Saudi Arabia's Plan to Dominate Esports in 2024

Summary

The script delves into the paradoxical landscape of esports in 2024, where Saudi Arabia's massive investments contrast with the withdrawal of traditional investors. It questions whether this influx of capital is genuinely fostering the industry or strategically undermining its independence. The narrative explores the implications of such investments on the esports ecosystem, including the potential for a monopoly, geopolitical influences, and the ethical dilemmas faced by organizations and players.

Takeaways

• 🌐 Esports in 2024 is experiencing a significant shift with big investors withdrawing while Saudi Arabia is investing heavily, raising questions about the industry's independence and potential monopoly.
• 🏛 Saudi Arabia's investment in esports is part of a strategic move to diversify its economy under Vision 2030, aiming to reduce dependence on oil and boost its gaming industry.
• 💰 The esports market is massive, with a global viewership of 540 million and a market size of Two Point Three Billion Dollars, rivaling traditional sports in viewership and revenue.
• 📉 Despite the growth, there are financial strains within the esports industry, with key investors expecting returns similar to traditional sports, which has led to the downfall of major leagues and teams.
• 👑 Mohammed bin Salman (MBS), the driving force behind Saudi Arabia's esports push, sees it as a crucial industry for the nation's economic growth and modernization.
• 🎮 The MENA Gaming Market is booming, with a projected growth from $6B to $10B by 2029, and Saudi Arabia's gaming market alone is expected to reach $3B by 2030.
• 💡 Saudi Arabia's investment in esports comes from the Public Investment Fund (PIF), which is the financial powerhouse behind major Saudi initiatives and has made significant investments in gaming companies.
• 🌐 The Savvy Games Group, a subsidiary of PIF, has ambitious plans to create 250 gaming companies, 50k jobs, and contribute $13B to the GDP, indicating a long-term commitment to the gaming industry.
• 🏆 The Gamers8 festival, organized by the Saudi Esports Federation, had the largest prize pool in esports history, showcasing Saudi Arabia's financial capacity to influence the industry.
• 🏢 The development of Qiddiya City, the world's first gaming and esports district, is part of Saudi Arabia's vision to become a global gaming hub, with facilities to host esports clubs and game companies.
• 🤝 While there are concerns about 'sportswashing' and the influence of Saudi Arabia's investments on the esports industry, there is also the potential for growth, increased global recognition, and financial support for esports.

Q & A

What is the current size of the esports market in terms of revenue and viewership?

The esports market is valued at Two Point Three Billion Dollars with 540 million global viewers, making it a significant player in the entertainment industry, comparable to traditional sports.

Why are some major investors pulling out of the esports industry?

Major investors are pulling out due to financial strain and lack of return on investment (ROI). They had unrealistic expectations of massive returns similar to traditional sports but were not met, especially considering the operational costs.

How has the withdrawal of sponsors like BMW and HP affected esports teams?

The withdrawal of sponsors has led to financial difficulties for esports teams. For instance, 100 Thieves, the second-most-valuable esports team, had to let go of 20% of its workforce.

What is Saudi Arabia's strategic move in the esports industry?

Saudi Arabia is investing heavily in esports as part of its Vision 2030 plan to diversify the economy and reduce dependence on oil. It aims to become the largest gaming hub in the world.

Who is Mohammed bin Salman, and what is his role in Saudi Arabia's esports investments?

Mohammed bin Salman, known as MBS, is the person in charge of Saudi Arabia's esports investments. He oversees virtually everything in the country, including modern reforms and the push into the esports industry.

What is the MENA Gaming Market's projected growth by 2029?

The MENA Gaming Market is projected to grow from $6 billion to $10 billion by 2029, indicating a significant expansion in the gaming sector.

What is the significance of the Gamers8 festival in the context of Saudi Arabia's esports strategy?

The Gamers8 festival is a key event organized by the Saudi Esports Federation, featuring the largest prize pool in esports history, which showcases Saudi Arabia's commitment to becoming a major player in the esports industry.

How is the Saudi sovereign wealth fund, PIF, involved in the gaming industry?

PIF, the 6th largest sovereign wealth fund, is the financial powerhouse behind major Saudi initiatives, including significant investments in gaming companies like Nintendo, Activision Blizzard, Capcom, Nexon, EA, Take-Two, and ESL & FACEIT.

What are the goals of the Savvy Games Group, a subsidiary of PIF?

The Savvy Games Group aims to create 250 gaming companies and 50,000 jobs with a GDP contribution of $13 billion. They have already made significant moves, such as acquiring Scopely, the makers of Monopoly GO!

What is Qiddiya City, and how does it fit into Saudi Arabia's esports ambitions?

Qiddiya City is envisioned as the world's first gaming and esports district, with 500,000 square meters dedicated to housing 25 esports clubs and 30 game companies, including the largest esports arena.

How does the script suggest the esports industry might be influenced by Saudi Arabia's investments?

The script suggests that Saudi Arabia's investments could lead to esports content and rules aligning more with Saudi political views, favoring Saudi-backed teams and games, and potentially affecting the industry's independence and authenticity.

What ethical concerns are raised by the script regarding Saudi Arabia's involvement in esports?

The script raises concerns about 'sportswashing' and the potential for esports to be used as a distraction from human rights issues and political controversies within Saudi Arabia.

How does the script address the geopolitical complexities affecting esports players?

The script provides examples, such as Israeli players requiring constant security at the Gamers8 tournament due to tense relations with Saudi Arabia, highlighting the real cost and impact of geopolitical issues on esports players.

What stance has Team Liquid taken regarding their participation in Saudi Arabia's Gamers8 event?

Team Liquid participated in the Gamers8 CSGO event but expressed concerns about Saudi Arabia's laws and policies not aligning with the esports community's values. Their CEO produced a video explaining their decision.

