Saudi Arabia Is Spending $38 Billion on Video Games
Saudi Arabia Is Spending $38 Billion on Video Games, Saudi Arabia is investing $38 billion to become a global gaming hotspot, according to the country’s government. This is a role of the government’s broader scheme to reduce its dependency on the energy industry. In keeping with this strategy, the Public Investment Fund of Saudi Arabia intends to have a major effect on the $184 billion global gaming industry. Savvy Gaming Group, a subsidiary of the fund, has changed its attention from eSports to developing, publishing, and purchasing high-quality video games. This is to assist the gaming industry in Riyadh expand.
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“We are now more of an eSports company than a games company,” Brian Ward, CEO of Savvy Gaming Group, told Bloomberg News. The team is setting its sights on video game creation and distribution this year. Long-established companies like Electronic Arts are cutting costs by laying off workers because of the industry’s difficult environment. Despite this, the Public Investment Fund has made large bets on industry heavyweights like Nintendo, Tencent Holdings, and Activision Blizzard.
In February, the investment firm increased its investment in Nintendo to 8.3%, becoming the largest external stockholder of the company. Former Microsoft, Activision, and Electronic Arts executive Ward moved to Riyadh and became CEO of Savvy Gaming Group as the number of supporters in Saudi Arabia increased. The analysts at Niko Partners think that there are approximately 21 million gamers in Saudi Arabia or approximately 58% of the population. The number percents is lower compared to the 66% of all Americans who play video games. The market for video games in West Asia and North Africa is projected to increase by 56 percent to $2.79 billion by 2026.
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Savvy’s CEO, Brian Ward, thinks that acquiring studios or publishers is the quickest way to reach its “ultimate objective” of helping Saudi Arabia become a worldwide entertainment hub by 2030. Ward is open to the idea of taking another publicly traded game publisher private, and the group has a total of $13 billion to spend on an acquisition.
Professionals and gamers alike are worried about Saudi Arabia’s engagement in the esports business because of the country’s history of human rights abuses. The 2022 acquisition by Savvy Gaming Group of an 8% share in video game holding company Embracer Group AB is a prime example of this phenomenon.
Despite the setback, many forecast a return in 2023 due to the packed release calendar in the video game business. The industry had a 4.3% drop in sales in 2022, but 2023 looks like a year of development and recovery.
In Conclusion
Saudi Arabia invests heavily in video games because it anticipates a bright future. Video games have enormous potential since Americans spend $36 billion on them. Mobile gaming and esports interest are likely to boost the video game business. Saudi Arabia believes investing in the video game sector would boost the economy, generate employment, and attract fresh talent. Saudi Arabia’s money will impact the gaming industry’s development.