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Saudi bets $80m in gaming sector push

Creative Commons
Saudi acquisitions include US video-game maker Electronic Arts
  • Kingdom has acquired over $3bn of US video-game maker stock
  • Over 23m gamers in Saudi which accounts for 67% of population

Saudi Arabia’s National Development Fund (NDF) has announced a SR300 million ($80m) fund to help develop the gaming and e-sports sector in the kingdom.

The budget aims to position Saudi Arabia as a global gaming hub, increasing the sector’s contribution to the gross domestic product (GDP) by providing career paths and new job opportunities as part of Saudi Vision 2030.

The Gaming and E-sports Sector Financing Program aims to provide funding solutions through the banks affiliated with NDF in partnership with financial institutions in the private sector.

The gaming industry has long been favoured by Saudi’s Crown Prince Mohamed bin Salman and the Riyadh-based Public Investment Fund (PIF) has acquired more than $3 billion worth of stock in three US video-game makers in the past couple of years. They include Activision Blizzard, Electronic Arts and Take-Two Interactive Software.

Most recently, Saudi Arabia’s sovereign wealth fund announced plans to buy an 8.1 percent stake in Swedish gaming group Embracer via a direct share issue.

NDF governor Stephen Groff said the financing plan is a part of a first stage of NDF initiatives to develop the gaming and e-sports sector and diversify the non-oil sector economy. 

The funding solutions to be developed by the programme will be announced by the end of 2022, a statement cited by Saudi Press Agency said.

Gaming consumption in Saudi Arabia is estimated to reach $6.8bn by 2030, according to the Boston Consulting Group (BCG) in recent research.

Person, Human, Grand Theft Auto
Grand Theft Auto V by Take-Two Interactive Software

BCG said there are 23.5 million gaming enthusiasts in the kingdom, which accounts for 67 percent of its national population, while 21.1 million have already played e-sports titles on a semi-pro or amateur basis, with around 100 playing for their full-time careers.

Povilas Joniskis, partner, BCG, said: “Despite the kingdom being a relatively recent entrant to this space, the industry is vibrant and fast-growing, nevertheless.

“Passionate gamers are primarily powering its growth and popularity at present, and it is more than feasible for them to embark on full-time careers and become involved on the international stage.

“Yet first, key barriers concerning aspiring Saudi competitors and professionals must be overcome.”

Challenges to growth include a lack of funding to compete full-time as well as social stigma associated with choosing a career in gaming and e-sports, the BCG research said.

Overwatch 2 by Activision Blizzard

Last year, Saudi Arabia’s communications regulator launched a new initiative aimed at enhancing the country’s booming gaming sector.

The Communications and Information Technology Commission (CITC) launched the Game Mode initiative, within the framework of its work to encourage healthy competition among telecom operators.

Under the initiative, telcos are being pushed to provide the best experience for gamers, raise the level of transparency in the market for investors and the public with key data and indicators on the sector’s performance.

Game Mode includes a quarterly award for the internet service provider with the best response time for video gaming, a key indicator of the network’s performance.

The hosting of world renowned tournaments like PUBG Mobile Global Championship in Dubai and PUBG Mobile Star Challenge World Cup in Riyadh, as well as Gamers without Borders, a Saudi-led global initiative to fight Covid-19, have also put the region on the global gaming map.