Saudi Arabia targets esports as it buys stake in Nintendo
SAUDI Arabia has taken a 5pc stake in Nintendo, becoming one of the Japanese video games giant’s largest shareholders as the Gulf state seeks to create a homegrown industry.
The country’s sovereign wealth fund has acquired 6.5m Nintendo shares, a stake worth 381bn yen (£2.4bn), according to Japanese filings.
In recent months the fund has built up similar holdings in Capcom, the company behind the Street Fighter and Resident Evil series, and Nexon, which publishes a string of online games.
Japanese video games companies have so far been largely shielded from a wave of industry consolidation as Microsoft and Sony step up the console wars.
Microsoft agreed to pay $69bn (£56bn) for Activision Blizzard, the maker of Call of Duty, in January, while Sony responded by buying Bungie, the developer of Halo.
Nintendo, which is best known for Mario, Zelda and Animal Crossing, has enjoyed unprecedented success in recent years with the launch of its Switch console and a pandemicinduced boom in gaming.
However, it recently projected lacklustre sales of the five-year-old console as it struggles to deal with a global chip shortage, and said it expected full-year profits to fall by 29pc.
The Saudi Public Investment Fund (PIF) has outlined plans for the country to become a hub for competitive gaming known as esports. It created its own video games company in January and purchased German esports company ESL Group for $1.1bn (£890m). The PIF plans to finance a games studio in Neom, the proposed city in the Saudi desert.
The Japanese yen has slumped against the dollar in recent months, making overseas investments in its companies relatively cheaper. Meanwhile, the soaring price of oil has given Saudi Arabia more funds as it ultimately seeks to diversify its economy away from fossil fuels.
Saudi ambitions in esports have led to claims that the investments are a new means of “sportswashing” – seeking cultural influence through sporting deals to distract from alleged human rights abuses.