Saudi Arabia invests heavily in gaming to propel diversification
In a strategic bid to diversify its economy beyond oil, Saudi Arabia has made a resolute commitment to invest $8 billion in the gaming industry over the past year, with ambitious plans to become an international gaming hub. Spearheaded by Crown Prince Mohammed bin Salman and his transformative Vision 2030 initiative, the kingdom's move into the gaming sector is aimed at capitalising on one of the world's fastest-growing industries, which received an exponential boost during the pandemic.
The Financial Times reports that the $8 billion investment is just a fraction of the staggering $38 billion budget the kingdom has earmarked for establishing itself as a global gaming centre. This comprehensive investment plan is being facilitated primarily through the government investment fund's gaming arm, Savvy Games Group, along with active involvement from the Ministry of Communications and Information Technology.
At the heart of Saudi Arabia's gaming aspirations lies a solid national strategy for industry development, with a clear focus on esports and competitive gaming. The Kingdom aims to achieve remarkable milestones, including contributing 1% of its annual GDP (approximately $1 trillion today) through the gaming industry, generating around 40,000 jobs, and producing at least 30 new gaming titles. With a youthful population of over 65% being under 30 years old, Saudi Arabia recognises the potential of gaming as a promising avenue for economic growth, leveraging the widespread use of the internet and mobile phones.
Through strategic purchases of shares in leading global gaming companies, such as Nintendo and Activision Blizzard, Saudi Arabia's foray into the gaming industry has already begun in earnest. These investments signal the Kingdom's seriousness in cementing its position within the global gaming landscape.
However, the journey to gaming dominance is not without its challenges. A recent report from the Savvy Games Group's subsidiary, Nine66, indicates that while progress has been made with 24 local gaming startups established by the end of 2022 (almost doubling the previous year's count), there are obstacles to overcome. Many of these startups are still in their infancy, grappling with issues related to limited experience, small employee pools, and revenue generation hurdles. Women's representation in the industry also stands at 32%, indicating the need for further efforts to encourage gender diversity and inclusion.
The competition between Saudi Arabia and the UAE for regional economic hegemony is particularly evident in the gaming sector. Both nations recognise the massive potential the gaming market holds in the region, with the Middle East expected to witness a staggering $6 billion in gaming revenues by 2027. While Saudi Arabia's vast market size and substantial financial capabilities provide a clear advantage, the UAE has established itself as an attractive destination for global gaming companies due to its friendly business environment and strong regional presence.
As Saudi Arabia charges forward with its gaming ambitions, the Kingdom's optimism remains buoyed by its government's unwavering commitment to invest in both global gaming entities and the local ecosystem. Vision 2030's relentless pursuit of economic diversification sets the stage for Saudi Arabia to seize a substantial share of the booming global gaming market.
While challenges remain, industry insiders, including the 81% of Saudi entrepreneurs and gaming companies surveyed in a recent AstroLabs report, express their optimism about the local gaming industry's prospects. With the Crown Prince himself closely monitoring this personal project, Saudi Arabia's gaming transformation promises to be a fascinating narrative to observe, one that may ultimately redefine the Kingdom's economic trajectory.