Saudi Arabia Pumps $38 billion Into Video Games

Saudi Arabia produces 11 million barrels of oil a day — and zero video games. But that ratio could soon change.

The country’s Public Investment Fund will funnel $38 billion into its e-sports subsidiary Savvy Gaming Group to turn the company into a studio that develops and publishes video games.

Saudi Arabia Has Entered The Game

The gaming market for years now has been bigger than the movie and music industries combined, so launching a studio may be a more obvious choice than it might appear as Saudi Arabia develops its economy in areas that don’t involve, say, unexpectedly having to slash the output of fossil fuels. Even so, Savvy pivoting to developing and publishing games is quite a bold move for the PIF seeing as Saudi Arabia hasn’t exactly been a gaming development mecca.

To be sure, if you’re going to spin up an entire industry from scratch, a $38 billion investment is not a bad starting point, but there’s no guarantee of success. Google, a company that you think would have the capital and nerdy caché necessary to pull off a foray into the gaming world, shut down its Stadia cloud gaming division earlier this year after making barely a dent in the industry. Savvy will of course have its own unique hurdles:

• Saudi Arabia is not home to many game developers, so Savvy will have to pump a lot of capital into talent acquisition.
• Savvy CEO Brian Ward hinted to Bloomberg that the company may adopt the strategy currently favored by Microsoft of hoovering up existing gaming studios. According to Bloomberg, Savvy has around $13 billion to splash on buying up a publisher — that’s $5.5 billion more than Microsoft spent on popular game-maker Bethesda in 2021.

When in Riyadh: Even if Savvy never produces a single profitable game, it may still serve its purpose. The PIF has previously invested billions in gaming companies around the world, and Ward told Bloomberg: “Part of our mandate is to help partners and other companies come to Saudi and choose Riyadh over some other place to establish a publishing business or distribution business to serve the region.” Usually, the point of a new venture isn’t to get crowded by competition, but it looks like Saudi will take what it can get.