Following a series of video game company acquisitions made by Saudi Arabia's Public Investment Fund recently, the state-run wealth fund has now spent $1.05 billion to purchase an 8.1% stake in Embracer Group.
That stake will make the PIF's Savvy Gaming Group the second-largest shareholder in Embracer, according to Bloomberg. This follows recent investments by the PIF and its subsidiaries in gaming companies such as Capcom (5%), SNK (96%), and Nintendo (5%).
Embracer itself is one of Europe's largest and fastest-growing video game companies. The Swedish firm was itself in the news at the start of May after acquiring several big-name IPs and associated studios from Square Enix, including Crystal Dynamics and the Tomb Raider series, plus Square Enix Montreal and Eidos-Montreal along with Deus Ex, Thief, Legacy of Kain and others. Embracer also picked up Borderlands developer Gearbox back in February 2021 and the publisher owns a host of other groups including THQ Nordic, Koch Media, Saber Interactive, DECA Games, and Dark Horse.
Lars Wingefors, Embracer Group's founder and group CEO. had this to say of the stock acquisition in a notice shared on the company's website:
"Our relationship with Savvy Gaming Group will enable us to set up a regional hub in Saudi Arabia, from which we will be able to make investments across the MENA region, either organically, via partnerships, joint ventures, or via acquisitions of companies led by strong entrepreneurs.”
The PIF's investments have drawn scrutiny and criticism from other nations in recent years due to Saudi Arabia's human rights record, which is tracked and reported on by organisations such as Amnesty.
As this is a sensitive topic, please keep our Community Rules in mind when discussing it below.
[source bloomberg.com, via videogameschronicle.com]
Comments 36
So the group that bought Tomb Raider, Deus Ex, etc. from Square Enix.... has now also had a stake put into them by a Saudi Arabian investment fund.... similar to what happened with SNK about 2-3 years ago..... what.
@Fizza I don't think 8% share equates to 'bought out', does it?
@Fizza Your image really fits well. In the end, all you gotta do is check who's holding the real strings
Frankly I'm surprised that this group is so invested in the video game industry, but as someone pointed out earlier it's a good market to invest money into, especially with a world that is starting to lean less heavily on oil.
@gcunit Yeah you're right, I'll just change that there.
Consumers really should ignore this type of thing, if you look into pretty much any public company they will have a similar stain on them.
At least is not Tencent this time
Saudi arabia has to do something with the oil and blood money they’ve earned. That oil money will stop in a few decades and the country has not much else to offer at all.
Interesting to see if this means more video games from the middle east is going to be a thing.
The young adults from the Arabian Peninsula are now quite well informed and educated, and they might not all want jobs in business, diplomacy, or engineering, even if this is what the governments there are pushing.
Remember kids, stocks by themselves do not let you control the day to day runnings of a business nor do they give you access to those profits directly, even when you have controlling stake. Stocks are an investor’s game. Business is business. There’s a difference.
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Impressed NL left the comments open.👍
Interesting timing, heard a lot yesterday about PIF with their LIV golf series havIng it's inaugural tournament this weekend.
A little back story on PIF for anyone hearing of it for the first time, though if you follow football in the UK you probably already know.
https://www.golfdigest.com/story/saudi-golf-league-2022-primer
Gotta invest all that money in something.
Oil will still be a thing for a good while but as we rely less and less on it that'll start impacting their bottom line.
They've invested heavily in batteries/evs as well iirc.
Soon the Saudi prince is going to be the genie of the gaming industry if he kept on investing in these dying companies. Soon these companies will stop making such IPs like Gex, Sleeping Dogs, and Tomb Raider and we will have to wish for them.
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Okay now take that billion dollars and make 10 deus ex games Embracer group.
@nessisonett It's almost as if the abuse of human beings is a profitable enterprise.
Soooooo............this is Prince of Persia related, right?
@Richnj You’re telling me. I grew up in a city with streets named after slave traders.
I still don't get why the Saudi government keeps trying to invest so much into these game companies. Feels like they should, ya know, work on making their country better
@Fighting_Game_Loser Oil won't be around forever, so investing in big companies could do the trick for their economy in the future I guess.
@Friendly well that’s the main objective that MBS wants to do. He wants to make Saudi Arabia less dependent on oil exports
@PtM MBS is a gamer apparently. Played a lot DOTA, Team Fortress and Call Of Duty, I think
@YoshiF2 yeah. Tencent would be worse imo
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Wish they’d just stick to investing in swords and hacksaws.
Don’t want them having any influence on my life.
@jikflet yes that's very disappointing 😞
@fenlix I guess that's true. I just hope that if they're doing this that they're going to let the companies they buy out still have free reign and that the money the Saudi government makes goes towards actually improving the livelihood of living for all living in those regions
Whoa comments open on an article about a less than globally liked country, brave of you.
As long as they don't get a say in how much females are allowed to wear in video games, I couldn't care less though.
So Saudi Arabia is extremely rich because of oil but it's a shrinking business so perhaps that's why they're slowly buying the video games universe? I don't like this but what can I do.
Governments shouldn't be allowed to do this
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@Banjo- Not just video games FYI:
https://www.theweek.co.uk/news/sport/football/956759/what-is-sportswashing
Whoa wait... Saudi Arabia owns 96% of SNK!? Unacceptable. How could Japan let that happen?
@Grail_Quest Reading that fact brought back memories of Metal Slug's desert stages, with the sword-slinging Arab(?) guys.
@NEStalgia If PIF can do this to a group as homogenous as old white guy golf players imagine what they'll do to the gaming community. 😂
https://www.cnbc.com/2022/06/09/pga-suspends-phil-mickelson-others-for-involvement-in-saudi-backed-liv-event.html
@gcunit Why don't you have more likes than his comment. 8% is not 'bought out'.
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