Saudi Arabian authorities plan to develop the local gaming market actively
Saudi Arabia is implementing a diversification plan by developing various sectors of the economy. The gaming market has been addressed and will receive an investment of US$38 billion. The money will be invested in the video game industry. The authorities want to make the country one of the world’s game development centers.
Investment in the sector will be made through the Public Investment Fund and its subsidiary Savvy Games. The government plans to increase the value of Saudi Arabia’s gaming market to US$184 billion.
The priority for the authorities is to support cyber sports, which are lagging behind other game sectors. Therefore, Savvy Games will strengthen development in this segment, as well as acquire quality products from studios around the world. According to the company, they intend to refocus its activities on the eSports market, contributing to its expansion. However, a number of experts are skeptical about Saudi Arabia’s ambitious plans. The video game sector is now highly crowded, and even its most vital representatives cannot withstand the competition. Developer Electronic Arts, for example, has carried out massive layoffs to cut costs, and other studios are also optimizing their costs. However, such market trends are not stopping the authorities: a Saudi investment fund has already invested billions of dollars in the games business and its significant representatives, such as Nintendo and Tencent.It should be noted that Saudi Arabia has virtually no video game developers, although the number of gamers in the country is actively increasing. The local market outlook has forced the head of Electronic Arts to resign and move to the Arab country to head Savvy. According to the latest statistics, there are more than 21 million gamers among Saudis, representing 58% of the total population. By comparison, in the US, 60% of citizens are into video games. The gaming sector in the MENA region is projected to reach around US$2.8 billion by 2026, a 56% increase on current levels.
In February, the sovereign wealth fund increased its stake in Nintendo to 8.3% and planned not to stop there. The Saudis have thus become the largest shareholder in the Japanese developer. In addition, the fund owns the securities of game studios Capcom and Koei Tecmo and is actively looking for other companies to help develop the local game market. Saudi Arabia unveiled a strategy in 2016 to reduce the economy’s dependence on fossil fuels. The country’s main focus is on developing the innovation sector. For this purpose, Saudi Arabia is investing in technology start-ups and creating conditions for the emergence of new IT projects.