Saudi Arabia is venturing into the gaming sector in full force, seeking to become a global hub for gaming. This is part of its ongoing economic diversification efforts aligned with its Vision 2030 strategy.
Digitization plays a pivotal role in achieving the national transformation milestones sought by the National Transformation Program (NTP). In its vision, Saudi Arabia will actively seek other sources of income, far from the world of oil. This will help strengthen the economy and encourage investments in the country. The kingdom expects that the gaming sector will contribute SAR50 billion ($13.3 billion) to the country’s gross domestic product by 2030.
In addition, Saudi Arabia has 21 million players, constituting about 58 percent of the population. The value of the gaming market in Saudi Arabia reached $1 billion in 2021. That is the highest among the region’s countries, according to a MENA gaming market report by Niko Partners. Meanwhile, the value of the video game industry around the world is estimated at $180 billion annually.
On the other hand, a report issued last year by PwC expected that global video game revenues would exceed about $300 billion. This constitutes more than a tenth of total spending on entertainment and media by 2026.
It is expected that the gaming market in the MENA region will grow by 56 percent to $2.79 billion by 2026. The kingdom sees these numbers as a greater incentive that will push it to invest more in its gaming sector. That is especially since 63 percent of Saudi society is under the age of 30. This means that Saudi society is young making it the perfect environment for investments of this kind.
Accordingly, Saudi Arabia entered the gaming world at the beginning of 2020. Then, in June 2023 it expressed its interest in investing $38 billion in the Saudi gaming sector. In addition to the government, the private sector in Saudi has also shown a keen interest in investing in the sector.
The most prominent companies in the gaming sector in Saudi Arabia:
Saudi Public Investment Fund (PIF)
The Public Investment Fund finances projects of strategic value to the Saudi national economy. In line with Vision 2030, it has focused greatly on investing in technology. Therefore, it has invested $45 billion in SoftBank to create a technology investment fund worth $100 billion. Since 2020, PIF began purchasing shares and stakes in the largest video game manufacturing companies around the world. That includes Electronic Arts, Take-Two Interactive, and Nintendo, one of the three largest companies that manufacture electronic games.
The Saudi PIF strengthened its control over Electronic Arts, raising its stake from 5.1 to 5.8 percent after acquiring two million shares near the end of 2022. After purchasing about 3 million shares, the fund’s investment in Take-Two also jumped from 5.3 percent to 6.8 in 100 in 2022. As of February 2021, the Public Investment Fund has invested about $3.3 billion in Electronic Arts, Take-Two, and Activision Blizzard.
In May 2022, Saudi Arabia acquired a large stake of 5.01 percent in Nintendo. This followed investments made by the fund in other gaming companies, including SNK, Take-Two, Activision, and Electronic Arts.
The Kingdom has gradually increased these shares, as it recently raised its investments in Nintendo to 8 percent. The maker of the famous “Mario” game sold an additional 1.01 percent of his stake to the Saudi sovereign fund.
Savvy Gaming
Similarly, the Savvy Games group, affiliated with the Saudi PIF, was established in January 2022. It bought around 100 million shares worth $1 billion from the Swedish Embracer gaming group.
Savvy Group is owned by PIF with a value of $700 billion and headed by CEO Brian Ward.
It aims to invest $39 billion in the gaming industry and hopes to establish 250 companies locally. Additionally, one of its goals is to create 39,000 job opportunities in the next seven years. Earlier this month, the group completed the $4.9 billion purchase of Scopely.
The Savvy Games group acquired a large stake in the Chinese VSPO, the Swedish Embracer group, and was able to acquire the American Scopely.
“NEOM” and “MBC”
MBC Group and NEOM launched the first studio in the region to produce high-quality AAA video games in early 2022. The two groups explain that the sector’s market value, in the kingdom and the region, has reached $6 billion. American. NEOM is working to establish a regional center for this sector, talents, creators, and various types of cooperation. It will be a unique integrated center that harnesses the latest technologies. In addition, it will utilize advanced practices to stimulate creativity and opportunities for business and project development.
Read: Saudi Arabia to establish SAR1 bn in satellite manufacturing facility
stc Group
stc Group announced the launch of the stc Institutional Investment Fund (CIF). It will target emerging projects in several fields, including financial technologies, cybersecurity, artificial intelligence, and digital games. It will also include fields like the Internet-of-Things, blockchain, and other promising sectors.
The CIF also established an electronic gaming arm, stc play. During its participation in the Next World Forum (NWF), stc play signed a Memorandum of Understanding (MoU) with LG. It also signed a sponsorship contract with the team Geekay Esports. The memorandum with LG involved the exchange of basic data and information related to the evaluation of proposed projects between the two parties, while the sponsorship of the “Geekay Esports” team focused on supporting stc play by holding special tournaments for the platform. The agreement also includes creating content for the platform and providing a non-exclusive global license to use the stc play brand. Moreover, it involved displaying the brand publicly as well as transmitting and broadcasting it.
Furthermore, stc play’s gaming initiatives are an integral part of its commitment to the development of gaming platforms. This opens new horizons for interaction and communication on a global level in this promising industry.
In conclusion, the gaming sector in Saudi Arabia has become a serious attraction for Arab and foreign investors. The development, expansion, and share purchase projects that have been implemented are the beginning of Saudi Arabia’s Vision 2030. Will the goal be achieved and Saudi Arabia become a global hub for video games?
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