The kingdom of Saudi Arabia has made another major investment in the video game industry, investing more than $1 billion to acquire an 8.1% stake in Swedish gaming giant Embracer Group. Shares will be issued to Savvy Gaming Group in accordance with market observation (opens in new tab)a subsidiary focused on games and e-sports of the Public Investment Fund of the country.
“Savy Gaming Group’s $1 billion investment allows us to proactively continue executing our strategy from a position of strength across the global gaming industry,” Embracer Group CEO Lars Wingefors said in a statement. . Press release (opens in new tab). “In recent years, Saudi Arabia-based entities have become one of the most significant investors in the global gaming market and the gaming market in MENA [Middle East—North Africa] is one of the fastest growing in the world, with revenue of $5.7 billion in 2021 and more active players than the US or Western Europe.
“The biggest country in this market by far is Saudi Arabia and having visited Saudi Arabia I saw the gaming community and opportunities first hand. Our relationship with Savvy Gaming Group will allow us to establish a regional hub in Saudi Arabia , from which we will be able to make investments across the entire MENA region, whether organically, through partnerships, joint ventures or through acquisitions of companies led by strong entrepreneurs.”
Saudi Arabia has made several major moves in the gaming space in 2022 through the Public Investment Fund and Electronic Gaming Development Company, which between them have made significant investments in capcom (opens in new tab)Nexon, Nintendo (opens in new tab), ESL games (opens in new tab)and SNK (opens in new tab) before the Embracer agreement.
However, Embracer is the biggest of them all: it’s not a household name like Electronic Arts or Activision, but it has quietly grown into a industry giant (opens in new tab); in may acquired (opens in new tab) Crystal Dynamics, Eidos Montreal and Square Enix Montreal, adding them to a list that also includes Koch Media and Deep Silver, Saber Interactive, Gearbox, 3D Realms, Perfect World and others.
“This investment in Embracer Group is a starting point for a long-term commitment to the company,” said Brian Ward, CEO of Savvy Gaming Group. “The team at Embracer has built a truly unique and leading ecosystem of entrepreneurs and creators on a scale that we believe will continue to generate tremendous value for the gaming community for years to come.”
Both the Public Investment Fund and the Electronic Gaming Development Company are controlled by Mohammed bin Salman, the crown prince and de facto ruler of Saudi Arabia. In 2021, US intelligence agencies determined that bin Salman had approved the 2018 assassination of Saudi journalist Jamal Khashoggi (opens in new tab), who was tortured, killed and later dismembered while inside the Saudi Arabian consulate in Istanbul, Turkey. Despite the discovery, no action was taken against bin Salman by the US or other governments.