Posted on: June 14, 2023, 10:58h.
Last updated on: June 14, 2023, 11:57h.
A new report suggests the Saudi Arabian government continues to invest heavily in esports and video game development, production, and distribution. The kingdom is bankrolling the investment spree through its Public Investment Fund (PIF), which reportedly has $650 billion in assets under management.
Casino.org reported in February on the Saudis investing $488 million in the video gaming and esports sector. But a report from London’s Financial Times this week claims the kingdom’s spending in the industry has swelled to more than $18 billion.
The Saudi-owned Savvy Games Group is leading the buying binge. The firm recently acquired US-based Scopely, and bought significant stakes in Chinese startup VSPO and the Embracer Group in Sweden.
VSPO specializes in the organizing and hosting of esports tournaments. Embracer is a group of businesses that develop video games tailored toward esports.
PIF also bought an 8% stake in Nintendo, making it the Japanese company’s largest outside investor. PIF additionally has significant ownership positions in Activision Blizzard and Ubisoft.
Esports are multiplayer video games that are played competitively over the internet. The games are designed to provide spectators with entertainment and an array of betting opportunities.
Several legal sports betting jurisdictions in the US allow wagering on esports, though state gaming regulators have said the markets haven’t attracted as much action as anticipated.
The bulk of the wagering is instead conducted not through legal sportsbooks, but through social channels and through skins gambling. Skins gambling and loot boxes often take place in-game between teams and players.
Esports is big business, and prominent teams are being paid big bucks to compete in marquee tournaments. For example, the prize pool for the 2021 edition of The International, the richest annual esports tournament based on the game “Dota 2,” featured a purse of more than $40 million.
There have been 40 esports tournaments since 2015 that carried a prize pool of $3 million or more, according to the website tracker Esports Earnings.
“The kingdom aims to become home to 250 gaming companies and studios and create 39,000 jobs, with the industry contributing 1% to the gross domestic product by 2030,” the Financial Times report detailed.
PIF has recently been in the global headlines not only for the fund’s investments in esports, but also for its role in the world of professional golf. PIF bankrolled LIV Golf, the controversial breakaway golf tour that lured many high-profile golf superstars with hefty signing bonuses and extravagant tournament purses.
The PGA Tour earlier this month agreed to allow PIF to make a significant investment in its organization. The announcement will resolve all litigation and antitrust lawsuits between the two entities, and result in a new, for-profit, yet-to-be-named entity that the PGA Tour will control.
PIF will be the forthcoming entity’s premier sponsor, and PIF Governor Yasir Al-Rumayyan will sit as chairman of the joint group.
PIF critics say the Saudis are using their oil riches to diversify the country beyond oil and improve the country’s public image. Saudi opponents also contend that the country assuming significant control of the PGA Tour represents “sportswashing” on the kingdom’s behalf, an effort to distract from Saudi Arabia’s poor record on human rights.
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