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.



Riyadh Season: Economic Driver Attracting Local, Foreign Investment

People attend the opening ceremony of Riyadh Season 2022. (Asharq Al-Awsat)
People attend the opening ceremony of Riyadh Season 2022. (Asharq Al-Awsat)
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Riyadh Season: Economic Driver Attracting Local, Foreign Investment

People attend the opening ceremony of Riyadh Season 2022. (Asharq Al-Awsat)
People attend the opening ceremony of Riyadh Season 2022. (Asharq Al-Awsat)

The Riyadh Season events are emerging as a key economic driver, drawing both local and international capital. Private sector companies see it as a rewarding opportunity due to the substantial increase in attendance, which reached over 20 million last year, double the 10 million who attended the inaugural 2019 season.

Turki Al-Sheikh, Chairman of the General Entertainment Authority, said a press conference will be held on Aug. 28 to unveil significant surprises during the upcoming edition.

Experts believe this year’s Riyadh Season will attract even more visitors, pointing to the efforts of the General Entertainment Authority that align with the government’s goal of reaching 150 million annual visitors by 2030.

Businessman and entertainment investor Majid Al-Hokair told Asharq Al-Awsat that the upcoming edition will feature some of the world’s largest entertainment events. He expected a wide range of exciting developments and major surprises, highlighting the substantial support and growth potential of the sector in the Kingdom.

The entertainment industry in Saudi Arabia is becoming increasingly attractive to both foreign and local companies seeking profitability in a high-traffic sector, he noted.

He underscored the General Entertainment Authority’s efforts to facilitate company investments in all events related to Riyadh Season and other activities across the Kingdom.

The country has introduced and amended regulations to encourage and simplify private sector involvement in economic activities, he remarked, adding that the entertainment sector is crucial for national income, job creation, and attracting both international and local investments.

Legal Advisor and Professor Dr. Osama Ghanem Al-Obaidi told Asharq Al-Awsat that tourism plays a vital role in driving the national economy by creating numerous jobs and generating foreign currency. Tourism contributes about 5% to global GDP and is a major source of foreign currency for many countries.

He further noted that Riyadh Season helps position Saudi Arabia as a global hub for major entertainment events.

The Riyadh Season is a vital opportunity to introduce Saudi Arabia to the world, particularly the capital city, improving quality of life through entertainment and boosting the country’s status as a global tourist destination in line with Vision 2030, he concluded.

The General Entertainment Authority recently launched a business services platform through the Saudi Business Center to streamline and facilitate the processes for starting and operating businesses. This initiative aims to simplify access for companies to all investment-related requirements in this sector.

Additionally, the authority introduced a business accelerator to support startups in the entertainment sector and its various fields, aiming to expedite their growth, build capabilities, and facilitate connections with investors.