The approach of the Saudis to the global digital games industry
The development of G5 internet, artificial intelligence, blockchain, metaverse and many other new technologies have turned the digital open industry into an attractive and profitable investment opportunity for countries. The countries of the Middle East are also trying to use this new opportunity and enter this field. Among the countries of the Middle East, Saudi Arabia is the leader in this field.
Saudi investments in the digital games industry are among the events that show the country’s policy change to earn money from the oil industry in the field of creative industries such as digital games.
The National Computer Games Foundation, in a report in the summer of 1401, tried to investigate the reasons for this change in Saudi policy and investment in the digital games industry. This report is based on the research findings of the National Computer Games Foundation.
The development of the G5 Internet, artificial intelligence, blockchain, metaverse and many other new technologies have turned the digital open industry into an attractive and profitable investment opportunity for countries today.Digital games industry in Arab countries
The Arab world has recently seen unprecedented efforts to strengthen and support its gaming industry. The Middle East is one of the best and most stable regions to invest in the gaming industry. The reason for this is the rapidly growing market and its high demand.
According to “CCCI”[۱] The value of the global market for digital games reached 151.06 billion dollars in 2019. Meanwhile, in the Middle East, the value of the gaming industry was 4.8 billion dollars, which is approximately 3.2% of the world value.
In this report, it is predicted that Saudi Arabia, the UAE and Egypt will have a total of 85.8 million gamers, which will generate an income of 3.1 billion dollars by 2025 for these countries.
The increase in the number of emerging startups in the Middle East along with gaming events being launched in the region is a testament to the strength of its gaming market. Therefore, many American, European, Japanese and Chinese game publishers continue to try to reach this region and can only reach this market through game localization.
In a report presented by the CCCI organization in 2021, the market value of digital games in the Middle East countries is ranked as follows. Accordingly, in terms of expansion and localization of digital games, these countries bring the most profitable investments.
1_ Saudi Arabia with 680 million dollars
2- Iran with 431 million dollars
3_ Emirates with 280 million dollars
4_ Egypt with 192 million dollars
5_ Morocco with 139 million dollars
6- Algeria Algeria with 107 million dollars
7- Iraq with 105 million dollars
8- Lebanon with 102 million dollars
9- Qatar with 85 million dollars
10_ Kuwait with 80 million dollars
Digital games industry in Saudi Arabia
Saudi Arabia is the center of the game industry among Arab countries. Saudi Arabia’s 2030 vision states: Saudi Arabia uses its investment power to create a diversified and more stable economy. Saudi Arabia’s digital games industry is seen alongside other industries in the country’s landscape, providing tremendous opportunity for foreign investors and domestic developers alike.
Saudi investment in the world’s digital games industry
Saudi Arabia’s Public Investment Fund (PIF) is the country’s sovereign wealth fund. This fund is one of the largest national wealth funds in the world, whose total assets are estimated at least 620 billion dollars. In the program of this fund for the years 2021 to 2025, the digital games industry is emphasized.
Investing in “Activivision”: “Electronic Arts” and “Tick To”
Saudi Arabia’s Public Investment Fund has bought more than $3 billion worth of shares from prominent American digital game publishers Activision, Electronic Arts and Tik Tok.
Investing in “Ambrisser”
Soi Gaming Group, an investment group from Saudi Arabia owned by the Saudi Public Investment Fund, has made a large investment in Embry Head. Embry Head is a Swedish digital game holding company. The company has shared 99.99 million shares in exchange for receiving $1 billion from the Saudi Public Investment Fund, which is equivalent to 8.1 percent of the Swedish digital games and media company’s shares.
One of Saudi Arabia’s goals for the development of the digital game industry is to get rid of the economy dependent on oil and soft powerInvesting in Nintendo
In the May 2022 report of Bloomberg, the news of Saudi investment in Nintendo has been published. According to this report, the Public Investment Fund of Saudi Arabia acquired 5.01% of the shares of Nintendo, which is its third investment in a Japanese game company. Saudi Arabia has also invested $1 billion in Capcom and Nexon.
Saudi Arabia’s goals of investing in the game industry
There are several reasons why the Saudi Arabian government is interested in promoting digital gaming, other than more revenue. One of Saudi Arabia’s goals for the development of the digital game industry is to get rid of the oil-dependent economy and promote soft power.
The digital game business plays an important role in building soft power for Saudi Arabia. The consulting and strategy company “Better Skancher” estimated the value of the global game industry to be more than 300 billion dollars, which is much more than the combined music and film market.. The industry added about 500 million new players between 2019 and 2021.
Due to the increase in mobile games and the desire for social interaction during the Corona epidemic, this industry has housed a large number of startups and multinational companies. In addition to demand elasticity, the strong technological combination of blockchain and non-fungible tokens has also allowed game developers to use these tools and create virtual worlds.
In Saudi Arabia, despite the large investment and government support, the opportunity for the growth of game developers is endless, but the remarkable thing about the Saudi game industry is that success in the game industry is not just about making money, and Saudi Arabia is looking at creating soft power through digital games.