Saudi Arabia Lays Out Big Plans for Gaming
Spreading Around the Money
- $18.7 billion for Publishers: The largest tranche of money will be for minority stakes in game publishers
- Saudi Arabia’s PIF already owns several billion dollars worth of shares in Activision-Blizzard, EA, Take-Two, Nintendo, Embracer Group, Nexon, & Capcom
- $13.3 billion for an Acquisition: The most impactful part of the plan would be the “acquisition and development of a leading game publisher to become a strategic development partner”
- $533 million for esports: Building off of Savvy Games’ ownership of leading esports conglomerate ESL Faceit, the Kingdom plans to further invest in esports and gaming startups
- $5.3 billion: The final batch of money will go toward strategic partnerships with established gaming companies
The obvious upside here is that Saudi Arabia will be investing oodles of money into the gaming industry. Most of it figures to go to established publishers and developers, rather than indie devs.
- Who Will be Acquired: It’s hard to say who it will be, but $13.3 billion should be enough for a larger publisher such as Ubisoft or Square Enix, especially in a cooling market
- Ubisoft may not be a viable acquisition, however, given Tencent recently increased its shares in the French publisher
There’s no mincing words here, Savvy Gaming Group is a public relations albatross. The chairman of the board for Savvy Gaming is Saudi Arabian Crown Prince Mohammed bin Salman, who has been implicated in all manner of human rights violations, to put it diplomatically.
There is also a fundamental issue with Saudi Arabian investment in this case. The kingdom isn’t primarily focused on making a profit, it’s about attracting business. For those receiving the money, this won’t matter. But a new big spender with little interest in profit is a recipe for creating an investment bubble and driving up costs for competing companies.
Finally, there is the matter of data collection. Video game companies hoover up massive amounts of user data, given nearly every game today requires a user account. Regulators and gamers may not be keen on seeing that information fall into the hands of country that heavily surveils critics.