Saudi Arabia’s Wealth Fund Loads Up On Video-Game Makers
Saudi Arabia’s wealth fund wants to expand its investment in Hollywood with a $12.5 billion bid for Warner Music. Saudi Arabia’s Public Investment Fund has released its latest investments, which include large gaming companies. The fund, with a net worth of $200 billion, sits at $400 billion and is trying to diversify its portfolio with large investments in the gaming industry.
Saudi Arabia is expected to host major international tournaments in the future and sees the obvious untapped potential of the virtual reality (VR) market. Going forward, the adoption of state-of-the-art infrastructure such as fiber and 5G by telecommunications providers is expected to guarantee high-speed, low-latency experiences, a critical factor for players to attract them to activities such as competitions and hosting. The investment and risk opportunities are in the areas of teams, players, leagues, competitions, hosting, advertising, sponsorship, and streaming services.
On a global scale, gaming championships are becoming more important than competitive sporting events. Global coronavirus restrictions on online gaming have helped millions of people stay at home to nurture and build relationships. As Saudi Arabia is well-positioned to become a leader in this area, its gaming community is seeking recognition.
In the midst of the pandemic, games industry stocks rose as more invested. Over the past year, game companies such as Activision Blizzard and Take-Two Interactive have seen their share prices soar. Investors have shown interest, and one of the world’s largest wealth funds – by far the largest in the world – has joined the investment.
Saudi Arabia’s Public Investment Fund (PIF) has bought $3 billion worth of shares in leading US video game publishers Activision Blizzard, Electronic Arts, and Take-Two. The largest holdings of the three major video game companies are by no means small, making the Saudi Arabia Wealth Fund, the public investment fund, the largest investor in Activision Blizzard (the largest), and Electronic Arts (the second largest), as well as Take-Two Interactive. Activision Blizzard has the largest of these holdings, with the PIF buying 149.6 million shares, while the fund has also purchased 74.2 million shares in Electronic Arts and 39.7 million shares in TakeTwo Interactive.
Saudi Arabia is among a half-dozen state-backed companies that have thrown their weight behind the tech ecosystem. Take WestSummit Capital, which set aside $300 million from China’s sovereign wealth fund earlier this decade to invest in startups like the gaming platform Unity. Whether Saudi Arabia Wealth Funds “public investments will have a big impact on the big three video game companies remains to be seen, but if share prices perform positively, profits are likely to remain.
Sometime before the crown prince donated a third of Japan’s combat game maker SNK to a charity he runs called Misk. A subsidiary of the Crown Prince’s charity, the Mohamed bin Salman Foundation, has announced that it will increase its stake in SNK Corp, the Japanese developer of King of Fighters and Samurai Shodown, to 51%. With his announcement of the purchase, bin Salman will acquire a majority stake in both companies.
PIF is central to the crown prince’s goal of making the Saudi economy more independent of oil revenues. Saudi Arabia’s sovereign wealth fund has long pursued investments in the video game industry. It is also favored by Saudi Crown Prince Mohammed bin Salman, who said he was among the first generation in the kingdom to grow up playing video games.
Saudi Arabia’s sovereign wealth fund bought more than $3 billion worth of shares in three U.S. video game makers in the fourth quarter, regulators said. The fund is chaired by Saudi Crown Prince Mohammed bin Salman, who says he is the first generation in the kingdom to grow up playing video games.