Saudi Arabia Leads Global Investment in Video Game Industry

A group of professionals competing for the E-sports World Cup in the Saudi capital, 2024. (X platform)
A group of professionals competing for the E-sports World Cup in the Saudi capital, 2024. (X platform)
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Saudi Arabia Leads Global Investment in Video Game Industry

A group of professionals competing for the E-sports World Cup in the Saudi capital, 2024. (X platform)
A group of professionals competing for the E-sports World Cup in the Saudi capital, 2024. (X platform)

In a country where youth make up 70% of the 36 million population, at least 21 million are video game enthusiasts.

This is Saudi Arabia, which has placed significant emphasis on its citizens’ interests by investing in the electronic games sector as a crucial component of its economy.

The sector is expected to contribute SAR 50 billion ($13 billion) to the GDP, create over 39,000 job opportunities, and place the Kingdom among the top three countries globally in terms of professional e-sports players.

The Savvy Games Group, part of the Public Investment Fund, has committed $8.3 billion to acquire five international companies specializing in electronic games and to hold stakes in additional firms. Moreover, the group manages a substantial $38 billion fund dedicated to investments in this growing sector, according to the annual Savvy report released on Monday.

Additionally, the Saudi Social Development Bank launched a program to support the gaming and e-sports sector with a budget of SAR 300 million ($80 million) in 2022. By the end of last year, the budget had increased to SAR 1.09 billion ($290 million).

Future plans

Brian Ward, CEO of Savvy, told Asharq Al-Awsat that the company has signed a memorandum of understanding with Niantic to bring the game Pokémon GO to Saudi Arabia. The game will be launched in Riyadh, Jeddah, AlUla, and Abha.

The company is also working on establishing an Olympic version of electronic sports in Saudi Arabia, set to take place in the last quarter of 2025. According to Ward, the event will be a massive undertaking in Riyadh, comparable in scale and significance to the FIFA World Cup.

During a press conference in Riyadh, Ward disclosed plans to create an Xsolla Academy specializing in video game development, which has branches in India and Malaysia. The initiative is expected to generate 3,600 jobs by 2030.

Investment in talent

He explained that the group is collaborating with the Saudi E-sports Federation and the E-sports World Cup to develop training programs.

Savvy runs an exclusive internal training program at its studios, aimed at cultivating new talent, he revealed.

He stressed that while 5% of professional e-sports players globally were women, Saudi Arabia boasts a higher percentage at 20%, with the next closest country at 12%. This positions the Kingdom as a leader in this area.

Ward emphasized that foreign investment is a key pillar of his company’s efforts to attract investment into the gaming and e-sports sector in Saudi Arabia.

“Saudi Arabia is unique in having a national strategy for gaming and e-sports, supported by dedicated efforts from the government, the Public Investment Fund, Giga projects, and other relevant entities,” he added.

Fastest-growing

According to recent estimates by the Boston Consulting Group, global revenues from the gaming sector have surpassed those from the music industry, album sales, and the top five sports leagues.

The sector saw substantial growth during the COVID-19 pandemic, with global revenues increasing by 11% annually from 2018 to 2021, rising from $142 billion to $193 billion in just four years.

Revenues are projected to continue growing at a rate of 4% annually, surpassing $220 billion by 2027, with the number of global gamers nearing 4 billion.

According to Savvy’s annual report, Saudi Arabia was the fastest-growing market globally in the video game sector, with revenues reaching $1.13 billion in 2023. This figure is expected to increase to $1.21 billion this year, $1.28 billion by 2025, and $1.36 billion by 2026, reflecting a compound annual growth rate of over 6%, according to the Savvy report.

Additionally, the Kingdom is situated at the heart of the Middle East and North Africa, where revenues totaled $6.18 billion in 2023. This figure is projected to grow at an annual rate of 8% through 2025, making the region the fastest-growing globally.



US Treasury Targets Russia's Gazprombank with New Sanctions

FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
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US Treasury Targets Russia's Gazprombank with New Sanctions

FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo

The United States imposed new sanctions on Russia's Gazprombank on Thursday, the Treasury Department said, as President Joe Biden steps up actions to punish Moscow for its invasion of Ukraine before he leaves office in January.
The move, which wields the department's most powerful sanctions tool, effectively kicks Gazprombank out of the US banking system, bans its trade with Americans and freezes its US assets, Reuters reported.
Gazprombank is one of Russia's largest banks and is partially owned by Kremlin-owned gas company Gazprom. Since Russia's invasion in February 2022, Ukraine has been urging the US to impose more sanctions on the bank, which receives payments for natural gas from Gazprom's customers in Europe.
The fresh sanctions come days after the Biden administration allowed Kyiv to use US ATACMS missiles to strike Russian territory. On Tuesday, Ukraine fired the weapons, the longest range missiles Washington has supplied for such attacks on Russia, on the war's 1,000th day.
The Treasury also imposed sanctions on 50 small-to-medium Russian banks to curtail the country's connections to the international financial system and prevent it from abusing it to pay for technology and equipment needed for the war. It warned that foreign financial institutions that maintain correspondent relationships with the targeted banks "entails significant sanctions risk."
"This sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military," Treasury Secretary Janet Yellen said. "We will continue to take decisive steps against any financial channels Russia uses to support its illegal and unprovoked war in Ukraine."
Gazprombank said Washington's latest move would not affect its operations. The Russian embassy in Washington did not respond to requests for comment.
Along with the sanctions, Treasury also issued two new general licenses authorizing US entities to wind down transactions involving Gazprombank, among other financial institutions, and to take steps to divest from debt or equity issued by Gazprombank.
Gazprombank is a conduit for Russia to purchase military materiel in its war against Ukraine, the Treasury said. The Russian government also uses the bank to pay its soldiers, including for combat bonuses, and to compensate the families of its soldiers killed in the war.
The administration believes the new sanctions improve Ukraine's position on the battlefield and ability to achieve a just peace, a source familiar with the matter said.
COLLATERAL IMPACT
While Gazprombank has been on the administration's radar for years, it has been seen as a last resort because of its focus on energy and the desire to avoid collateral impact on Europe, a Washington-based trade lawyer said.
"I think that the current administration is trying to put as much pressure and add as many sanctions as possible prior to January 20th to make it harder for the next administration to unwind," said the lawyer, Douglas Jacobson.
Officials in Slovakia and Hungary said they were studying the impacts of the new US sanctions.
Trump would have the power to remove the sanctions, which were imposed under an executive order by Biden, if he wants to take a different stance, Jacobson said.
After Russia's invasion in 2022, the Treasury placed debt and equity restrictions on 13 Russian firms, including Gazprombank, Sberbank and the Russian Agricultural Bank.
The US Treasury has also worked to provide Ukraine with funds from windfall proceeds of frozen Russian assets.