Public Investment Fund doubles down on gaming sector

26/07/22

Saudi Arabia’s Public Investment Fund (PIF) is doubling down on the gaming sector, making its fourth investment this year.

As part of the country’s economic diversification strategy in line with Vision 2030, it is investing SAR 3.8 billion (USD 1.0 billion) in Swedish video game maker Embracer. The investment is made through the Savvy Gaming Group, which the PIF established in January.

The Embracer team has built a truly unique and leading ecosystem of entrepreneurs and creators. As a result of the acquisition, Embracer will establish a regional hub in Saudi Arabia to invest in start-ups and scale-ups across the Middle East & North Africa (MENA) region.

Similarly, the SAR 1.9 trillion (USD 500 billion) sovereign wealth fund acquired a 5.01% stake in Japanese gaming company Nintendo in May. It followed investments in two other Japanese gaming companies - Nexon and Capcom - in February 2022. Last year, the PIF boosted its stake in American video game maker Activation Blizzard to SAR 59.6 billion (USD 15.9 billion).

Over the past few years, Saudi based entities have become the most significant investors in the global gaming market. The MENA games market is among the world’s fastest growing, with SAR 21.4 billion (USD 5.7 billion) in revenues in 2021 and more active gamers than America or Western Europe.

Consequently, gaming consumption in Saudi Arabia is estimated to reach SAR 25.5 billion (USD 6.8 billion) by 2030, according to the Boston Consulting Group (BCG). These figures suggest significant growth potential as more young Saudis pursue careers in game development, management and competition (also known as e-sports).

Overall, the MENA region’s gaming ecosystem is experiencing sustained year-on-year growth with a CAGR of 15.8%. This can be attributed to a young, hyper-engaged regional demographic with fast technology adoption rates and high levels of mobile penetration.

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