Jun 8, 2022 - Technology

Saudi Arabia invests $1b in Embracer Group gaming corporation

Illustration of a Riyal coin in a CD tray of a gaming laptop.
Illustration: Aïda Amer/Axios

Saudi Arabia is rapidly assuming a significant financial stake in the video game industry.

Driving the news: The government-funded Savvy Gaming Group announced a $1 billion investment in the Embracer Group, the gaming corporation that most recently acquired the rights for Tomb Raider and the main studio behind that series.

  • The purchase gives Savvy an 8.1% share of the company and 5.4% of the voting power.
  • Sweden-based Embracer Group was the most active purchaser of video game companies in 2021, acquiring 22 studios as well as acclaimed Borderlands-maker Gearbox.

What they’re saying: Embracer CEO Lars Wingefors described the investment as an opportunity to expand Embracer’s reach into the Middle East and North Africa region, “either organically, via partnerships, joint ventures, or via acquisitions of companies led by strong entrepreneurs."

Between the lines: It’s at least the seventh big spend on gaming this past year by the kingdom under Crown Prince Mohammed bin Salman.

  • In January, the government announced the formation of Savvy. The group's CEO Brian Ward later told Axios it was the largest investment in the 50-year history of the kingdom’s wealth fund. The group immediately announced the $1.5 billion purchase of two esports groups and said it aims to become the leading games and esports group domestically and internationally.
  • In February, the fund said it secured a more than 5% stake in Capcom and Nexon for more than a combined $1 billion, Bloomberg reported.
  • Later that month, Bloomberg reported $3.3 billion of Saudi investment in U.S. gaming giants EA, Take-Two and Activision.
  • In May, Crown Prince Mohammed’s foundation announced a 96% ownership stake in another long-running Japanese video game company, SNK (Metal Slug, King of Fighters).
  • Also in May, the fund secured a 5.01% stake in Nintendo, which the company told Bloomberg it learned about from news reports.

The big picture: Saudi officials have said the investments will help modernize the kingdom, but they carry the heavy baggage of the country’s much-criticized human rights abuses.

  • The highly controversial Crown Prince Mohammed, who chairs Savvy's board, has overseen his country's devastating war in Yemen and been implicated in the brutal assassination of journalist Jamal Khashoggi.
  • In an interview with Axios in March, Ward distanced the company from the government and argued, with notes, that the kingdom had improved opportunities for women.
  • Saudi’s deep investments in new sectors nonetheless raise suspicions of a company trying to change — or launder — its reputation, a saga now playing out in the world of golf as the kingdom sets up a rival to the long-running PGA.

Go deeper: Interview: New Saudi gaming company is well-funded and controversial

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