How Saudi Arabia became a video-game superpower

“Assassin’s Creed”, a sneak-up-and-kill gaming franchise, is getting an unexpected update this autumn. Ubisoft, its French developer, recently announced a new set of missions set in Saudi Arabia (see picture below). The news followed reports earlier this year that Ubisoft had entered a partnership with Savvy Games Group, a Saudi state-owned enterprise. (Ubisoft says that the Saudi levels are being made with help from “local and international organisations”.) Players will be able to tiptoe around Al Ula, a historic city that the Saudi government is promoting as a tourist destination.

Saudi Arabia is making a multi-billion-dollar push into gaming, an industry that is now worth more than cinema, streaming or music. On September 29th the kingdom made its biggest move yet, when Electronic Arts (EA), America’s third-largest gaming company, announced that it was being bought for $55bn by a group led by Saudi Arabia’s Public Investment Fund (PIF), a $1trn sovereign-wealth kitty. It is the latest in a blitz of investment that is quickly turning Saudi Arabia into a superpower in the world of video games.

The Saudis’ partners in the EA acquisition are Silver Lake, a private-equity firm, and Affinity Partners, an investment company founded by Jared Kushner, Donald Trump’s son-in-law, whose attachment to the deal may smooth the path to regulatory approval. EA’s new owners will control franchises including “Madden”, “The Sims” and “FC” (formerly known as “FIFA”), a football series that is said to be a favourite of Muhammad bin Salman, Saudi Arabia’s crown prince and de facto ruler.

EA will be the crown jewel in an already glittering set of holdings. The PIF has endowed Savvy Games with a $38bn war chest to turn Saudi Arabia into a centre of gaming. Two years ago Savvy bought Scopely, an American developer whose “Monopoly Go!” is one of the world’s highest-earning mobile games, making more than $5bn since its launch in 2023. In May it acquired the gaming arm of Niantic, an American company which makes the “Pokémon” mobile games. Savvy also has a large stake (and board seat) in Embracer, a Swedish firm which owns titles including “Tomb Raider”, featuring Lara Croft.

The PIF itself has built up further stakes in some of the biggest names in gaming. It is one of the three largest shareholders in Japan’s Nintendo, Capcom (“Street Fighter”) and Koei (“Ninja Gaiden”), South Korea’s Nexon and NCSoft and America’s TakeTwo (the maker of “Grand Theft Auto”, a driving-and-shooting series which has sold some 450m copies to date). It is among the five largest holders of Japan’s Toei (“Dragon Ball Z”) and Square Enix (“Final Fantasy”), where it also has a board seat. Excluding EA, the PIF’s games holdings add up to $11.7bn, by our count. Other Saudi state-backed funds have additional gaming investments.

“We’re just getting started,” says Brian Ward, a Canadian industry veteran appointed to run Savvy. His team explores “hundreds” of potential acquisitions a year. Its ability to snap up good deals is enhanced by the fact that other sources of finance have largely dried up. Venture-capital funding in the game industry has fallen by some three-quarters since a peak in 2021-22, amid an industry malaise caused by plateauing mobile penetration and the loss of pandemic-era casual gamers. Joost van Dreunen, a gaming expert at New York University’s Stern School of Business, writes that the Saudi strategy is to “throw staggering amounts of money at establishing market dominance”.

Mr Ward says his instructions from Prince Muhammad are to build “a company like Disney, but for games and e-sports”. Part of that means creating a community of superfans. Disney has theme parks; the Saudis see an opportunity in live gaming tournaments. In 2022 Savvy bought ESL and FACEIT, a pair of e-sports companies, for a combined $1.5bn. It also has a 30% share of Hero Esports, a Chinese company backed by Tencent. In total Savvy says it controls 40% of the global e-sports market.

 

Its e-sports arm is not yet profitable. But its purpose is to stoke fans’ engagement—and there it seems to be succeeding. For the past two years Saudi Arabia has hosted an Esports World Cup in Riyadh (pictured top), where teams compete in games such as “League of Legends” (Prince Muhammad plays some of the pros when they are over). Some 250,000 tickets were sold for this summer’s event; online it racked up 750m streams on platforms such as Twitch and Douyin, with half the audience watching from China. Industry bigwigs fly in for a parallel conference, which has become the most important in the gaming business, according to one Western investor. Next year Riyadh will launch another tournament, a biennial Esports Nations Cup.

The justification for all this, besides indulging the crown prince’s hobby, is to create a new domestic industry. Saudi Arabia is trying to diversify its economy away from oil. Its “Vision 2030” initiative promises 39,000 jobs in gaming by that year. Savvy is training game artists at Princess Nourah University, a women’s college. The Saudi government says that 48% of the country’s gamers are women; just over a quarter of Savvy’s staff are female, a number roughly in line with the male-dominated industry standard.

A little over a third of Savvy’s employees are foreigners, a share which Mr Ward expects to fall as the industry matures. Persuading Westerners to invest or work in the kingdom is getting easier as more people see the country for themselves, says Ralf Reichert, a German who organises the Esports World Cup: “You will never be able to satisfy all the critics, but the noise around it has dramatically gone down.”

That hints at another motive. Like Saudi Arabia’s investment in sport and entertainment (it has recently launched film and comedy festivals and a Formula One grand prix), its push into gaming helps to project a different image of the country.

“There’s five to ten thousand years of human history in the Middle East, but none of those stories have been told in our medium. And that’s a huge opportunity,” says Mr Ward. The Arabic-speaking world—with 330m gamers, more than western Europe or America—is underserved, he believes, citing Japan, China and South Korea as models of how to adapt national folklore into popular games. Last year China’s “Black Myth: Wukong”, a game steeped in Chinese legends, was voted Game of the Year by users of Steam, a global gaming platform. Mr Ward says that projecting Saudi culture is not part of his mandate. But he hopes that future Saudi-made games will have worldwide appeal, just as east Asian titles have.

Many gamers wonder how Saudi ownership will influence games’ content. As China has become an important movie market, Hollywood studios have shied away from tricky subjects such as Tibet, which they were willing to take on in the 1990s. It is easy to imagine something similar happening in gaming. In 1992, in the aftermath of the Gulf war, EA released “Desert Strike”, whose villain is a fictional Arab dictator. In 2005, amid the war on terror, EA’s “Battlefield 2” pitted American forces against enemies including a “Middle Eastern Coalition”. Will such games be released under EA’s new owners? The company’s boss, Andrew Wilson, has assured staff that the priority is still “bold, expressive” fare and that the company’s “values…remain unchanged”.

The side quest

Yet the coming update to “Assassin’s Creed” shows how Saudi money might subtly sway content. It is not the only example. In March fans of “Fatal Fury” were surprised to learn that the latest edition of the fighting game would include a new character: Cristiano Ronaldo. In the game the Portuguese footballer whacks opponents with a fiery ball and is “an unstoppable force, even to seasoned fighters”.

The unusual collaboration may have a Saudi explanation. Mr Ronaldo is the captain of Al Nassr FC, a team based in Riyadh, which is majority-owned by the PIF. The Japanese developer of “Fatal Fury”, SNK, is majority-owned by the MiSK Foundation, a Saudi non-profit organisation—whose founder and chairman is a certain games-loving crown prince.