Saudi Arabia is going all in on video games. What does that mean for the games industry? by Cody Mello-Klein October 14, 2022 Share Mastodon Facebook LinkedIn Twitter Photo by Matthew Modoono/Northeastern University There is a new power player in video games: Saudi Arabia. The Saudi government recently announced plans to dive headlong into the games industry with a $37.8 billion investment it hopes will jumpstart game development and esports in the Middle East. Axios reported that Saudi Arabia will execute on its plans through the Savvy Gaming Group, a Saudi government-funded video game company. Savvy’s investments in kickstarting a Saudi Arabian games market include acquiring “a leading game publisher” as well as creating homegrown developers and building esports organizations in the Middle East. The Saudi gaming group expects to establish 250 game companies and create 39,000 jobs, according to the Saudi kingdom’s press agency. But the announcement isn’t just creating headlines and waves in the industry. Given Saudi Arabia’s history around human rights, it’s raising a few eyebrows as well. The Saudi government claims its investment in gaming is part of its Vision 2030 plan, a comprehensive effort to boost and diversify the economy. But critics have remained skeptical of the investment, considering Saudi Arabia’s history of suppressing women’s rights and support for the war in Yemen, with some calling it the video game equivalent of “sportswashing.” Saudi Arabia has been criticized for doing something similar with the LIV Golf series. Celia Pearce, professor of game design at Northeastern, says more direct involvement of the government in the industry raises questions about how much say Saudi leadership will have in the creative process. Saudi Crown Prince and Prime Minister Mohammed bin Salman Al Saud, who the CIA confirmed ordered the assassination of journalist Jamal Khashoggi, also chairs Savvy’s board. “Obviously, the government and the prince are going to have a say in the content,” Pearce says. “I’m going to go out on a limb here and say that this particular situation is not going to help misogyny in the games industry in any way, shape or form.” There are also the underlying economic reasons for why Saudi Arabia is pushing into video games. In 2021, the games industry pulled in $214.2 billion in revenue, and that number is only expected to grow. Projections from the World Economic Forum put the industry’s revenue numbers at $321.1 billion by 2026. For a country with an oil-driven society, the idea of “future-proofing” for a post-oil economy is not surprising, says Casper Harteveld, associate professor of game design at Northeastern. What’s potentially more surprising is what Saudi Arabia’s big play in the industry could mean for the Middle East as a gaming hub. “There is quite a bit of game development and a games scene also happening in the Middle East, but there is nothing huge, so perhaps this is an opportunity because they also need to have a voice in the industry,” Harteveld says. “It cannot just be the Asian games industry and the Western games industry.” Savvy has already made its mark on the industry with a slew of major acquisitions and investments that have started to put Saudi Arabia on the map. In January, Savvy purchased esports organizations ESL and Faceit for $1.5 billion. And, in June, invested another $1 billion in The Embracer Group, the Swedish holding company that has quietly become one of the biggest names in games with 120 internal game studios and 230 games in development. Saudi Arabia has also made additional multi-billion dollar investments in some of the industry’s biggest game publishers, including Nintendo, EA, Activision and Take-Two. What this all means for gamers and the industry at large will also depend on the scope and kind of games Savvy chooses to fund and foster in Saudi Arabia. “Are they just buying an existing company and doing the same thing all over?” Harteveld says. “Or, more interestingly, are we getting more diverse, interesting games that are grounded in the culture in the Middle East?” It’s also still unclear whether developers will be given the creative freedom to tell their own culturally specific stories or if they’ll be restricted to promoting the “cultural values” of the crown prince and Saudi government, Pearce says. The Saudi government’s direct funding of a games company to help grow the industry is not the norm in games. In the past, similar to the film industry, governments have used tax incentives to attract developers and companies. That’s the case in Montreal, which since the early 2000s has become the “Hollywood of video games.” Attracting or acquiring existing developers is one way to spur growth, Harteveld says, but the scope of Saudi Arabia’s goal requires more infrastructure and education around game development than currently exists in the country. “An infrastructure requires a pipeline of talent, requires a pipeline of internet and all that,” Harteveld says. “The internet is established there, but where does the talent come from and how are they attracting the talent?” Saudi Arabia’s multi-billion dollar investment in games is also set against the backdrop of an industry that is rapidly consolidating into a handful of massive companies, which isn’t new for the industry. Games are getting more expensive to create, making them riskier propositions for publishers. Mergers are a response to those rising costs, so even as revenues continue to grow, the industry is getting smaller and smaller. Pearce likens the situation to Hollywood in the 1930s, when a few major studios ran the show and creators had little say. With Saudi Arabia, another major player, entering the gaming arena, Pearce fears the worst parts of the games industry–harsh working conditions, pervasive misogyny–will only get worse. “I have a feeling that if there’s more of these mergers and then countries like Saudi Arabia start to get involved, the labor situation is probably going to get worse,” Pearce says. “If they do become a game development hub, is it just going to be worse than the nightmare of the U.S. game industry with the lack of diversity and gender representation, misogynistic practices? I’m hoping that somehow won’t happen.” For media inquiries, please contact firstname.lastname@example.org.