Saudi state-backed conglomerate to sink $37.8 billion into video game industry

Savvy Games Group, a video game conglomerate funded by the Saudi government, has laid out plans to sink $37.8 billion into the game industry.

Notably, Savvy will set aside $13.3 billion to finance the acquisition and development of a "leading game publisher to become a strategic development partner." Another $18.6 billion will also be siphoned off so the company can make "a series of minority stake investments in key companies that support Savvy’s game development agenda."

Savvy is fully-owned by Saudi Arabia's state-backed Public Investment Fund (PIF), and like PIF is chaired by Saudi crown prince and deputy prime minister Mohammad bin Salman, who has been linked with the assassination of The Washington Post journalist Jamal Khashoggi and accused of torturing human rights activists.

The new investment strategy will see Savvy invest in both local and international programs and infrastriction to help it push deeper into the video game industry. Notably, Savvy hopes to establish 250 game companies across Saudi Arabia to create 39,000 jobs and significantly raise the sector's GDP contribution.

The company said its investment will be based around four key pillars: enhancing returns, local impact, leaving a global footprint, and expanding. Savvy said that realizing those goals will require International game investments that can generate sustainable returns and attract talent.

Savvy has tasked its five independent subsidiaries to help expand its footprint across different sectors including game development, esports, publishing, and tech innovation.

"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," said Savvy chairman Mohammad bin Salman, commenting on the group's new-look investment strategy.

“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”.

The Saudi government has already made significant investments into major game companies through PIF and its subsidiaries. Earlier this year, PIF grabbed an 8.1 percent stake in Swedish conglomerate Embracer Group for $1 billion. Prior to that, it also purchased a 5 percent stake in Nintendo, alongside additional stakes in Capcom and Nexon.

Roll the clock back even further, and the trend continues. PIF bought $3 billion worth of stock in U.S. game companies Activision Blizzard, EA, and Take-Two Interactive in February 2021 to help realize its aim of becoming the "world's most impactful investor."

Japanese company SNK is also now effectively under the ownership of the Saudi government, with Mohammed Bin Salman's non-profit Misk Foundation completing its slow-burning acquisition of the Metal Slug developer in May 2022.

Many of those deals were met with concern from developers who criticised the Saudi regime's poor human rights record. In the case of the Embracer deal, the backlash was so intense that CEO Lars Wingefors chose to release a statement to explain why the company had accepted the investment.