First spotted by Seeking Alpha, PIF held 16.01 million shares of EA prior to Q4 2022, but has since upped its stake in the company to 24.81 million shares as of the end of Q1 2023 - an increase of 55%.
Saudi Arabia has been investing in game developers worldwide as part of its long-term economic strategy as the country diversifies from oil. As part of this strategy, PIF subsidiary Savvy Games Group acquired a $1 billion stake in Swedish conglomerate Embracer Group last year, and acquired American game maker Scopely, responsible for hits such as Marvel Strike Force and Stumble Guys, earlier this year.
The method behind the investments
Although Saudi Arabia has long been at the heart of the mobile-first MENA region, the country has been making investments in an extensive portfolio games companies, including console manufacturer Nintendo. While EA has seen success on mobile, this success has been tampered recently by several high profile closures, such as Apex Legends Mobile and Battlefield Mobile. The company also recently severed its deal with FIFA, raising some doubts as to the rebranded series' ongoing success. Notably, mobile growth for the company slowed to 1% in Q1, compared to 48% in August 2022.
Despite this, the company remains bullish about its prospects, especially on console, with CEO Andrew Wilson recently commenting on Microsoft’s attempts to acquire Activision Blizzard that, “We continue to be Microsoft’s biggest partner - I think we’re the number one publisher on their platform - so whether that deal goes through or not is not really material to us broadly.”
With this in mind, while Saudi Arabia may well continue to have confidence in EA’s performance on mobile devices, it seems that it’s hoping to capitalise on EA’s success on PC and console with this particular investment, in order to diversify its gaming revenue streams.
We listed Electronic Arts as one of the top 50 mobile game makers of 2022.