The Expansion of Saudi Arabia’s Gaming Empire
The Saudi Sovereign Fund, through the Savvy Games Group, is rapidly transforming the global gaming landscape. Following its monumental acquisition of Electronic Arts for a staggering $50 billion, the kingdom is now eyeing a deal for Moonton Technology, with estimates suggesting a price tag of up to $7 billion. This strategic move aims to secure a stronger foothold in the lucrative mobile gaming sector.
The Purchase: A Move into Mobile Gaming
Just four months post-EA acquisition, talks are underway for Moonton, the creator of ‘Mobile Legends: Bang Bang,’ one of the world’s leading mobile MOBAs. With over a billion downloads globally, this game has successfully penetrated markets in Southeast Asia, despite facing legal challenges from Riot Games.
The Strategic Value of Mobile Gaming
While $7 billion may seem modest compared to the EA deal, it underscores the strategic importance of mobile platforms. The mobile gaming market is projected to generate more revenue than PC and console gaming combined, driven largely by the free-to-play model. Games like ‘Monopoly GO,’ owned by the Saudi-affiliated Scopely, exemplify this potential, raking in around $6 billion since its launch.
Establishing Dominance in Mobile Gaming
Controlling Key Players
Should the acquisition of Moonton come to fruition, Saudi Arabia will control three major mobile developers: Moonton, Scopely, and Niantic’s gaming division. This dominance positions the kingdom as a formidable player in a sector historically led by Chinese giant Tencent, especially amid shifting dynamics in the global gaming ecosystem.
A Broader Investment Strategy
The Saudi Sovereign Fund’s gaming investment portfolio includes renowned firms such as SNK (‘The King of Fighters’), Scopely, Niantic, and ESL FaceIt Group, further indicating a multi-faceted approach that spans different gaming markets. Together, these entities generate billions in annual revenues.
Influence and Shareholding Power
Strategic Shareholdings
Saudi Arabia’s investment strategy involves significant stakes—5% to 10%—in major gaming companies like Nintendo, Take-Two Interactive, and Square Enix. These stakes not only grant influence over corporate governance but also access to critical decision-making processes.
Collaborations with Industry Giants
Saudi connections with Ubisoft and Microsoft remain complex. Through Savvy Games, the fund acquired minority stakes in Ubisoft to aid in countering hostile takeovers, while also working with Microsoft on infrastructure projects for Xbox in the Middle East.
Positioning Against Tencent
A Different Approach
Unlike Tencent, which has faced regulatory scrutiny in the West, Saudi Arabia’s strategy combines both complete ownership of some studios and significant investments in larger entities. This approach minimizes antitrust issues while establishing a robust influence across the gaming landscape.
A Robust Investment Landscape
With an anticipated total investment surpassing $70 billion by integrating EA and Moonton, the kingdom’s gaming strategy exceeds the combined market values of Ubisoft, Capcom, and Square Enix. This aggressive investment pattern seeks to reshape the industry while fostering cultural influence through gaming.
The Future of Gaming in Saudi Arabia
The Saudi Vision 2030 initiative aims to diversify the economy beyond oil dependency, with gaming seen as a profitable avenue for growth. As the kingdom continues its expansion into the video game industry, the implications for both local and global markets remain significant, signaling a new era of influence in recreational entertainment.