Saudi Arabia, under the de-facto rule of Crown Prince Mohammed bin Salman, is trying to diversify its portfolio. It’s spent most of its time in oil, what with being the largest producer of oil on Earth, but there are signs that oil might be on a permanent downswing. Shell recently reported that it had reached peak oil and that it planned to produce less oil in the future, and the price of oil has been stubbornly low as demand for crude continuously shrinks in the face of green energy alternatives.
Seeing the writing on the wall, the Saudia Arabia Public Investment Fund has wisely decided to put some of its many billions of dollars into a rising industry--namely, video games. The pandemic has been poor to oil, but fabulously beneficial to video games, with most companies reporting record profits and sales. And Saudi Arabia wants a piece of the action.
According to Business Insider, the Saudi Arabia Public Investment fund purchased 7.4 million shares of EA for $1.06 billion along with 14 million shares of Activision Blizzard for $1.4 billion. That's a 2.6% stake and 2% stake in EA and Activision Blizzard, respectively.
The fund also increased its stake in Take-Two Interactive to 3.5%, or roughly $12.8 billion.
One of the largest wealth funds in the world, the Saudi Arabia Public Investment Fund currently manages around $400 billion in assets but plans to expand to $1.07 trillion by the end of 2025. The rapid expansion of investments is being overseen by Crown Prince Mohammed bin Salman.
And it doesn't look like Prince bin Salman is looking to get into games just as an investment vehicle. Last year, bin Salman purchased a controlling stake in SNK, the Japanese publisher famous for the King of Fighters games and the Neo Geo line of consoles. So far this hasn’t resulted in any huge swings for the company, but it’s only been a few months.
Source: Business Insider