From Oil To Games: Saudi Arabia Pumps $38 Billion To Become A Video Game Hub

Saudi Arabia is making a $38 billion bet on the potential of its gaming industry, as the country seeks to reduce its dependence on oil revenues, reported Bloomberg.

The investment is being made by the Saudi Arabian Public Investment Fund with the aim of establishing the country as a significant player in the global gaming market, which has a valuation of $184 billion.

See Also: Elon Musk Now Rumored To Seek Funding For SpaceX From Middle-East After Infamous Tesla Snub

While the fund initially focused on the esports industry, it has now shifted its attention to developing, publishing and acquiring high-quality games, as well as supporting the gaming industry in Riyadh, the capital of the country.

To accomplish these objectives, Savvy Gaming Group, the Fund's subsidiary, is taking the lead. In dialogue with Bloomberg, Brian Ward, Savvy's CEO and a former executive at big gaming companies such as Electronic Arts Inc (NASDAQ: EA), Activision Blizzard Inc (NASDAQ: ATVI) and Microsoft Corp (NASDAQ: MSFT) said: "We are now more of an esports company than a games company... What we’re doing this year is focusing more on game publishing and development."

The company's portfolio includes five operating firms, one of which is the Savvy Games Studios. With around 45 employees, the studio was established a year ago and aims to develop a mobile game before moving on to a console game.

While Ward hopes the studio will eventually become a top-tier player in the industry, he admits that building a game studio from scratch is "super hard."

With an investment of about $13 billion to acquire a game publisher, the company has already made multibillion-dollar investments in gaming giants like Nintendo ADR (OTC: NTDOY), Tencent Holdings ADR (OTC: TCEHY) and Activision Blizzard.

“We would like to use those investments to begin to work with these companies and ask how we can work together on publishing in [the Middle East and North Africa], run their esports businesses or develop new IP together,” Ward added.

It's also worth noting that in February the fund increased its stake in Nintendo to 8.3%, becoming the largest outside shareholder.

Analysts at Niko Partners estimate there are roughly 21 million gamers in the country, which accounts for approximately 58% of the population. This figure is slightly lower than that of the U.S., where 66% of the population are gamers.

The gaming market in the Middle East and North Africa is projected to grow substantially in the coming years. By 2026, it is expected to increase by 56% to reach $2.79 billion.

Read Next: Saudi Aligning With U.S. On Ukraine? Riyadh To Send $400M Aid To Kyiv Amid Raging War With Putin

Photo: Hala AlGhanim on Unsplash