By now, everyone knows about the $38.7 billion investment war chest and major purchases being made by Savvy Gaming (such as ESL and Scopely), but that’s just the tip of the sand dune for Saudi investments.
The Saudi Arabian state, both through Savvy and directly via the Public Investment Fund (PIF), is a huge investor in the broader games industry too, with sizable stakes in some of the best-known games businesses in the world (and doubtless more than we can list below). Indeed, games seem to contribute a disproportionately large part of the PIF portfolio, making up over 21% of the investments held by the end of March this year.
Read on to find out more about where the money has been flowing in the last few years from this MENA powerhouse, what sort of stake they currently own in the major listed game-makers, and why any modern global games business simply can’t afford to ignore Saudi Arabia and the wider MENA region - currently on course to be the fastest growing geo in the whole games industry (again) in 2023!
Disclaimer - this information has been gathered from multiple sources and includes a little amateur accountancy in places to fill gaps in places relating to amounts or stakes. It also almost certainly does not represent the full extent of the Saudi state’s investments in the games market, just those that were available at the appropriate disclosure points. We will update as further information is gathered.
Electronic Arts - $2.98bn (9% as of March 2023)
Saudi Arabia’s Public Investment Fund was already putting money into gaming giant EA before the Savvy Games Group was officially formed, but upped its investment by a massive 55% in the last year from around 16 million to 24.8 million shares to build a stake of around $3 billion, or 9% of EA’s total stock.
Take-Two Interactive - $1.36bn (6.8% to 14.9% as of March 2023)
Earlier this year, an expose by US news outlet CNBC helped round up some of the PIF’s largest investments. Among the top five was Take-Two Interactive, with a hefty $1.36 billion value on its books at the end of March 2023 that could equate to as much as 15% of the stock.
Notably, this is a bit of an amateur maths figure so could well be flawed. What is clear is that the PIF owns a meaningful chunk of the GTA maker and owner of Zynga’s mobile titles such as Farmville, CSR, Empires and Puzzles and Zynga Poker, with previous filings showing that holdings had increased during 2022 from 5.3% to 6.8%.
Activision Blizzard - $3.3bn (roughly 4.9% as of March 2023)
Microsoft’s latest bride-to-be also has a Saudi suitor, representing around 9.1% of the Public Investment Fund's total investment fund as its second-biggest investment behind electric automaker Lucid (at the time of writing in July).
With a quick bit of reverse maths (based on share price today vs its market cap and multiplied by March 31 price) we believe that represents around 4.9% of the CoD, Candy Crush and Diablo publisher.
Nintendo - $3.8bn (8.3% stake as of Feb 2023)
The Japanese game maker has proved able to defy trends and weather any global storm by doing its own thing as a family-friendly provider of games and hardware, and clearly the Saudi investor see big potential for Nintendo to continue delivering, actively re-upping its stake in January and February this year from an initial 5% to a potential 7-8% (reports differ slightly).
The Saudi investor is also the biggest outside investor in the home of everyone’s favourite Italian plumber.
Nexon - 88.5M shares (10.23% stake as of June 2023)
Best known for games Maple Story and Dungeon & Fighter, South Korean publisher Nexon has also seen continuing endorsement from the Public Investment Fund, who increased their stake in the business from 9.22% to 10.23% as of June this year to make them the largest external shareholder.
Embracer Group - $1bn (8.1% stake as of June 2022)
Both Embracer and Savvy Games Group have had a strained relationship recently - with rumours that the proposed $2 billion deal which fell through and signalled a huge course correction for the infamously bullish company was related to the Saudi group. However, that doesn’t change the fact that Savvy Gaming group had already sunk $1 billion into Embracer, securing over 8% of the company; maybe they’ll be buying the dip?
NC Soft - $700M (6.69% as of Feb 2022)
Adding to other South Korean investments, the PIF became the fourth largest shareholder in NCSoft, the publisher of online RPG Lineage W and Guild Wars in February 2022, with a total investment in the region of $700M.
SNK Corp - $600M? (96% as of Feb 2022)
In April 2022, the PIF followed up on its stated intent to increase its controlling stake in the King of Fighters publisher SNK from an initial 33% for $223M in 2020, bringing its holding up to almost total ownership at 96%.
Scopely - $4.9bn (100% as of July 2023)
The PIF's biggest investment to date (and one of the largest in the games industry of all time) was also the most recent, with the $4.9 billion acquisition of mobile publisher Scopely. The company behind smashes including Star Trek Fleet Command, Monopoly Go, Scrabble Go, Marvel Strike Force and Stumble Guys definitely fills the criteria of a major publisher and also strengthens Saudi's hand in mobile, the dominant gaming format in the MENA region.
ESL & FACEIT - $1.05bn + $500M (100% January 2022)
The first major deals for Savvy Games Group, came in the esports space with the purchase of FACEIT - the London-based platform for esports players - and ESL Gaming - the major esports event organisation based in Germany, that had itself previously merged with esports events business Dreamhack (both previously acquired by MTG).
The combined total was a shade over $1.5 billion, huge figures, and a considerable return for MTG especially who’d initially invested €78 million in ESL and $28 million in Dreamhack (not including subsequent investments).
However, given the popularity of esports in the region, Savvy and the PIF may well have considered this premium a small price to pay to gain a strong position in the space AND announce their arrival to the gaming world.
Savvy Gaming Fund - $30bn+ to deploy (100%)
Okay, so this is potentially double counting a little, but the state announced a warchest of $38.7 billion, of which by our reckoning around $7 billion has been spent (on Scopely, ESL and Embracer). Some of the money is also earmarked for infrastructure projects (led by Nine66) and domestic events like Gamers8, so we’re going to imagine there’s $30 billion-ish left of that to deploy!
According to some outlets, it’s also possible that all gaming-related investments will end up folded into Savvy Games Group in the near future, making for an even more formidable force in global gaming (and another reason we named them in the top spot number one in our inaugural MENA Top 30 game makers chart last year!)
The 50 Billion Dollar Fund (and counting…)
Add all the above together and you get something in the $50-52 billion bracket, so it’s no wonder that with that sort of cheddar, Saudi Arabia has become THE big cheese for international investment. There’s certainly no reason to doubt the stated ambitions to land at least one major company and indeed speculation has run rife that they have had a look at everything from Epic Games and Ubisoft to Capcom or Konami.
Not that the MENA investment market is limited to Saudi either. While the scale may be slightly different currently, there are plenty of neighbouring eyes set firmly on the gaming sector. Emirates such as Dubai and Abu Dhabi are also home to sizable cash injections, whilst companies and talent from Jordan, Egypt and surrounds are providing homegrown opportunities too.