I recently sat down with Arena Consultancy’s Ben Akroyd to discuss some of the major developments that are currently happening within the Middle East esports industry.
In the first part of our three-part interview, we explored Saudi Arabia’s esports strategy both past and present, the recent acquisition of gaming companies in the Middle East, possible concerns about Saudi Arabia gaming events, and potential comparisons to Microsoft’s attempted acquisition of ActivisionBlizzard.
Saudi Arabia’s esports investments have definitely garnered a lot of attention recently. Can you talk a bit about the history of the Saudi Arabia esports strategy and what impact it’s having on the gaming community and industry at large?
Well, this development first came to light in the world of football around three years ago when the Saudi Public Investment Fund/the Sovereign Wealth Fund, acquired a soccer club over here in the UK called Newcastle United.
Everyone in the world of traditional sports, like soccer, were seeing all these billionaires and wealth funds acquiring entities, and began wondering if they've got a right to do that. Is such a change good for the game? Is that good for the community? Is it good for the people of Newcastle that a Saudi Arabia entity has acquired their football team?
And the answer to that was ultimately, well, let's see what happens. You couldn’t honestly judge it fully one way or the other. A cash injection of that magnitude in the world of football has to be a good thing because it means the club can then buy bigger players and has access to greater resources.
Now that something similar is happening in the world of esports, it's quite interesting.
Savvy Games Group, due to its recent acquisitions of ESL Gaming, FaceIt, and DreamHack,it could be argued now has a stranglehold, a kind of monopoly, on dictating the future of esports. Together, those three entities have a platform with over 25 million video game players and they’re all incredibly well-known esports tournament organisers with very good relationships with publishers behind hit esports games from Counterstrike to League of Legends.
If they choose to focus on bringing esports into the Middle East instead of another region, what impact would that have on the industry long-term?
Has the move of esports to the Middle East always been a concern?
It's interesting how things have changed. Just three years ago, Blast said they were going to hold a Counterstrike tournament in Riyadh, Saudi Arabia. Specifically in Neom, one of the massive, new, and ambitious developments that the Saudis are building.
On paper, the idea sounded solid because you have a 25 million-person city backed by the massive wealth the Saudis have. However, the international Counterstrike community almost unanimously spoke out against moving premier esports competitions to Saudi Arabia due to the country’s reputation (at the time) for its human rights issues, oppressing women, and strict punishment for criminals.
Just a month after announcing the deal, Blast backed out because the backlash from the Counterstrike community was so loud.
That didn’t stop Saudi Arabia’s plans for esports though as in late 2021, the country established Savvy Games Group, financed via a Public Investment Fund (PIF), which acquired Blast’s rivals, ESL Gaming and FaceIt, and merged them into ESL FaceIt Group.
This isn’t Savvy’s finishing move though as the organisation, as of mid-2023, has been allocated another $37.8 billion to invest into Saudi Arabia’s esports and gaming scene. In addition to this, the above-mentioned PIF already owns stakes in some of the biggest players in the industry such as Nintendo, Capcom, Electronic Arts, Activision Blizzard, and Take-Two Interactive.
These are really big moves so it’s interesting that they haven’t really been touched from a commission authority’s perspective and are flying under the radar for a lot of people. It’s a sharp contrast to Microsoft’s proposed acquisition of ActivisionBlizzard which has rallied the attention of officials, gamers, and the media.
Do you think this is because Microsoft and Activision are more widely known companies so people instinctively feel more invested in what’s happening there?
I think it’s partially to do with that, yes. But also it comes down to Microsoft’s move potentially impacting which platforms Activision titles such as Call of Duty can be played on and the direct impact of that on Sony’s profitability. Even if Microsoft allows Call of Duty to remain on Sony’s PlayStation consoles for the next ten years or so, eventually all those players are going to have to jump over to Microsoft’s Xbox consoles or Windows PC. That’s a loss of over a million players and a revenue drop in the hundreds of millions.
Savvy Games Group’s acquisitions meanwhile don’t have a direct impact on IP sales. They’ve gained access to some cloud-based games but there’s little that’s immediately concerning at the surface level.
It’s kind of a more behind-the-curtain kind of thing.
Yeah. And maybe it’s not a bad thing. After all, this new focus on esports will provide fresh opportunities for the local people of Saudi Arabia. Right now the plan seems to be to make Saudi Arabia the hub of the games industry in line with its Vision 2030 strategy so it makes sense for the acquisitions and other moves to be ramping up.
Ben Akroyd is an award-winning event director with over 25 years of experience in the esports and gaming space. He’s organised events for major brands such as SEGA, Ubisoft, Red Bull Gaming, and numerous others in Mexico and all across North America and Europe. Ben prides himself on his industry knowledge and close relationships with numerous national venues from the SEC and Queen Elizabeth Olympic Park to ExCeL London and Twickenham Stadium.
Work with Ben when planning your next esports event by sending an email to hello@arenaconsultancy.com or calling +44 7899 962 423 today.