An unprecedented amount of Saudi oil money is making a big impact on e-sports

The eight-week Esports World Cup was the launch party for Saudi Arabia’s growing video game industry. It’s hard for struggling companies in the sector to resist Saudi investment in the industry, but not all players are happy about it.

Over the weekend, thousands of fans flocked to the streets of Riyadh in the capital, kept cool by steam machines in the 43-degree heat. In the center of the city, a 10-meter-high golden trophy towered over the onlookers. The country defined by tradition held the first e-sports world cup. The goal of the Saudi government is to make the country not only dependent on oil revenues: as part of their economic diversification plan, they will invest $38 billion in video games by 2030 through the state investment fund PIF, which manages $700 billion.

The country’s influence in video games already extends far beyond its borders. The industry has been through a financially difficult year, with many development studios closing and mass layoffs worldwide. And in the background, many of the world’s major video game companies have quietly partnered with the oil-rich Saudis. Financed by PIF through acquisitions Savvy Games Group now owns 40 percent of the entire e-sports market. PIF and its affiliates have spent roughly $6 billion on acquisitions of gaming companies and $14 billion on equity investments. “They’ve used unlimited resources to do pretty much whatever they want,” said gaming and esports analyst Rod Breslau.

Some critics see the investments as “game-washing,” an attempt to gloss over the country’s reputation and human rights abuses through entertainment and tourism, as has been seen in the past with professional golf and soccer tournaments. Some players condemn the country’s participation and will boycott the events. And it may be shocking to visitors that there are women in costume, so they are not working in a full-body chador at a conference in a country where women’s rights have historically been very limited.

But with Saudi money everywhere in the world of esports, it’s getting harder to avoid. “We’ve gotten to the point where if you draw the line and say, ‘I’m not working for a Saudi-owned company,’ or ‘I’m not going to Saudi Arabia,’ your career in esports is probably going to be very short-lived,” Parker said. Mackay, an esports presenter who resigned from his position on an awards judging panel in June after partnering with a Saudi-funded organisation. “Three years ago, I would have had my own prejudices when I thought about the Saudis,” said Ralf Reichert, CEO of the Esports World Cup Foundation. “At the end of the day, everyone has to decide for themselves what they’re willing to do. I just invite people to come and see.”

Saudi Arabia, which once effectively banned movie theaters and severely restricted tourism, is now pouring wealth into sports and entertainment at an astonishing rate. The 38-year-old Crown Prince Mohammed bin Salman is an avid gamer. In addition to buying up game publishers and hosting extravagant e-sports tournaments, the Kingdom of Saudi Arabia has its own e-sports district builds a settlement 50 kilometers west of Riyadh called Qiddiya.

PIF poured a lot of money into publicly traded video game companies. His stock portfolio includes $3.4 billion in Electronic Arts, $1.7 billion in Take-Two Interactive and $5.2 billion in Nintendo, according to Nasdaq data. Nintendo’s 8.3 percent stake makes it the largest outside investor in the Japanese company, according to Japanese official data. The fund also had a $3.3 billion investment in Activision Blizzard before it was acquired by Microsoft. PIF created Savvy Games Group in 2021 to manage its planned $38 billion investment in the industry. The fund hired Brian Ward, former director of Electronic Arts and vice president of Activision Blizzard, as the company’s CEO.

As part of the government’s plan to create 250 video game development companies and 39,000 new jobs on Saudi soil, Savvy Games Group and other PIF-funded companies have recruited top game development talent from the United States and Asia. In June, the U.S. Embassy of Saudi Arabia launched an exchange program to match young Saudi game developers with Americans. Savvy Games Group has already acquired several key industry players, including the Electronic Sports League, which is to esports what the PGA Tour is to golf, and Scopely, the game studio behind Monopoly Go. The company also acquired digital esports platform Faceit, which it combined with other esports properties under the name Electronic Sports League Faceit Group, or EFG.

In January, Activision Blizzard partnered with EFG to revive the esports base of its popular game, Overwatch, which was shut down a few months earlier. In May, EFG provided funding to Rolling Stone to create a new games editorial. At the Esports World Cup in Riyadh, players competed for a share of the $60 million prize pool, the largest ever at such an event. According to Reichert, the competition is “a beacon in the world’s sporting calendar”. The eight-week event was organized by the Saudi Esports World Cup Foundation, a Saudi non-profit organization.

The foundation relied on big-name partners to spread its influence. In March, Sony became a founding partner of the tournament and will produce an Esports World Cup documentary. In June, Warner Bros. Discovery partnered with the foundation to broadcast the event on CNN. Hours before the tournament’s opening ceremony, two dozen well-followed gaming influencers posted links to their livestreams on X with the hashtag #EWCPartner. Some esports teams are trying to make a social statement while still accepting Saudi money.

Team Liquid – an esports team known for promoting diversity and inclusion in the sport – wore jerseys with the Pride logo during the competition. In the weeks leading up to the tournament, the team leaders thought about what it means to play in Riyadh. “It’s thought-provoking to be in a region of the world where the human rights record is quite negative,” said Steve Arhancet, co-CEO of the team. Arhancet is open about his gayness and traveled to Riyadh alone before deciding whether to compete. Other influencers took to social media to vent to their fans about their involvement. Joshua Howard, a sports reporter for the tournament, said his 10-day contract with the Esports World Cup accounts for 20-30 percent of his annual revenue. “When you see an opportunity like that, it’s very hard to say no, and I don’t blame anyone who says no or is upset that I’m here,” Howard said.