Beyond paying economic dividends, there are social and cultural interests at play in the Saudi gaming industry.
Mo Harkous (MoAuba) of Germany in action against Mosaad Aldossary (Msdossary) of Saudi Arabia in the FIFA eWorld Cup Final 2019 (REUTERS/Tom Jacobs)Sussan Saikali
Research Associate, AGSIW
In a keynote address during the 2022 LEAP tech exhibition in Riyadh, Minister of Communications and Information Technology Abdullah Alswaha announced more than $6.4 billion in Saudi investments in future technologies. These investments include support for entrepreneurs, contributions to the expansion of the digital and cloud sector, and funding for esports and gaming – a rapidly growing industry in the kingdom.
Investments in the esports and gaming industry serve to advance the country’s economic diversification plans associated with Vision 2030, but they are also a direct response by the Saudi government to the growth of gaming culture. Beyond paying economic dividends, there are social and cultural interests at play in the Saudi gaming industry.
Diversifying Revenue
A pillar of Vision 2030 is to promote non-oil industries in an effort to diversify the economy away from hydrocarbon revenue. One strategy is investing in sources of nontraditional revenue, such as gaming and esports. Gaming refers to the act of playing video games, with or without an audience, while esports (short for electronic sports) focuses on professional and competitive video gaming, typically with an audience. While gaming can be competitive, esports competitions come with high risks and high rewards – with only one winner left standing.
The gaming industry, including both video games and esports, in Saudi Arabia is rapidly growing. The Saudi gaming market hit $1 billion in 2021 and is expected to reach $6.8 billion by 2030. With the largest market in the region, Saudi Arabia is the Gulf’s gaming powerhouse. The United Arab Emirates and Egypt are the next regional competitors, reaching $520 million and $172 million in revenue in 2021, respectively. The three states combined are forecast to generate $3.1 billion in total gaming revenue by 2025.
Global esports had its largest-ever audience in 2021, with a viewership of 465.1 million people – up 6.7% year on year. Commercial revenue for esports is expected to jump almost 50% to $1.62 billion in 2024, from $1.08 billion in 2020, according to Statista. This projected increase in revenue has encouraged continued investment in the esports industry. For instance, in October 2021, FaZe Clan, a professional esports and entertainment organization, announced that it would go public through a special purpose acquisition company valued at $1 billion – the first time an esports organization raised capital from the public market. A few months later, Saudi Arabia’s Ministry of Communications and Information Technology collaborated with game design academy DigiPen to launch the Game Changers program. The program is designed to provide unique career pathways for entrepreneurs in the Saudi gaming industry and increase the number of independent game company startups. These initiatives build upon purchases of video game companies that the kingdom has made in the past, such as the investment in SNK, a Japanese video game publisher, by Saudi Crown Prince Mohammed bin Salman’s Misk Foundation.
The involvement of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, in the gaming industry signals its growing importance for the kingdom. In late January, the PIF launched the Savvy Gaming Group to develop its gaming industry. The group, headed by Mohammed bin Salman, has acquired ESL Gaming, a German esports organizer and production company, and FACEIT, a British esports platform. According to a PIF statement, this launch aims to “create opportunities for the growth and diversification of Saudi Arabia’s economy, to help achieve the objectives of the Kingdom’s Vision 2030.”
The PIF also took a stake worth about $332 million in Japanese firm Capcom, the maker of two video game franchises, and $883 million in another Japanese firm, Nexon, an online game provider. The PIF, which has been building up its stakes in gaming and esports for the past two years, also has stakes in three U.S. video game companies: Electronic Arts, Take-Two Interactive Software, and Activision Blizzard.
Sovereign investments in Saudi Arabia’s gaming industry have grown exponentially and are expected to continue increasing. Such investments are encouraged in part by the increasing popularity of gaming and esports. According to a recent study, about 50% of the Saudi population consider themselves regular gamers, who play more than once a month. Another study included more avid gamers in its count, revealing that the kingdom is currently home to 23.5 million gaming enthusiasts – approximately 67% of the population. While a majority of the population plays video games and esports as a hobby, there is a small but growing number of professionals, with about 100 professional esports players.
Gaming Culture
In addition to increased economic diversification, state investments in gaming and esports are reflective of the growing cultural interests in the industry, empowering Saudi youth to participate in gaming and esports.
As gaming and esports increase in popularity in the country, esports tournaments and gaming competitions are also increasing. The Saudi Arabian Federation for Electronic and Intellectual Sports held its first esports and gaming tournaments in 2020 and has more planned. Other tournaments are hosted by private platforms such as the Saudi-based Kafu Games.
Many Saudi players have also traveled abroad for international tournaments. In 2015, Abdulaziz Alshehri became the first Saudi to win the FIFA Interactive World Cup. In 2018, Mossad Aldossary followed and was crowned FIFA eWorld Champion, and he won first place in the 2019 FIFA Champion Cup as well. Najd Fahd won the FISU eSports Challenge’s female tournament, a FIFA20 competition, in 2020, becoming the first Saudi woman to win an e-football title. The demand for e-tournaments extends beyond the growing number of gamers, as physical and virtual audiences continue to grow and watching esports and video games gain popularity as a form of entertainment.
To further stimulate the growth of the industry, the Saudi government has also launched several initiatives to support aspiring gamers, esports players, and programmers. For instance, Saudi Arabia’s General Authority for Competition gave Neom and MBC approval to establish a video game studio and an esports academy as part of the Neom smart city development. Both initiatives aim to provide resources for aspiring gamers and encourage competition. In addition, Tuwaiq Academy’s Tuwaiq 1000 Bootcamp has offered courses for beginners interested in learning how to program and professionals who want to refine their programming skills.
Despite these initiatives, state support for the industry has its limits. The country’s 100 pro-esports players make up only 0.005% of gamers globally. The United States and France have six times the proportion of professional versus amateur gamers, and South Korea has eight times more. Saudi gamers and esports competitors face many structural and societal barriers, such as access to resources and social stigmas that look down upon both video games and gamers. Even as the Saudi government invests in tournaments, programming classes, and other aspects of the gaming industry, there remains a scarcity of local competitions. Also, there is a lack of state funding to compete full time, so there is no clear pathway to becoming a professional player, especially with the social stigma from mainstream society, which considers professional gaming an unacceptable and unreasonable career choice. However, Saudi gamers are finding ways around these barriers and slowly developing the gaming culture in the kingdom.
A Place in a Globalized Industry
Increased financial and social investment in gaming and esports provides Saudi Arabia the opportunity to tap into a fast-growing global industry and strengthen its international reputation. With strong state support, Saudi gamers are encouraged to grow more involved in the industry and interact with their global counterparts in new ways, further enhancing the influential change gaming has had on Saudi youth culture. The gaming industry is likely to enjoy growing support from the Saudi government, more participation from citizens and residents, and greater interest from private firms over the coming years.
Sussan Saikali
is a research associate at the Arab Gulf States Institute in Washington.
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