Saudi Arabia is investing $38 billion into the video game industry in a bid to diversify its economy away from oil.
The investment will be made through its Public Investment Fund (PIF), and it is aiming to establish the country as a major player in the $184 billion global gaming market.
Savvy Gaming Group, a subsidiary of the fund, will be leading the initiative. Initially, Savvy focused on the eSports industry, but after realising the challenges within it, they shifted their focus to game publishing and development.
“We are now more of an eSports company than a games company,” Savvy Chief Executive Officer Brian Ward told Bloomberg. “What we’re doing this year is focusing more on game publishing and development.”
Saudi Arabia has almost no presence in the global game development industry, but the country has a rapidly increasing population of gamers.
There are approximately 21 million gamers in the country, according to analysts at Niko Partners. That is about 58 percent of the population, compared with the US’s 66 percent, the report said, adding the games market in West Asia and North Africa is expected to grow by 56 percent to $2.79 billion by 2026.
PIF has already made multibillion-dollar investments in gaming companies like Nintendo, Tencent Holdings, and Activision Blizzard, becoming the largest outside shareholder of Nintendo with an 8.3 percent stake.
Savvy plans to acquire studios or publishers, including internationally, to achieve its ultimate objective of helping the country become a global entertainment hub by 2030.
Savvy has $13 billion to invest in acquiring a game publisher, but Ward would also consider taking another public game publisher private.
Savvy’s plans are ambitious in a crowded market where established players like Electronic Arts are laying off employees. However, according to the report, Savvy is confident that Saudi Arabia’s investment in the gaming industry will pay off in the long run, and the country will become a major player in the global gaming market.
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