Saudi Arabia is making big moves in the global esports scene, and recently hosted the first-ever Olympic Esports Competition. This event signals Saudi Arabia’s growing influence in the world of competitive gaming.
A major part of Saudi Arabia’s strategy to diversify its economy beyond oil is to build up its reputation in entertainment, sports, and tourism. The Olympic Esports Competition is just the tip of the iceberg in what has become a massive investment into esports, with the country committing $38 billion to the video game industry through its Public Investment Fund (PIF). The inaugural Esports World Cup in Riyadh also showed the world that Saudi Arabia is serious about becoming a central hub for gaming, with fans and professionals alike attending and competing for some of the largest prize pools in the industry.
Saudi Arabia’s involvement in esports is the latest in its wider strategy of investing heavily in sports and entertainment as a way to shift its economic reliance from oil. Over the last decade, the kingdom has hosted and invested in major sporting events, including Formula 1 races, heavyweight boxing matches, and professional golf tournaments. Through its PIF, Saudi Arabia has spent billions to secure partnerships and buy stakes in various sports properties. The PIF’s portfolio includes a 75% ownership stake in the Premier League soccer team Newcastle United, acquired in a deal worth approximately $409 million in 2021. Additionally, Saudi Arabia has invested in LIV Golf, a controversial golf league, and spent over $2 billion to poach some of the sport’s top players from the PGA Tour.
Saudi Arabia has positioned itself as a key player in the global sports market, utilizing its $700 billion PIF to buy influence in numerous leagues and sports franchises. The country’s foray into esports is a continuation of this pattern of financial domination in international sports. Critics often describe these investments as “sportswashing,” or an effort to enhance its global image and distract from ongoing human rights concerns. However, for struggling industries like esports and video games, Saudi Arabia’s deep pockets are hard to resist.
In the esports world, Saudi Arabia’s influence has become increasingly undeniable. Through Savvy Games Group, a company funded by the PIF, Saudi Arabia now holds a 40% market share of the global esports sector. Savvy Games has been central to Saudi Arabia’s gaming strategy, spending around $6 billion on acquiring esports companies and another $14 billion on stock investments in major video game publishers such as Electronic Arts, Take-Two Interactive, and Nintendo. This aggressive investment approach has made Saudi Arabia the largest outside investor in Nintendo, owning 8.3% of the company.
In 2022, Saudi Arabia’s $925 billion sovereign wealth fund, the Public Investment Fund (PIF), made a significant move by acquiring a 2% stake in Reliance Industries, a conglomerate that owns one of India’s largest esports companies, for $1 billion. That same year, PIF launched Savvy Games Group (SGG), with the goal of turning Saudi Arabia into a global gaming hub. SGG spearheaded a $1.5 billion investment to merge the esports platforms ESL and Faceit and also acquired 96% ownership of the Japanese game developer SNK. Additionally, PIF purchased minority stakes in Japan’s Capcom and Korea’s Nexon, each worth over $1 billion, and secured a $265 million stake in Chinese esports giant VSPO, backed by Tencent Holdings.
As of March 2023, PIF also holds stakes in major gaming companies, including a 9.2% stake in Electronic Arts (EA), 6.7% in Take-Two Interactive, 4.9% in Activision Blizzard, and 8.3% in Nintendo. While PIF consolidated most future gaming acquisitions through SGG, it remains uncertain whether this will be its sole approach to investing in the sector moving forward.
One of the kingdom’s most ambitious projects is the creation of Qiddiya, a massive entertainment city 30 miles west of Riyadh that will include a dedicated esports district. This project is designed to transform Saudi Arabia into a global hub for gaming, featuring state-of-the-art arenas and facilities to host international esports events. The country’s gaming scene has grown so large that the Esports World Cup in Riyadh featured a record-breaking $60 million prize pool, further cementing Saudi Arabia’s standing as a premier destination for competitive gaming.
In addition to high-profile tournaments, the country has inked partnerships with some of the largest gaming companies in the world. For example, Sony and Warner Bros. Discovery have both signed on to produce and stream content related to Saudi esports events, such as the Esports World Cup. In another notable move, Savvy Games Group acquired the Electronic Sports League (ESL), one of the most prestigious esports leagues globally, as well as Scopely, the gaming studio behind popular mobile games like “Monopoly Go”. These acquisitions give Saudi Arabia not only significant control over esports competitions but also over the platforms and technologies that power them.
The scale of these investments is staggering, but they are part of a broader plan. Crown Prince Mohammed bin Salman, himself an avid gamer, has laid out a vision for Saudi Arabia to create 250 gaming companies and 39,000 jobs in the sector by 2030. As part of this plan, the kingdom has recruited top talent from the U.S. and Asia and launched exchange programs to connect young Saudi game developers with their international counterparts.
Saudi Arabia’s future in esports looks incredibly bright, with its massive investments setting the stage for long-term dominance in the industry. The country is well on its way to becoming a global esports capital, as evidenced by the successful launch of the Esports World Cup and the upcoming Qiddiya gaming city. Through the PIF and Savvy Games Group, Saudi Arabia has made it clear that it intends to be a leader in competitive gaming, both as a host for prestigious events and as a financial powerhouse in the industry.
However, things aren’t all peachy in the land of Saudi Arabia. They’ve got some challenges ahead to be sure. The kingdom’s deep involvement in the esports world has faced criticism from gamers and organizations concerned about human rights issues in Saudi Arabia. Some have vowed to boycott events, while others grapple with the moral complexities of accepting Saudi money in a time of financial strain for the gaming industry. Still, avoiding Saudi influence entirely is becoming increasingly difficult, as many of the world’s largest gaming companies now have ties to the kingdom.
In the years to come, Saudi Arabia’s influence in esports is only expected to grow. With billions of dollars at its disposal and a commitment to building state-of-the-art facilities and fostering talent, the kingdom is poised to become an undeniable force in competitive gaming. While there may be controversies along the way, one thing is clear: Saudi Arabia’s presence in esports is here to stay.
