, but he thinks EA is too big to consider.
In addition, Savvy Gaming Group is localizing and distributing games in the Middle East and North Africa through its investment arm, Nine66.
The Saudi sovereign wealth fund has invested billions of dollars in a number of well-known gaming companies around the world, including Nintendo, Tencent, Activision Blizzard, Embracer, Capcom and Nexon. the fund has increased its stake in Nintendo several times and now holds 8.26%, making it the company’s largest external shareholder.
Saudi Arabia’s Crown Prince Mohammed bin Salman has a goal of making the country’s economy less dependent on oil. And the video game industry, a market larger than the movie and music industries combined, is certainly an area worth investing in.
