Having spent at least $1.5 billion on major international sporting events in order to bolster its reputation, Saudi Arabia has been accused by human rights groups of “sportswashing” which can be described as the investing or hosting of such events, in an effort to obscure poor human rights track record or improve a country’s image abroad.
According to last year’s report by human rights group, Grant Liberty, the Kingdom has invested in almost every high-profile sporting event, including a $650 million ten-year deal with the prestigious Formula One.
Although there are numerous historical examples of the practise across continents, the term “sportswashing” is credited to the Sport for Rights campaign of 2015, surrounding the European Games hosted in Baku, Azerbaijan that year.
However, the word grew in popularity around the time of the 2018 FIFA World Cup hosted by Russia, which Human Rights Watch (HRW) at the time felt undermined FIFA’s “Human Rights Policy” which was adopted the year before. The US-based HRW, has also extended this criticism towards this year’s upcoming World Cup in Qatar and the Beijing Winter Olympics which drew to a close this week, “both major human rights abusers”.
With regards to the Saudis, one of, if not the first, charges of sportswashing was the staging of the heavyweight boxing rematch in 2019 between former champion Anthony Joshua and Andy Ruiz Jr at the UNESCO World Heritage Site of Al-Turaif in Diriyah dubbed the “Clash on the Dunes”. The event, which was the first heavyweight title bout to take place in the region, drew sharp criticism, being in the aftermath of the 2018 murder of Saudi journalist Jamal Khashoggi, said to be at the behest of Crown Prince Mohammed bin Salman (MBS).
More recent accusations have since followed, such as the Saudi-backed Public Investment Fund’s (PIF) controversial takeover of British football club Newcastle United and the current bid to purchase Italian Serie A club Inter Milan for a reported $1 billion.
These gestures are clearly in line with MBS’s “Vision2030”, which aims to establish a more progressive image of the country to attract tourism and foreign investment, while also steering its economic dependence away from oil reserves into developing a more diversified economy. Yet, apart from hosting music and film festivals, the Saudis have started to tap into another, lucrative entertainment industry – gaming.
In fact gaming is now considered the most expensive and expansive entertainment industry in the world, with the sector estimated to be worth over $300 billion globally and growing, surpassing global music and box office revenues. While other sectors, such as film and sports were negatively affected by the pandemic, the gaming industry thrived. It is no surprise, therefore, that there are many people spending more time playing games than taking part in recreational sports and wellness, this has also contributed to the rise of e-sports, with viewership rivalling those of traditional sports, in some cases.
With this in mind, it is also unsurprising that Saudi Arabia has sought out investment opportunities in the gaming industry. In 2020, MBS’s official charity became the largest shareholder in the Japanese gaming company SNK Corporation with a 51 per cent stake, in a move that disappointed the company’s fan base.
It has not been completely smooth sailing, however, as earlier that year, MBS’s smart city project, NEOM, partnered up with developer Riot Games, with NEOM set to be the main sponsor of their League of Legends tournament, only for Riot to pull out facing a public backlash over the collaboration.
Saudi Arabia’s apparent “game-washing”, though has continued to expand with ever ambitious undertakings. Last year the Kingdom’s sovereign wealth fund, estimated to be worth around $500 billion, acquired sizeable shares in three major American games studios: Activision Blizzard, EA and Take-Two. The PIF may also benefit from a $1.1 billion boost to its holdings in Activision after Microsoft agreed earlier this year to buy the developer of popular mainstream titles such as Candy Crush and Call of Duty, the acquisition is currently pending.
صندوق الاستثمارات العامة السعودي يستحوذ على 5% من شركة ألعاب الفيديو اليابانية Capcom وشركة ألعاب الإنترنت الكورية Nexon مقابل مليار دولار 🎮! pic.twitter.com/m6Mk1jMMOY
— قريباً في السعودية (@SoonSaudi) February 13, 2022
This year has already been especially active for Saudi Arabia’s penetration in the gaming sector with the PIF-backed Savvy Gaming Group’s (SGG) takeover of two of the largest e-sports brands, for a combined value of $1.5 billion. Along with neighbouring Bahrain, which has also been developing its e-sports industry, the SGG aims to become a “pioneer in the development of the gaming and e-sports industry locally and internationally”.
Weeks later, this was followed up by the PIF purchasing a five per cent stake in Japanese gaming giant Capcom, which has been behind some of the most successful gaming franchises such as Street Fighter and Resident Evil. The fund also bought just over five per cent of a South Korean online games publisher, Nexon. The combined investment was worth $1 billion.
The most interesting development, however, has been the announcement by the Saudi Press Agency, two weeks ago, that the MBC Group and NEOM have signed an agreement to establish an AAA games studio in the Kingdom, making it the first of its kind in the Middle East.
This means that Saudi Arabia could potentially produce some of the most high-budget and high-profile games in the international market.
“We are now developing promising opportunities locally, regionally and globally by nurturing the Saudi game-development market,” Neom’s chief executive, Nadhmi Al-Nasr was quoted as saying.
We are kicking off a new era of creativity with @MBC_Group to establish the first AAA games development studio in the region – it will relocate to NEOM’s Media Hub in 2023 and produce high-production-value games for local, regional and international gamers. #NEOM pic.twitter.com/zJTDrkAq1B
— NEOM (@NEOM) February 10, 2022
With the Saudi games market estimated at $1 billion in 2021, it is the highest value among the Gulf States, according to market researcher, Niko Partners. It also has an annual growth rate of 22 per cent, among the highest in the world. There are also 23.5 million gaming enthusiasts or around 67 per cent of the Kingdom’s total population.
According to the latest research covering the games market in the Middle East North Africa (MENA) region, the combined game’s revenue of Saudi Arabia, the UAE and Egypt last year was $1.76 billion, expected to rise to $3.14 billion in 2025. The Kingdom was also described as “the gaming-powerhouse of Arabic-speaking nations”, balancing its young population size with high spending power.
While it is convenient to dismiss Saudi Arabia’s venture into the gaming industry as mere “games-washing”, akin to its involvement in sports and other forms of popular entertainment, there can be no denying that the move is a shrewd and rational one from a business and investment perspective alone, and will very likely bring substantial returns both in profit and prestige. This will be an integral part of Vision2030, by which time research suggests, the Saudi gaming and e-sports consumption is projected to reach $6.8 billion.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.