One of the recent news making the headlines is Savvy Games Group’s investment in the gaming industry. It is a company in Saudi Arabia, and the Crown Prince, Mohammed bin Salman bin Abdulaziz, stands as the Chairman of the Board of the SGG. Although it is a surprise for many to see Saudi Arabia’s interest in the gaming industry, the main shock is the amount itself.
They have decided to invest a total of $37.8BN in the gaming hub, but that doesn’t mean the whole will be spent on a leading video game publisher. There is an entire strategy behind it; Crown Prince himself shared parts of it in a report. So, let’s break down those numbers and see their scale.
About Savvy Games Group
If you are unfamiliar with SGG, it is a game and esports company known for its part in developing esports in the country. According to them, the gaming industry is one of the most buoyant sectors globally, and their recent interest in the global market is evidence of that belief. After playing an influential role in the country, the Group has taken the banner of helping its growth globally. According to the Crown Prince:
Savvy Games Group is one part of our ambitious strategy aiming to make Saudi Arabia the ultimate global hub for the games and esports sector by 2030
Major Points
- Mohammed bin Salman bin Abdulaziz’s statements show that this move is not only for global growth but also for allowing the Kingdom to become a hub for big video game companies to invest in.
- They aim to establish 250 game companies in Saudi Arabia, creating 39k jobs and raising the sector’s GDP contribution to SAR 50BN by 2030.
- On the surface level, it is understandable why many think their move is surprising. Still, the strategy reveals they have plans that foresee the future and its positive effects on the Kingdom.
Kingdom Sees the Sector as a Potential Investment
Starting off, let us get facts straight, SGG has invested previously in big companies, and it is possible that they recognized the potential through those investments or were always aware. If you didn’t know, in January, SGG purchased ESL and Faceit for $1.5BN. Later in June, they invested $1BN in the Embracer Group, not to mention several other multi-billion dollar investments in other notable companies.
It is crystal clear that SGG’s goals are not just global; they aim to have some positive local effects by creating Esports organizations and game studios in the Middle East. That becomes much more possible with acquiring a leading video game publisher.
Financially speaking, the Saudi and SGG officials further aim to diversify the Kingdom’s economy. As per their statement:
We are harnessing the untapped potential across the esports and games sector to diversify our economy, drive innovation in the sector and further scale the entertainment and esports competition offerings across the Kingdom
Why Does That Matter?
Keep in mind the things we mentioned above because that way, we can see that not only does the result of this investment benefit SGG but also Saudi Arabia’s economy. They have marked $13BN for acquiring and developing a leading game publisher to become a strategic development partner. In addition, $18BN are for minority investments.
If we look at some of the leading video game publishers within their budget of $13BN as stated, then:
Unity = $9.6BN.
Krafton = $6.7BN.
Embracer = $6.6BN.
Konami = $6.4BN.
Capcom = $5.6BN.
37 Interactive = $5.4BN.
Square Enix = $5.2BN.
*These values are publicly available and only applicable at the moment of writing this article.
They can make some big moves here, allowing them to make their bases in the Kingdom, creating 39,000 jobs across 250 gaming companies. For a country like Saudi Arabia, these numbers are expected, and since this was presented by the Crown Prince himself, we can see their seriousness for this investment. If all goes as they said, it will be great for their economy.
As for you, do you still find their move surprising? And which video game publisher do you think they will invest in? Let us know your thoughts below, and we will get back to you!
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