Saudi influence over gaming extends far beyond esports

Over the past year, esports industry observers have focused much of excitement — or criticism, depending on who you ask — on flashy Saudi megaprojects such as the Esports World Cup and the gaming portion of Qiddiya, Saudi Arabia’s planned entertainment city. But the reality is that Saudi Arabia’s holdings in gaming go much further and deeper.

There’s the PIF’s numerous stakes in game publishers themselves, which include sizeable investments in behemoths such as Nintendo (8.26 percent), Electronic Arts (9.2 percent) and Koei Tecmo (6.6 percent), as well as complete ownership of smaller publishers such as mobile gaming publisher Scopely. Then there’s ESL/FACEIT Group, the prominent esports league operator that Savvy purchased for $1.5 billion in 2022. And that’s not to mention the multitude of smaller bets that the PIF has made in gaming, which range from a sponsorship of the annual Esports Awards to the backing of Rolling Stone’s new gaming vertical, which launched last month.

Global expansion

On their own, none of Saudi Arabia’s gaming investments are particularly likely to set off any alarm bells. When looking at the big picture, though, it becomes clear that the PIF’s gaming goals extend far beyond the nation’s borders. Saudi Arabia wants to become a global gaming hub, but it’s starting to look like it also wants to exert its influence over the worldwide gaming community.

One area in which this strategy is becoming increasingly evident is the Esports World Cup, which kicks off in Riyadh next month. It’s the first international esports event to bring many of the most popular esports under one umbrella, including “League of Legends,” “Overwatch” and — as of June 13 — ”Call of Duty.” This is exciting news for esports fans, but also shows how it has become increasingly impossible for just about any stakeholder in the gaming industry, including the big publishers, to decline Saudi money.

“The Esports World Cup, from day one, as we did not want to compete with anyone existing, was really intended to be added value for any stakeholder in the industry,” said Esports World Cup Foundation CEO Ralf Reichert. “When I talk about the stakeholders, it’s players, it’s teams, it’s fans, publishers, tournament operators, sponsors, media partners — and it’s actually the public opinion.”

Public opinion represents one of Saudi Arabia’s biggest hurdles as it pushes further into the gaming space. Though most fans and advertisers are largely unbothered by Saudi involvement in the space, a vocal minority of esports fans has protested esports companies’ acceptance of Saudi money, which they view as a tacit endorsement of the country’s documented human rights violations, which include legal discrimination against women and LGBTQ individuals, as well as the 2018 killing of Saudi journalist Jamal Khashoggi on the orders of Saudi Arabian Crown Prince Mohamed bin Salman, who serves as chairman of Savvy Gaming Group.

“Are we really OK with taking money from a government and their PIF fund when their stance is fundamentally against these groups of people?” said Scotty Tidwell, a veteran esports executive who has led the creator departments of companies such as G Fuel and Enthusiast Gaming. “You don’t have the same due process in Saudi Arabia as in the USA. The amount of mental gymnastics required to justify this is incredible.”

Esportswashing accusations

Much like Saudi investments in traditional sports such as golf have led to accusations of sportswashing, or the use of sports as a form of propaganda to paper over wrongdoings, Saudi Arabia’s growing presence in gaming and esports has sparked claims that the country is similarly engaging in “esportswashing.”

Whether intentionally or not, it’s true that many of the esports executives who have traveled to Saudi Arabia have returned parroting rosy endorsements of the country and the ways it is changing for the better.

“You’ll see people come out and tell you how well they were treated,” Tidwell said. “That’s the power of money: it tries to spin and change your perception without actually changing who you are.”

Given the majority of esports companies have not yet demonstrated an ability to turn a consistent profit, it would make sense if generating revenue, at least in the short term, was not Saudi Arabia’s primary motivation to invest further in the gaming space. (The PIF has not responded to requests for comment.)

Esportswashing accusations notwithstanding, Saudi gaming organizations like the Esports World Cup appear to be building for the long term, with the EWC signing multi-year agreements several of its participating publishers. If esports does eventually figure out how to become profitable in the long run, Saudi Arabia will be there to reap the rewards. And at the moment, the PIF one of the few investors still willing to play the esports industry’s waiting game.

“Part of the reason [previous owner Modern Times Group] MTG sold off ESL is because they were not good businesses; they were not going to make money in the near future,” said longtime esports journalist and industry observer Jacob Wolf. “They went to an investor, in the Saudis, who have the resources to wait and see. Now, whether that wait-and-see pays off is the billion-dollar question.”