SPA
- $38bn to develop games industry
- Target of 250 gaming companies
- ‘We have a lot of patient capital’
The Esports World Cup, now underway in Riyadh, features 2,000 players from 100 countries competing for seven weeks in a purpose-built arena for a record-breaking prize purse of $71.5 million.
Organisers admit that the event, in which clubs compete against each other in 25 video game competitions, is bound to lose money.
They say that their objectives are more long term and include securing Saudi Arabia’s place at the pinnacle of esports and the development of a gaming industry that will contribute to the nation’s economic diversification efforts.
“When you talk about gaming and esports, there are certain places that come to the top of your mind,” says Prince Faisal bin Bandar Al Saud, chairman of the Saudi Esports Federation.
“You think about Japan, California and the US, Finland, Norway, Sweden, you think about France. We want Saudi to be a natural part of that conversation.”
Saudi Arabia has quickly become a major player in esports, hosting the EWC for its second year in a row and with plans to host the inaugural Olympic Esports Games in 2027.
Creating a wider gaming industry, one that develops new products for sale on the international market, is likely to take a lot longer.
According to the National Gaming and Esports Strategy, Saudi Arabia wants to produce 30 of the top 300 games of the decade by 2031. It aims to have 250 gaming companies operating in the kingdom, creating 39,000 jobs just in development, and contributing SAR50 billion ($13.3 billion) to GDP.
Yet there are still no signs of Saudi video games hitting the shelves of retailers around the world.
“A lot of people tell me we notice a lot of the investment you’re doing in esports, but we don’t see a lot of the investments you’re making in gaming,” says Prince Faisal.
“It’s because to build a games industry takes five to 10 years. And we have a lot of patient capital there.”
With backing from its parent organisation, the $1.1 trillion Public Investment Fund, Savvy Games Group has earmarked $38 billion to develop the gaming industry in Saudi Arabia.
It has already made a number of high-profile investments and acquisitions, including the establishment of video game developer Steer in Riyadh and the acquisition of California-born mobile games developer Scopely for $4.9 billion.
Prince Faisal says that, by bringing video games companies and jobs to Saudi Arabia, the country can kickstart its own development industry and convince young graduates to see a career in video games.
“We’re in a chicken or an egg scenario,” he says.
“For companies to come in, what they want is a talent pool. For people to take that step and make this their career path, they want to know there is a place where they can get hired.”
- Visas on offer as Esports World Cup hits Saudi Arabia
- Half a billion viewers expected for Riyadh’s Esports World Cup
- Saudi Arabia’s Pokémon Go deal is a gamechanger
A number of foreign companies have now announced plans to move to Saudi Arabia. Last year Chinese publisher iDreamSky opened its first Middle Eastern office in Saudi Arabia. On Friday, UK gaming services and development company Side Inc said it will open offices in Riyadh by the end of the year.
“Saudi Arabia is quite possibly the most important market for the global gaming industry right now, especially when it comes to the development scene,” said Side CEO Deborah Kirkham in a press release.
“It’s got all the right pieces in play for aggressive growth for UK companies… and the backing of a government who knows how to proactively invest in the future.”
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