The summer saw Saudi Arabia dominate the realm of sports, merging its backed LIV Golf with the Professional Golfers’ Association, heavily funded by the Saudi Public Investment Fund (PIF) to the tune of over a billion dollars. This trend extended to soccer, with the kingdom attracting global superstars like Karim Benzema, Neymar, and Jordan Henderson to play in the scorching desert, despite facing criticism for ‘sportswashing’. Beyond sports, Saudi Arabia ventured into the movie industry, launching the Red Sea International Film Festival, and hosted pay-per-view WWE events. However, their foray into the gaming industry, valued at $187 billion globally, while aggressive, seemed less overt compared to their sports endeavors.
Stacking up minority investments in renowned companies like Nintendo, Take-Two, EA, Activision Blizzard, Saudi Arabia, through the PIF-funded Savvy Games Group, made significant acquisitions such as mobile developer Scopely for $4.9 billion and esports organizations ESL and Faceit for $1.5 billion. With earmarked funds of $13 billion for acquiring a leading game publisher and additional billions for more minority investments, the kingdom is injecting oil money swiftly into the gaming industry.
The objective, as stated by Savvy CEO Brian Ward, is to establish Saudi Arabia as a gaming “powerhouse,” transforming the nation into a center for game development and esports. This move aligns with the country’s strategy for economic diversification and societal change, utilizing traditional tactics of “bread and circuses” to strengthen its domestic political standing while staying relevant in a world moving away from fossil fuels.
The substantial investment in gaming isn’t unprecedented in terms of strategic planning, drawing parallels to how South Korea’s investment in internet infrastructure led to its prominence in the gaming world. However, Saudi Arabia’s approach, while monumental, enters a gaming landscape facing challenges such as declining viewership in esports and economic downturns.
The kingdom’s interest in esports, considered a ‘distressed asset,’ capitalizes on organizations and infrastructure struggling financially. This move comes as Saudi Arabia undergoes socio-political changes, juxtaposing social reforms in major cities with crackdowns on dissent elsewhere. The country, dependent on oil and gas for a significant portion of its GDP, seeks industrial diversification and aims to address the demands of its large youth population, potentially curbing radicalization.
Beyond the economic and political aspects, Saudi Arabia utilizes video games for international influence and diplomacy. The country’s investment in Chinese esports during President Xi Jinping’s visit highlights the use of esports as a form of international relations strategy.
Similar to sports, video games have devoted and passionate fandoms, and Saudi Arabia’s actions in these industries contribute to its global image building, akin to ‘gameswashing.’ Despite investments in various sectors, scrutiny remains regarding potential strings attached to Saudi spending and the impact on freedom of expression within the acquired companies.
The kingdom’s financial power has already affected the gaming industry, as seen in the fallout of a deal between Embracer and Savvy Gaming Group, resulting in studio closures and job losses. This financial influence mirrors Saudi Arabia’s impact on sports and culture globally, driven by the pursuit of power, expansion, and enrichment, even as it faces criticism for human rights abuses and military actions in Yemen.
