GAMING

VIDEO GAMES ARE NEXT FRONTIER FOR SAUDI INVESTMENT

Saudi Arabia is emerging as a major player in the USD 215.6 billion global video game industry.

The digital revolution and cutting-edge technologies have transformed the gaming industry with a number of deep-pocketed players such as Microsoft entering the fray. The gaming industry is tipped to maintain its recent rapid growth, and could be worth USD 324 billion by 2026, a new PwC report says. Gaming is now the third-largest data-consuming entertainment and media content category, behind video and communications. Around 3 billion people play video games worldwide.

The kingdom is a major hub for esports and gaming, with its market value hitting USD 1 billion in 2021 and projected to reach USD 6.8 billion by 2030. According to studies by the Saudi Esports Federation (SEF), Saudi Arabia is home to 85% of gaming fans in the Middle East and North Africa (MENA) region.

  

The country sees an opportunity as the market remains ripe for new players. Last year, the government unveiled a National Gaming and Esports Strategy, heralding a new era in the kingdom’s gaming sector. The goal is to establish the country as a global hub for gaming by 2030,as part of efforts to diversify the economy, generate employment opportunities, and provide top-notch entertainment for citizens, residents, and visitors.

The strategy aims to harness the creativity of Saudi gamers, leverage the country’s strong youth population of 21 million, and create new jobs, investment, and sector revenue streams. But the kingdom’s aspiration is global and ultimately aims to position itself as a global gaming hub by 2030.

The country is looking to generate SAR 50 billion in gross domestic product, and create 39,000 new direct and indirect jobs. By 2030, Saudi Arabia would produce more than 30 globally competitive games from Saudi studios and position the country among the top three nations in terms of professional esports players.

To nurture the gaming sector, the kingdom plans to undertake 86 initiatives covering the entire value chain, with the participation of more than 20 government and private entities. These initiatives span various areas such as technology and hardware development, game production, esports, additional services, and other enabling aspects including infrastructure, regulations, education, talent acquisition, financing, and financial support. This comprehensive approach will drive the growth of the gaming and esports sector in Saudi Arabia.

The kingdom has already witnessed a surge in homegrown game development studios and start-ups, contributing to the overall growth of the gaming sector. The local studios are creating innovative games that reflect Saudi culture, traditions, and values, appealing to both domestic and international audiences. Saudi game developers are actively participating in global gaming conferences and competitions, gaining recognition for their creativity and technical expertise. According to market research platform Tracxn, there are 36 gaming start-ups in the kingdom.

  

Saudi also launched Savvy Games Group, fully owned by the Public Investment Fund (PIF), which aims to drive growth in the electronic games industry and esports.

Led by CEO Brian Ward, who was formerly head of major gaming studio Activision Blizzard, Savvy Games has a SAR 142 billion war chest. It seeks to nurture Saudi talent and leverage the country's unique geographical location to establish itself as the dominant global hub for games and esports.

The group has five subsidiaries that will play a crucial role in developing the ecosystem. EFG, Savvy's esports arm, combines the strengths of ESL and FACEIT groups, forming a significant part of the global competitive gaming environment. Nine66 focuses on creating an ecosystem for game developers and studios, providing infrastructure, talent opportuni ties, financing, and consultancy support, It also offers publishing services in Middle Eastern markets to facilitate international developers' entry into the region.

Another subsidiary, VOV, specialises in constructing gaming and competition venues that prioritise the well-being and health of players.

The Savvy Games Fund will invest in leading publishers and developers, facilitating their establishment in Saudi Arabia

 

Earlier this year, PIF also became the largest outside investor in Japanese gaming giant Nintendo, with an 8.26% stake in the company. The sovereign wealth fund holds stock worth USD 2.9 billion in Activision Blizzard, USD 1.7 billion in Electronic Arts, and USD 1.2 billion stake in Take-Two Interactive, according to data from the Nasdaq Stock
Market.

Savvy Games Group also recently acquired mobile games studio Scopely for USD 4.9 billion. Founded in 2011, the gaming company is known for several popular mobile games including Yahtzee With Buddies, Star Trek Fleet Command, Marvel Strike Force, Stumble Guys, and Scrabble Go.