Savvy Games Group’s $38 Billion Investment: What Does It Mean For Esports?
Published: Sep 30, 2022 - Last Updated: Oct 5, 2022
Savvy Games Group (SGG), part of Saudi Arabia’s Public Investment Fund (PIF), has announced big plans to do with the esports industry. Saudi Arabia is aiming to turn itself into a hub for esports by 2030 by investing close to $38 billion (SAR 142 billion) in the industry. The Crown Prince Mohammed bin Salman bin Abdulaziz himself serves as the Chairman of the SGG board and has revealed the broader reason for this move.
“We are harnessing the untapped potential across the esports and games sector to diversify our economy, drive innovation in the sector and further scale the entertainment and esports competition offerings across the kingdom.”
Where will the money be spent?
According to a release, the plan is to divide the investment into four parts. Most of it, around $18.7 billion, is likely to go towards picking up minority stakes in publishers from the esports and video game industry. Apart from that, a whopping $13.3 billion is being set aside to purchase a “leading game publisher”, although the identity of this company has expectedly been kept under wraps.
The next big outlay, around $5.3 billion, is likely to go partners who will help SGG strategically around the world. Another $533 million is slated for nurturing gaming and esports companies within their realm. All told, this is a significant amount of spending that could completely change the industry.
Nine66, VOV, ESL FACEIT Group (EFG), SGG and one other studio – all organizations with an association with the industry- are expected to fund the investment. This isn’t the first splurge that SGG have made in the gaming and esports industry, having bought stakes in Activision Blizzard Inc., Electronic Arts Inc. and Nintendo Co.
To make this work, Brian Ward, former head of worldwide studios at Activision Blizzard, has been put in charge as SGG’s CEO – a telltale sign of just how serious SGG and Saudi Arabia are about this plan.
Is there precedence to this?
This investment feels bigger and more significant than previous investments in the industry. It’s hard to think of any other group that might be capable of matching the outlay. This is excellent for esports but questions of ethics will certainly rise in many corners, with many deeming this as sportwashing – a term defined by Amnesty International as a way to clean an individual, group, corporation, or government’s image in the public sphere.
The PIF’s takeover of English Premier League team, Newcastle United, and the formation of LIV Golf has led to many talking points around the sporting world and similar questions will be raised in the esports world.
Those questions were already raised when SGG purchased ESL Gaming from Sweden-based Modern Times Group for $1.05bn and FACEIT for $500m to form EFG, who were mentioned earlier.
Most of the criticism has been levelled against Saudi Arabia’s anti-LGBTQ+ laws and its interventions in Yemen. Discussions on sportwashing have only increased after Russia’s intervention in Ukraine, with many Russian oligarchs having stakes and owning many sports teams prior to the sanctions.
Advocates of this move will talk about a burgeoning industry that could give rise to a lot of jobs and contribute to the country’s GDP – the release states that the aim is to “create 39,000 jobs and boost GDP by $13.3 billion by 2030”.
The debate will go on but this plan almost certainly looks like it’ll be put into action soon.
