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Electronic Arts was in the news lately with the announcement of a considerable deal valued at approximately 55 billion dollars to make the company private. Stakeholders including private equity fund Silver Lake, investment firm Affinity Partners, and the Kingdom's sovereign wealth fund may transform the direction of EA.

The EA deal is a single component of Saudi Arabia's multi-billion dollar commitments in the gaming and entertainment sectors. In recent months, the Public Investment Fund took over the popular mobile game maker Niantic via publisher Scopely Inc. and its gaming division. Additionally snapped up the fighting game tournament through the Qiddiya Investment Company, a subsidiary of the Public Investment Fund. The Savvy Games Group also owns ESL FACEIT Group, that united two leading esports organizers.

Saudi Arabia has invested billions to take equity positions in companies like Activision, Capcom, Embracer, Nexon, Nintendo, and Take-Two Interactive lately. Moreover owns fighting game maker SNK Corporation, ownership that some fighting game enthusiasts believe shaped the design of the developer’s most recent title, Fatal Fury: City of the Wolves.

Why is the Kingdom so deeply involved in gaming? A big part of the answer diversifying the economy. But the Kingdom is spending big on the video game sector for other reasons too.

Understanding the Public Investment Fund of Saudi Arabia?

The Public Investment Fund is the national investment vehicle of Saudi Arabia. Created in 1971, the wealth fund is currently managed by Mohammed bin Salman, Saudi Arabia's key decision-maker since 2015. Based on reports, the Kingdom's Public Investment Fund controls around nine hundred twenty-five billion dollars in holdings.

What is Savvy Games Group?

Savvy Games was established in recently by the PIF. The group was founded with the Kingdom's “broadening economic bases and societal change” in mind, per CEO Brian Ward. Mohammed Mohammed bin Salman, Saudi Arabia's crown prince, and supposedly a “massive gamer,” holds the position of the PIF’s head.

Savvy Games states it is “focused on promoting sustainable expansion and innovation in the interactive entertainment field by means of strategic acquisitions, investments, and commercial ventures.” It hopes to achieve “a leading position in the gaming sector” by the year 2030, by way of rapid and aggressive growth.

Why the Focus on Video Games?

Along with MBS's reported passion for gaming, Saudi Arabia is planning to put money into a booming sector. Based on reports, the PIF expects to see gaming industry revenues top $300 billion by the year 2028.

The Kingdom is additionally aiming that its Qiddiya gaming hub, a component of the Qiddiya initiative in Riyadh, will become a focal point for gaming. The objective is to “draw 10 million guests a year to its locations by 2030, and support 30 top video game development companies.” This is included in a comprehensive strategy referred to as the National Strategy for Gaming and Esports, which seeks to incubate two hundred fifty firms, generate tens of thousands of jobs, and contribute thirteen point three billion dollars to the economic output, as per the PIF.

Yet the gaming sector is only one part of the PIF’s financial plan, which seeks to expand Saudi Arabia’s economic base into different sectors, like the tourism industry, entertainment, and the tech sector. The country’s economic system is significantly based on the petroleum industry, which represents about a large portion of GDP. The kingdom is planning for a post-oil peak era.

Nonetheless, the fund's investments in game publishers, development studios, and competitive gaming entities have been debated, leading to allegations like the Public Investment Fund “reputation laundering” — allocations in sports competitions like the World Cup and the establishment of LIV Golf to enhance Saudi Arabia’s global reputation. The nation's background of abuses and Mohammed bin Salman’s reported ordering of the assassination of Washington Post columnist Jamal Khashoggi have significantly harmed the public view of the kingdom. Whether gaming could possibly buff the nation's standing is not clear, but the likely economic returns are likely a more important goal.