Saudi Arabian government to invest $38 billion into the gaming industry

Savvy Gaming Group, a subsidiary of the Saudi Arabian government’s Public Investment Fund (PIF), is planning to invest a total of $38 billion to grow the country’s gaming industry after already stepping into the struggling esports scene.

The details:

• As reported by Bloomberg, the Savvy Gaming Group is looking to work with companies that it has already invested in to develop new IPs, jointly publish games in the Middle East and Africa (MENA), and operate esports businesses. This is part of its plan to shift from strictly esports to the wider gaming space in an attempt to make Saudi Arabia, particularly Riyadh, the next hub for the industry by 2030. According to Bloomberg, Savvy is planning to acquire a major publisher using a $13 billion budget, but has ruled out Electronic Arts (EA) as it is “too big,” but would consider making a publicly listed publisher private if the right offer is there.
• Since the publication of Bloomberg’s article, Savvy has announced that it will be acquiring mobile publisher and developer Scopely for $4.9 billion, completing another one of its goals. In 2022, the total revenue from mobile titles reached a whopping $92.2 billion, which equates to 50% of the overall gaming market worldwide, so Savvy’s investment certainly looks like a smart one. Scopely will continue to operate autonomously under Savvy, and will now be able to benefit from direct funding from the PIF to create future titles that it plans to bring to PC and consoles using cross-platform play. Speaking on the acquisition, Savvy’s CEO, Brian Ward, said “Scopely is one of the fastest-growing games companies today, and we have long admired their ability to build loyal, engaged player communities.”
• The country’s PIF, chaired by crown prince Mohammed bin Salman, has already been used to invest in EA, Take-Two Interactive, Nintendo, and Embracer Group. The state’s stake in Nintendo began at 6% before it recently upped its investment to 8.26% in February, making it the biggest outside investor for the Japanese company. Its investment into Embracer Group was also huge after acquiring a massive $1 billion stake that equated to around 8.1% of its shares, with Embracer’s CEO seeing the investment as an opportunity to expand its reach in the MENA region using a “regional hub” in Saudi Arabia. These investments have been met with backlash from gamers as many question the morality of taking investments from a state with a poor human rights record, with its esports investments being referred to as “esportswashing.”

Other industry news:

• Counter Logic Gaming (CLG) is rumored to have been sold, with its League of Legends franchise spot heading to NRG Esports. Reports of "seemingly all" of CLG's employees being laid off began circulating on April 4, implying that the company's operations may be suspended shortly. Madison Square Garden Sports (MSG), the parent company of CLG, has since commented on the situation, stating that it is "streamlining CLG’s operations to better position the company for long-term success."
• Capcom’s share prices have hit an all-time high following the success of Resident Evil 4’s remake. The publisher's stock rose to ¥4,865 ($36.42) on the Tokyo Stock Exchange around noon on Monday, a significant improvement on the ¥390 ($2.92) low it experienced just a decade ago.