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Saudi Arabia recently completed the $55 billion acquisition of Electronic Arts (EA) through a consortium spearheaded by the Public Investment Fund (PIF), Silver Lake and Affinity Partners.
The Kingdom is looking to graduate from being a major market for games to becoming a massive influence over the companies, intellectual property and infrastructure that power the industry.
EA, the publisher behind renowned titles such EA Sports FC, Battlefield and The Sims, announced that it had gone private as of August 4. Many people are concerned by the move.
The purchase gives the Saudi gaming portfolio one of the world’s biggest established publishers, with recognised franchises, stellar distribution reach and decades of expertise.
From Buying Companies to Building Companies
Saudi Arabia’s National Gaming and eSports Strategy set ambitious targets for 2030, including 250 gaming companies, 39,000 jobs and a SAR50 billion contribution to the economy.
One goal is for the Kingdom to develop games that compete for attention with international counterparts. This EA purchase can bring that plan to fruition.
For the modern Saudi gaming scene to thrive, it needs programmers, producers, artists, marketers, publishers and executives who know how to build commercially successful titles.
These acquisitions can give Saudi Arabia access to that expertise, but it will be intriguing to see whether this talent and intellectual property take root in the Gulf nation.
Thankfully, there are already exciting signs of movement in that direction.
Savvy and NEOM agreed to connect Savvy’s Nine66 incubation programme with NEOM’s Level Up accelerator to create a pathway for Saudi gaming start-ups to move from incubation to acceleration.
Creating this local pipeline might ultimately be more important than more high-profile acquisitions.
Qiddiya Could Become the Physical Centre
The next part of the equation is infrastructure, and Qiddiya City’s Gaming & eSports District is poised to be the go-to physical destination for the industry.
It will have four eSports arenas, facilities for professional clubs and space for regional headquarters of over 30 gaming companies. The district will amalgamate eSports, casual gaming and digital entertainment.
Saudi Arabia wants tournaments, tourism, retail, entertainment, training, business headquarters and games to move in tandem, creating a cycle.
Major events will attract international audiences who create increased demand for hotels, restaurants and entertainment.
Saudi Arabia has already played a key role in establishing the eSports World Cup, and Qiddiya’s development will help bolster the gaming vision.
It is all part of a grand plan as Saudi Arabia aims to establish itself as the industry’s focal point.
Commercial Gaming is a Different Proposition
Saudi Arabia is executing a comprehensive gaming strategy, but many experts feel it is missing a trick by refusing to tap into iGaming.
Gambling is a lucrative avenue through which the government can earn taxes and licensing revenue, bolster tourism and boost non-oil income alongside gaming.
The casino sites featured on comparison platform https://saudia-online.com/ welcome Arab players, but they operate under licences issues elsewhere.
However, regulated casino gambling could truly thrive in Saudi Arabia alongside video games, eSports and other forms of interactive entertainment if the government released the brakes.
The United Arab Emirates (UAE) is already seizing the opportunity, having established the General Commercial Gaming Regulatory Authority (GCGRA) to oversee gambling operations.
The UAE is set to open its first integrated resort featuring a casino next year, while it has launched a digital sports wagering platform.
Saudi Arabia could design a well-thought-out digital gaming framework that aids its overarching gaming strategy.
EA Deal Creates a Credibility Test
There is a lot of excitement around the EA acquisition, but there are also concerns. EA employees are worried about their jobs, creative independence and the implications of Saudi ownership.
There is increased anxiety around the company’s debt as they fear aggressive cost-cutting. Those concerns mean Saudi Arabia now has something to prove.
If EA continues to deliver world-class titles while keeping creative talent happy and operating successfully, it will signal that Saudi Arabia knows how to deploy capital in the gaming industry.
However, if restructuring, job losses, and creative restrictions damage the publisher, it could be a cautionary tale about the difficulties of combining sovereign investment with creative industries.
The EA deal has to work out for Saudi Arabia’s long-term reputation.