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Saudi Arabia to spend $13bn on game publisher

September 30, 2022

By Chris Forrester

Saudi Arabia’s state news organisation says the oil-rich nation will spend an overall $37.8 billion  (€38.5bn) on the games industry. This amount will include around $13 billion on a “leading game publisher”.

The cash will come from the kingdom’s Savvy Games Group which is owned by its Public Investment Fund (PIF) sovereign wealth fund, one of the world’s largest.

A report from investment bank Exane/BNPP says the move reflects Savvy’s wish to become a major player in the video games industry.

“The investments will include 70 billion Saudi riyals (€19bn) to take minority stakes in several ‘key companies’ that support Savvy’s game development agenda, and 50 billion riyals) to acquire “a leading game publisher to become a strategic development partner”.

In addition, Saudi Arabia state news said 2 billion riyals would be reserved for investments in “industry disruptors to grow early-stage games” and esports companies. Finally, 20 billion riyals will be invested into “mature industry partners” who add value and expertise to Savvy’s existing portfolio.

The bank’s note says that, if the report is accurate, the $13 billion acquisition figure, would be too low to make a bid on large publishers such as EA or Take Two but it could potentially secure a deal for most others.

Exane/BNPP adds: “There are about 8 listed companies with market capitalization between US$3.5bn and US$7.2bn that could fit with the statement. These include: Krafton (US$7.2bn), Capcom (US$6.8bn), Konami (US$6.7bn), Embracer (US$6.1bn), Square Enix (US$5.3bn), NC Soft (US$5.1bn), Cyberagent (US$4.4bn), Ubisoft (US$3.7bn). Savvy could also be interested in Warner Bros video game business which is part of Warner Bros Discovery.”

The Saudis already have about $10 billion invested in the games sector.

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