The Saudi Arabian Public Investment Fund (PIF) has announced that it has acquired a minority stake in Japanese publisher Capcom, known for the Resident Evil, Monster Hunter, The Devil May Cry, and Street Fighter franchises, Bloomberg reports. The Saudi Arabian Public Investment Fund (PIF) has bought minority stakes in Japanese gaming companies Nexon Co. and Capcom Co. as the sovereign wealth fund continues to bet big on the fast-growing sector. This is not the first billion PIF used to buy video games, as more than $3 billion was used to buy shares in Activision Blizzard, Electronic Arts, and Take-Two in December 2020.
Using its public investment fund, Saudi Arabia has acquired large stakes in EA, Take-Two Interactive, and Activision Blizzard, and has now bought a stake in Capcom, developer of Resident Evil and Monster Hunter, and South Korean mobile developer Nexon. The Public Investment Fund, Saudi Arabia’s sovereign wealth fund, is taking its investment in video game companies to the next level by acquiring a combined stake of more than $1 billion in gaming companies Capcom and Nexon. Bloomberg reports that the national government investment fund was used to invest more than 5% of the shares in both Capcom and Nexon. This includes the state investment fund of Saudi Crown Prince Mohammed bin Salman, which has previously bought significant stakes in companies such as SNK, EA, and Take-Two.
It is not clear how much of the fund was used for each investment, but an estimate already exists. It’s unclear how much of each fund’s investment is earmarked, but the report says Capcom and Nexon’s investment together is in excess of $1 billion. According to this report, he jointly invested over $1 billion in Capcom and Nexon. The amount of the deal was not officially disclosed, but according to Bloomberg, the price exceeded $1 billion. The deal provided for the purchase of shares at $95, but in December they fluctuated between $79-$91 a share.
While PIF’s stake in Nexon is valued at about $883 million, its stake in Capcom is valued at almost $332 million, the report said, citing the fund’s regulatory filings. Additionally, Capcom’s PIF stake appears to be valued at around $332 million based on Friday’s share price. In addition to investing in video games, PIF also owns stakes in Uber, the live events conglomerate Live Nation Entertainment and also owns 80% of Newcastle United.
These operations are carried out by the Saudi Arabian Sovereign Public Fund (PIF), which aims to diversify the kingdom’s economy, which remains heavily dependent on oil. Additionally, thanks to this move by Saudi Arabia investment in Nexon and Capcom, the Japanese games industry received an economic boost as shares of Osaka-based Capcom, which also considers Monster Hunter one of its successful franchises, surged 1.7% after the disclosure on Friday. February 4, 2022, although the underlying Topix index fell 0.2%. The report for the third quarter, from September to December, of the fiscal year 2021 showed that 5.7 million copies were sold. In addition to the new PIF investment, in 2022 Microsoft already offered to buy Activision Blizzard for $68.7 billion, while Sony tried to buy Bungie for $3.6 billion.
