Saudi Arabia extends its embrace of the world of video games

The fans flooded through the streets of Riyadh, Saudi Arabia, by the thousands, kept cool by mist machines in the 110-degree heat. A 30-foot-tall replica gold trophy towered over onlookers at the city’s center. For a moment, covered in beams of brightly colored light, a country defined by tradition looked futuristic.

It was the inaugural Esports World Cup, a coming-out party for Saudi Arabia’s growing video game industry. As part of its plan to diversify its economy from oil, the Saudi government has said it will invest $38 billion in video games by 2030 through its Public Investment Fund, known as the PIF, a wealth fund that manages $700 billion.

The wealth behind that commitment was on full display in Riyadh, the Saudi capital, in July, but the country’s influence in video games now extends far beyond its borders. In what has been a financially difficult year for the industry, which has seen mass layoffs, many of the world’s largest video game companies and influencers have quietly partnered with the oil-rich Saudis.

Through acquisitions, a company funded by the PIF called Savvy Games Group now owns 40% of the total esports market share, a spokesperson said. (Esports are video games played by professional gamers in competitive tournaments.) The PIF and its subsidiaries have spent roughly $6 billion buying up game companies and $14 billion on stock investments.

“They’ve used unlimited resources to pretty much make whatever they want to happen, happen,” said Rod Breslau, a gaming and esports analyst.

Some critics have labeled the investments “games washing,” an attempt to polish the country’s reputation and human rights abuses with entertainment and tourism, as it has been accused of doing with its professional golf and soccer leagues. Some gamers have denounced the country’s involvement and vowed to boycott its events. And it can be jarring for visitors to see women — some of them in elaborate costumes — working at a conference in a country where women’s rights have historically been, and continue to be, very restricted.

But as Saudi money becomes ubiquitous in the esports world, avoiding it has become increasingly difficult.

“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 would probably be very short lived,” said Parker Mackay, an esports broadcaster who resigned from his position on an awards panel in June after it partnered with a Saudi-funded organization.

Along with buying up game publishers and hosting extravagant esports tournaments, the Saudi kingdom is building a gaming city with its own esports district 30 miles west of Riyadh called Qiddiya. Its companies have partnered with video game giants such as Sony and Activision Blizzard, which is owned by Microsoft, and media companies such as Rolling Stone and CNN.

Leaders of Saudi gaming organizations have pushed back on criticism of the kingdom’s financial interest in gaming.

“Three years ago, I would have had my own prejudices as well, thinking about what Saudi is and what it is not,” said Ralf Reichert, CEO of the Esports World Cup Foundation. “Ultimately, everyone needs to judge it on their own, and I just invite people to come and see it.”