Saudi Arabia is pivoting to video games in a bid to further diversify its economy. The country is allocating $40 billion to the sector not just to empower its youth population but also to position itself as a leader in the global gaming industry.
Recently, the Saudi Public Investment Fund (PIF), the country’s sovereign wealth fund, made a substantial $5 billion investment in California videogame publisher Scopely. Additionally, it increased its stakes in industry giants Nintendo and Electronic Arts.
Saudi is also offering competitive salaries to gaming professionals to help build its local video game industry.
In support of Vision 2030
This increased focus on video games aligns with Saudi’s Vision 2030, initiated by Crown Prince Mohammed bin Salman. The comprehensive strategy aims to broaden the economy, which has long been steeped in oil-related products. In the past months, the country has also been intensifying its investments in other areas as part of the plan. These include sports, technology, and tourism.
Saudi Arabia further solidified its ambitions in the gaming sector when it recently hosted the popular Gamers8 conference in Riyadh. This is considered one of the world’s largest esports and gaming events.
Organized by the state-backed Saudi Esports Federation, Gamers8 boasted a staggering $45 million prize pool and attracted thousands of gamers, professionals and amateurs alike.
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Going to where young Saudis are
Over 60 percent of Saudi’s population is under the age of 30. According to recent estimates, close to 70 percent of Saudi Arabians are actively engaged in video gaming. Moreover, data from Niko Partners, shows that the youth population in the country is spending over SAR3.8 bn on video games annually.
Bernard Haykel, a professor of Near Eastern studies at Princeton University, speaking to The Wall Street Journal said, “Saudi’s new strategy is all about ‘meeting young Saudis where they’re at’.”
“This is a way to improve the brand of Saudi Arabia around the world by attracting tourists and helping build a service sector that is a huge element in the economic diversification strategy,” he further noted.
The investment in the video game industry could offer more economic opportunities, especially for young Saudis interested in pursuing careers in video game development and esports. It also presents potential international collaboration and partnerships.
Saudi Arabia eyes to produce 30 video games and generate around 40,000 job opportunities by the year 2030. This is part of the country’s National Gaming and Esports Strategy.
Regional interest in global gaming
Beyond Saudi, more countries in the Middle East are also paying attention to this industry.
In the UAE, Abu Dhabi Gaming and the Dubai Multi Commodities Center (DMCC) are at the forefront of this effort. In particular, DMCC teamed up with Yalla Esports to inaugurate the DMCC gaming center in December. The center provides gaming enterprises with opportunities for funding and access to industry professionals.
According to DMCC, gaming revenue in the Middle East and North Africa region could reach SAR22.5 bn by 2027. This is roughly twice 2021’s figures.
“The Middle East is a key player in the global gaming industry, with an impressive penetration rate and a strong commitment from governments to invest in the sector,” expressed Alexander Schudey. He is a managing director and partner at Boston Consulting Group, a global management consulting firm.
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