Saudi Arabia, the new home to some of football’s biggest stars and a co-owner of professional golf, is displaying its ambition in yet another global pursuit – the $180 billion-a-year video game industry.
In September last year, the Saudi sovereign wealth fund allocated nearly $40 billion for a new conglomerate with the aim of turning the kingdom into the “ultimate global hub” for gaming and esports by 2030. By February, the Saudi fund had become the largest external investor in Nintendo, and just this month, Saudi Arabia hosted a major gaming tournament boasting a record $45 million prize pool.
This has propelled Saudi Arabia into a prominent role in the industry and contributed to its rapid transformation from an inward-looking kingdom known mainly for oil and conservative Islamic practices into an emerging sports and entertainment powerhouse.
However, just as in football and golf, the Saudi involvement in gaming has stirred controversy, with critics accusing them of using sports to divert attention from human rights abuses, including the 2018 killing of Saudi dissident and Washington Post columnist Jamal Khashoggi.
With gaming, Saudi Arabia, a country known for imposing long prison sentences for a few tweets, is entering a global community largely dominated by young and internet-savvy individuals. Crown Prince Mohammed bin Salman, aged 37 and reportedly an avid gamer himself, views the foray into gaming as part of his Vision 2030 plan to revamp the kingdom’s economy, reduce its reliance on oil, and provide employment and entertainment for its youthful population.
No small investment
In September, when the Savvy Games Group was established, owned by Saudi Arabia’s $700 billion Public Investment Fund and headed by CEO Brian Ward, an industry veteran, Prince Mohammed stated, “We are harnessing the untapped potential across the esports and games sector to diversify our economy.”
Savvy Games Group plans to invest $39 billion in the gaming industry, aiming to create 250 local companies and generate 39,000 jobs over the next seven years. Earlier this month, the group completed a $4.9 billion acquisition of Scopely, the creator of games like “Monopoly Go,” “Star Trek Fleet Command,” and “Marvel Strike Force.”
The gaming industry is enormous and continually expanding. Market research firm Newzoo reports that an estimated 3.2 billion people engage in gaming on PCs, consoles, mobile devices, or cloud gaming services, with the industry generating $184.4 billion in revenues in 2022. Gaming revenue surpasses the combined earnings of the global box office, music streaming, album sales, and the top five wealthiest sports leagues, according to a 2021 Boston Consulting Group report.
Saudi Arabia is also venturing into the realm of esports, which includes competitions involving top players in games spanning from battle royales and first-person shooters to “FIFA” soccer and “Madden NFL.”
For those unfamiliar with it, watching other people play video games may seem unappealing, but it is a vast industry with millions of fans, celebrity players, and corporate sponsors. A 2021 esports tournament in Singapore attracted 5.4 million concurrent viewers.
Christopher Davidson, a Gulf expert at the European Center for International Affairs, a Brussels-based think tank, noted, “When you invest in esports, you are getting prime advertising opportunities, and of course, you are promoting the brand of your country as a cool, forward-thinking, interesting place to go on holiday.”
He added, “Esports is far younger and more global than any other sport. English soccer is popular everywhere in the West, but not really in an average-sized Chinese city. But these esports are.”
Last summer, Saudi Arabia hosted Gamers8, a multi-week tournament with a $15 million prize pool. This event returned this month with a prize pool three times larger.
Building games set in Saudi Arabia
As the national gaming and esports strategy gains momentum, Saudi Arabia’s primary focus has turned to nurturing local game production, with the promise of transforming the kingdom into a haven for game developers capable of creating new titles that celebrate Saudi and Arabic culture.
Developer Mohammed al-Fakih remarked, “In the past, Arabs were only buying games, not developing games.”
While Saudi Arabia holds immense potential in the video game market, the challenge lies in designing a groundbreaking gaming sensation that also highlights Saudi culture. Faisal bin Homran, Chief Esports Officer at the Saudi Esports Federation, acknowledged this conundrum. Currently, there are 25,000 Saudi and foreign developers tackling this challenge.
Homran optimistically stated, “With expertise coming from outside and knowledge being shared, we will undoubtedly see games with the potential for international success.”
He highlighted that one source of inspiration comes from Saudi characters already featured in global franchises, such as Shaheen in the Tekken fighting games or Rashid in Street Fighter. Rashid’s origin is suggested to be from an unspecified Middle Eastern country, possibly the United Arab Emirates or Saudi Arabia.
However, officials like Homran are aiming high: the national strategy sets a target of producing 30 globally competitive games within domestic studios by 2030.
Saudi Arabia’s affluent Gulf neighbours are also eager to participate. Dubai, in the United Arab Emirates, recently hosted a five-day esports festival. The Qatar Investment Authority recently acquired a minority stake in Monument Sports & Entertainment, which owns the Washington Wizards and Capitals, as well as esports holdings.
The increasing involvement of autocratic Gulf states has sparked debate within the gaming community. In 2020, Riot Games, the developer of the popular “League of Legends,” and Danish tournament organizer Blast Premier both terminated partnerships with Saudi Arabia due to public outcry from fans. Blast Premier subsequently held its world finals in Abu Dhabi, UAE, where it faced similar criticism.
Team Liquid, an esports organization representing 60 champion players across 14 games, announced in December that it would donate half of its winnings from recent competitions in Saudi Arabia and the UAE to an organization assisting LGBTQ+ individuals in escaping violence and persecution.
Homosexuality remains taboo in most of the Middle East and is criminalized in Saudi Arabia and the UAE, although prosecutions are rare. Both countries also prohibit any form of LGBTQ+ advocacy.
The Team Liquid statement acknowledged the financial and ethical dilemmas associated with accepting sponsorship from such countries, stating, “These events present real opportunities for our players, many of whom may have short careers with few guarantees. An outright boycott might not only end careers, it could end our involvement in some esports entirely.”
