Saudi PIF buys a share of 1 billion dollars in the Swedish gaming group Embracer
Saudi Arabia’s Public Investment Fund (PIF) takes a stake in Swedish video game maker Embracer a month after investing in Japanese video game giant Nintendo.
Saudi Arabia’s sovereign wealth fund made its fourth investment in the gaming sector so far this year.
PIF is investing $ 1 billion to buy 99.9 million B shares in Embracer. It invests in its own Savvy Gaming Group (a gaming and e-sports group PIF formed in January).
Brian Ward (below), CEO of Savvy Gaming Group, said: “The Embracer team has built a completely 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.”
As part of Saudi Arabia’s economic diversification, last month, the $ 500 billion state-owned wealth fund acquired a 5.01 percent stake in Japanese gaming company Nintendo.
Nintendo’s efforts follow PIF’s latest revelation of shares in two other Japanese gaming companies – Nexon and Capcom, which the fund unveiled in February.
“Savvy Gaming Group will enable us to establish a regional hub in Saudi Arabia, from which we can make investments across the MENA region, organically, through partnerships, joint ventures or through acquisitions of companies led by strong entrepreneurs.” Lars Wingefors, founder and CEO of Embracer, commented.
“I think it’s an investment round to diversify its portfolio from oil and energy,” said Nazih Fares, head of communications and localization at 4 Winds Entertainment, a gaming publisher.
But when compared to the rest of the Gulf, especially the United Arab Emirates, Saudi Arabia’s funds are generally a bit late in making an international impact on their ‘brand.’ Look at all the major football teams and other sports teams sponsored by United Arab Emirates brands or Qatar, for example. “
Resume “the rush to reach that level for Saudi Arabia will take longer, but” investing directly in major brands will help catch up with the diversification of revenues generated by the same international companies. “
“The $ 1 billion investment is part of its strategy to have a diversity of forward-looking shareholders supporting its long-term business plans,” Fares explained.
In recent years, Saudi-based entities have become one of the major investors in the global gaming market. The gaming market in MENA is one of the fastest growing in the world, with $ 5.7 billion in revenue in 2021 and more active players than either the United States or Western Europe.
Lars Wingefors said, “By far the largest country in this market is Saudi Arabia, and after visiting Saudi Arabia, I have seen the gaming community and the opportunities on my own.”
According to Boston Consulting Group (BCG), gaming consumption in Saudi Arabia is estimated at $ 6.8 billion by 2030.
The BCG report said: “These figures point to lots of untapped potential as more young Saudis pursue careers in game development, management and e-sports competitions.”
It is worth mentioning that PIF last year increased its stake in US video game maker Activation Blizzard to $ 15.9 billion.
“The gaming ecosystem in the MENA region is exciting on several levels, mainly due to the sector’s expansion mechanics and growth rate – we are experiencing sustained growth from year to year to about 15.8 percent CAGR.” Matthew Pickering, CEO of Power League Gaming (gaming and sports agency).
Combined with a youthful, hyper-committed regional population with rapid technology use and high levels of mobile penetration, this provides “exciting opportunities for continued sustainable development and the provision of experiences by both agencies and publishers to deliver value for players and brand partners and sponsors alike.”