$38 Billion, Saudi Arabia & eSports Capital of The World

By Staff Reporter

With planned investment of around $38 billion over the next five or so years, Saudi Arabia is set to become the eSports capital of the world.

Crown Prince Mohammed Bin Salman and his government have already ploughed millions into their Public Investment Fund (PIF) for eSports and video games, buying up shares in Nintendo, Activision Blizzard and Electronic Arts. Earlier this year Savvy Games Group – owned by the PIFbecame the biggest equity holder in Chinese Tencent Holdings’ eSports company VSPO. Saudi Arabia also owns giant eSports tournament organisers FACEIT and ESL.

And it’s not just in the online world that Saudi Arabia is making a splash. Looking at world sports in general there was the controversial Saudibacked LIV Golf tour last year. The eight-tournament event incensed the US Professional Golfers’ Association but with the backing of the Public Investment Fund behind it, that didn’t really matter to organisers of LIV.

The appetite for hosting real life matches, eSports and gaming is high throughout the Middle East. Abu Dhabi has signed with Chinese game publishing and e-sports company SAWA Group to bring a gaming library to Arabic speakers in the Middle East and North Africa (MENA). This is by virtue of its partnership with AD Gaming.

And who could forget the global audi - ence that the FIFA World Cup 2022 brought to Qatar? The event wasn’t gaming based, of course, but it did boost the country’s hospitality sector and place it on the world stage –proving it has the infrastructure to host giant sports tournaments in the future.

During the World Cup Qatar managed to launch a gaming facility in order to capitalise on all theworld attention and increased tourism. A joint initiative between Qatar Esports Federation and Quest Esports of Doha, local tournaments were held for online matches such as FIFA, Fortnite, Dota 2, CS: GO and PUBG Mobile. Meanwhile, Qatar is also getting a name for hosting successful F1 Formula racing tournaments.

Dubai featured Indian Premier League cricket last year and, at the same time, is proving itself another big player in Middle Eastern gaming and eSports. The Dubai Esports Festival (DEF) is a 12-day event which last year attracted 14.2 million visitors. Gamers from around the world fought for up to $2m in total prize money. Minecraft and Honor of Kings were two of the more popular games.

Dubai is also set to launch a Gaming Centre at the Dubai Multi Commodities Centre (DMCC) in a bid to boost the esports industry there. The DMCC already plays host to around 50 gaming companies, such as developers, tournament organisers and even eSports teams. A series of games are tournaments are already being discussed for the future.

With all this interest in the region, it’s not surprising then that last year the Middle East drummed up enough enthusiasm to host the first MENA Gaming & E-Sports Summit. This year’s conference will be held in Dubai in June.

According to the Conference organisers there are currently more than 377 million gamers in the Middle East – 90 per cent of them belonging to Gen Z. Of that figure, around are 21 million gamers live in Saudi Arabia. Analysts at Niko Partners say that accounts for around 58 per cent of the Saudi Arabia’s population. That’s not too far behind America, with 66 per cent of the population gaming regularly.

The figures forgaming in MENA just keeps on escalating. The region reported annual growth of 25 per cent last year. It means the Middle East now makes up 3.2 per cent of global gaming revenue. This is expected to grow by 56 per cent by 2026, with worth for the region of around $2.79 billion.

But back to the Middle East and Saudi Arabia’s Savvy Games Group. The company have a strategy which focuses on game publishing and development. Their own game publishing company is already in development. With an 8.3 per cent share in Nintendo, Saudi is now the biggest shareholder in the company outside Japan. It holds a similar number of shares – 8.1 per cent – in Giant Swedish gaming company Embracer Group.

Serkan Toto is CEO of the consulting group Kantan Games Inc. He says: “Saudi Arabia acts with a sense of urgency here and wants to be in as many meaningful deals as possible — ahead of other countries that might jump on the bandwagon later.”

The plan of Crown Prince Mohammed Bin Salman and his team is to encourage leading gaming companies to help set up Saudi’s gaming publishing empire in the Middle East and North Africa. Another idea is to develop new IPs.

“Part of our mandate is to help partners and other companies come to Saudi and choose Riyadh over some other place to establish a publishing business or distribution business to serve the region,” explained Savvy’s Chief Executive Officer Brian Ward.

The former Microsoft executive is keen to make Riyadh the biggest gaming hub in the region. To the extent that he is convinced Savvy will succeed in attracting players to new gaming and esports venues. This is via the currently nonprofitable ESL. Ward is confident though that, like F1 racing in recent decades, gaming can also easily become mainstream.

As for the development and publishing side of gaming in Saudi, home grown talent is weak. This is despite the establishment of the Saudi Esports Federation’s e-sports academy back in 2017 – an organisation focused on providing professional gamers and expanding the industry in the region. At the same time,

AD Gaming’s Train the Trainer programme has produced more than 50 professors and 500 students in universities throughout the United Arab Emirates to date. These individuals will, in turn, help produce the next generation of game players and developers.

Bahrain has local accelerators’ Flat6Labs who, together with gaming community Unreal Bahrain, runs boot camps for rising gaming talent. A game development course is on the syllabus at the country’s Polytechnic.

But training and educating skilled individuals in the sector can take time. Just ask Saudi Arabia. In a bit to speed things up a bit, Savvy has currently earmarked $13 billion with the sole purpose of acquiring a game publisher to help bring forward its far-reaching future ambitions.

With the help of Nine66, the company is set to localize and publish up to eight games, around half of which are already availableto play now.

There is one hurdle that may be difficult for Saudi Arabia to overcome though. The country’s government is known throughout the western world for it is human rights abuses, including its antiLGBTQ+ laws and it is tendency to treat women as second-class citizens.

Riot Games’ League of Legends European Championship pulled out of a partnership with Saudi’s smart city Neom due to a backlash. Similarly, a petition from 13,000 fans caused Ubisoft to move its Rainbow Six Siege eSports tournament from the Emirates.

Explaining its decision in a press release, Ubisoft later said: “We want to stress that the safety and wellbeing of our event’s participants and staff is always our primary concern, and we are proud of what Rainbow Six Siege represents as a world where diversity, inclusion and acceptance are at its core.”