Saudi Arabia’s sovereign wealth fund has acquired a $265 million stake in Chinese e-sports company VSPO.
This move marks Saudi Arabia’s latest push into the gaming market, after the kingdom invested in Nintendo Co and Embracer Group last year, Reuters reported.
Through its gaming unit Savvy Games Group, the Public Investment Fund (PIF) will become the largest equity holder in VSPO, which is backed by Tencent Holdings Limited.
This move is part of Saudi Crown Prince Mohammed bin Salman’s plan to make the country “the ultimate global hub for the games and esports sector by 2030.” Last year, he also announced a $38 billion strategy for Savvy Games Group.
VSPO is a leading player in the mobile e-sports industry and has previously sought listings in the US and Hong Kong.
The company said that PIF’s investment would help it expand mobile esports, particularly in Saudi Arabia. Meanwhile, Savvy Games Group said the move would help diversify its portfolio.
“This is a significant transaction for Savvy, and gives us a major foothold in the important Asia region. We are looking forward to diversifying our geographic footprint alongside VSPO,” Savvy chief executive officer Brian Ward said.
The global esports market is growing rapidly, and the COVID-19 pandemic has only accelerated its expansion.
With its large population of young people and high levels of disposable income, Saudi Arabia is seen as a lucrative market for gaming companies. The kingdom’s growing interest in the sector has been welcomed by industry experts.
The PIF’s investment in VSPO is part of its wider efforts to diversify the kingdom’s economy and reduce its dependence on oil.
The fund has made several high-profile investments in recent years, including acquiring a 40 percent stake in the SoftBank Group’s Vision Fund and investing in electric car company Lucid Motors.
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