June 6, 2023
Economy International

Saudi Arabia Invests $38 Billion in Gaming Industry to Diversify Economy

In an effort to reduce its reliance on oil and diversify its economy, Saudi Arabia has announced plans to invest $38 billion in the gaming industry. The investment will be made by the Public Investment Fund (PIF), a sovereign wealth fund, into the $184 billion global gaming industry. Savvy Gaming Group, a subsidiary of PIF, will lead the financing and expand its focus from esports to game development and publishing.

According to Bloomberg, Savvy CEO Brian Ward stated that the company would concentrate more on game development and publishing this year, although it had previously been focused on the esports sector. While Saudi Arabia currently has no significant involvement in the gaming industry, the country’s population of gamers is growing rapidly. Market research company Niko Partners has estimated that there are roughly 21 million gamers in Saudi Arabia, making up about 58 percent of the country’s population. This places Saudi Arabia in competition with the second-largest gaming population in the world, the United States.

The gaming industry in West Asia and North Africa is projected to increase by 56 percent to $2.79 billion by 2026, making it an attractive market for investment. PIF has already invested billions of dollars in gaming companies such as Nintendo, Tencent Holdings, and Activision Blizzard, and is the biggest foreign shareholder of Nintendo with an 8.3 percent stake. With the $38 billion investment, PIF hopes to purchase studios and publishers to achieve its goal of becoming a leading entertainment center by 2030.

The move to invest in the gaming industry is part of Saudi Arabia’s Vision 2030 plan, which aims to reduce the country’s dependence on oil and develop other sectors of the economy. The plan includes initiatives to promote tourism, increase foreign investment, and diversify the economy. The country has also announced plans to build a $500 billion megacity called NEOM, which will be powered entirely by renewable energy and will focus on technology, entertainment, and innovation.

Saudi Arabia’s investment in the gaming industry is a significant step towards diversifying its economy and reducing its dependence on oil. The country’s large population of gamers and the projected growth of the gaming industry in the region make it an attractive market for investment. With the $38 billion investment, PIF hopes to become a leading entertainment center by 2030 and contribute to the country’s economic diversification.

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