Saudi Arabia is making a $38 billion bet on the potential of its gaming industry, as the country seeks to reduce its dependence on oil revenues, according to Bloomberg.
The Saudi Arabian Public Investment Fund is attempting to establish the country as a significant player in the global gaming market, which has a valuation of $184 billion.
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While initially focused on the esports industry, the fund has now focused its attention on developing, publishing and acquiring high-quality games, as well as supporting the gaming industry in Riyadh, the capital of the country.
The Fund's subsidiary, the Savvy Gaming Group, is taking the lead in accomplishing these objectives. In a conversation with the Bloomberg, Brian Ward, Savvy's CEO and former executive at big gaming companies such as Electronic Arts Inc EA, Activision Blizzard Inc ATVI and Microsoft Corp MSFT, said that we are now more of an esports company than a games company. We focus on game publishing and development this year. The company's portfolio includes five operating firms, one of which is the Savvy Games Studios. The studio was founded a year ago with 45 employees and aims to develop a mobile game before moving on to a console game.
Ward believes that the studio will eventually become a top-tier player in the industry, but he admits that building a game studio from scratch is super hard. With an investment of $13 billion to acquire a game publisher, the company has already made multibillion-dollar investments in gaming giants like Activision Blizzard, Tencent Holdings ADR TCEHY and Nintendo ADR NTDOY.
"We would like to start working with these companies, and ask how we can work together on publishing in the Middle East and North Africa to run their esports businesses, or develop new IP," Ward said.
In February, the fund increased its stake in Nintendo to 8.3%, becoming the largest outside shareholder.
There are approximately 21 million gamers in the country, which is about 58% of the population, according to analysts at Niko Partners. This figure is slightly lower than that of the U.S., where 66% of the population is gamers.
The gaming market in the Middle East and North Africa is projected to grow significantly in the next few years. It is expected to increase by 56% by the year 2026 to reach $2.79 billion.
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