What is the script's final message regarding the role of esports in culture and politics?

The script concludes that while esports brings joy and unity, it is not politically neutral. It encourages ongoing conversations about the bigger issues at play and self-reflection on the part of Western countries that critique Saudi Arabia's actions.

Outlines

00:00

💰 Esports Investment and Saudi Arabia's Role

The paragraph discusses the significant yet controversial investment in esports by Saudi Arabia. It highlights the country's massive financial injection into the esports industry, which is valued at Two Point Three Billion Dollars with a global viewership of 540 million. Despite the potential for growth, there is concern about the industry's independence due to Saudi Arabia's strategic investment, which may lead to a monopoly. The paragraph also touches on the financial struggles of major esports leagues and teams, contrasting them with Saudi Arabia's wealth and ambitious plans to become the world's largest gaming hub, aligning with their Vision 2030 to diversify the economy. The role of Mohammed bin Salman (MBS) as a driving force behind these reforms and his interest in esports is also mentioned.

05:04

🏛 The Impact of Saudi Arabia's Esports Investments

This paragraph delves into the geopolitical and ethical implications of Saudi Arabia's investments in esports. It raises questions about 'sportswashing' and the potential for the state to use esports to distract from internal issues and buy compliance. The paragraph contrasts Western countries' subtler forms of 'washing' with Saudi Arabia's direct state involvement in esports. It provides examples of how Saudi investments have affected the gaming industry, including the impact on Embracer Group and Riot Games, and discusses the changing attitudes of esports organizations towards doing business with Saudi Arabia. The paragraph also mentions the Gamers8 festival and the Saudi Esports Federation's initiatives, including support for female gamers, and the potential for esports content and rules to align with Saudi political views.

10:08

🤔 Ethical Dilemmas and the Future of Esports

The final paragraph explores the ethical dilemmas faced by the esports community in light of Saudi Arabia's investments. It presents a range of reactions from skepticism to calls for boycotts, reflecting the struggle to balance financial interests with ethical concerns. The paragraph discusses specific instances where geopolitical complexities have affected esports players and organizations, such as the case of Israeli players at Gamers8 and the ethical stance of Team Liquid. It also considers the potential benefits of Saudi investments for esports, such as increased legitimacy and financial support for the industry. The paragraph concludes by emphasizing the importance of ongoing conversations about the political and cultural implications of esports and the need for self-reflection among all stakeholders in the industry.

Keywords

💡Esports

Esports refers to the world of competitive video gaming, where professional players participate in organized, multiplayer video game competitions. It is central to the video's theme, as it discusses the growth and commercial aspects of esports, including its comparison to traditional sports and the investments pouring into the industry from countries like Saudi Arabia.

💡Saudi Arabia

Saudi Arabia is a country in Western Asia that has become a significant player in the esports industry due to its large-scale investments. The video discusses how Saudi Arabia's involvement is part of a strategic move to diversify its economy and establish itself as a major gaming hub, which aligns with its Vision 2030 plan.

💡Investment

Investment, in the context of the video, refers to the financial backing provided by various entities, including Saudi Arabia, to esports teams, leagues, and events. The script highlights the shift in investment trends, with traditional investors stepping out due to unrealistic expectations and Saudi Arabia stepping in with billions of dollars.

💡Monopoly

A monopoly in this video refers to the potential control or dominance of the esports industry by a single entity or country, specifically Saudi Arabia. The script raises concerns about whether Saudi investments could lead to an esports monopoly, affecting the industry's independence and diversity.

💡Viewership

Viewership denotes the number of people watching esports events, which the video states is growing and rivaling traditional sports. It is a key metric for the esports industry's success and is tied to the potential for commercial exploitation and global recognition.

💡ROI (Return on Investment)

ROI is a financial term that refers to the profit or loss made on an investment relative to the amount invested. The script mentions that some investors expected high returns from esports but were disappointed, leading to a decrease in investments as they compared the industry to traditional sports with packed stadiums and merchandise sales.

💡Sponsorship

Sponsorship is the support provided by a company to an event, organization, or individual in exchange for some form of advertising or promotion. The video discusses how companies like BMW and HP pulled their sponsorships from esports due to the lack of return on investment.

💡Vision 2030

Vision 2030 is a government plan by Saudi Arabia aimed at diversifying the country's economy and reducing its dependence on oil. The video explains how investments in esports are part of this vision, with the goal of transforming Saudi Arabia into a major player in the global gaming industry.

💡Mohammed bin Salman (MBS)

Mohammed bin Salman, often referred to as MBS, is the Crown Prince of Saudi Arabia and the person in charge of the country's esports investments. The video mentions him as a driving force behind the country's modern reforms and strategic moves into the esports industry.

💡Gamers8 Festival

The Gamers8 Festival is an esports event organized by the Saudi Esports Federation, highlighted in the video for its record-breaking prize pool and as an example of Saudi Arabia's efforts to establish itself in the esports scene. It is part of the country's broader strategy to attract global attention to its gaming initiatives.

💡Esportswashing

Esportswashing is a term coined in the video to describe the potential use of esports investments to distract from or improve the image of a country with controversial policies or practices. It is compared to other forms of 'washing' such as sportswashing, greenwashing, and whitewashing, and is a point of contention in the discussion about Saudi Arabia's involvement in esports.

Highlights

Esports in 2024 sees Saudi Arabia investing billions, raising questions about the industry's independence.

The esports market is valued at Two Point Three Billion Dollars with 540 million global viewers.

Top pro gamers are earning millions, backed by significant investments from venture capital to state funds.

Despite growth, key investors are leaving esports due to unrealistic comparisons and financial strain.

Saudi Arabia's investment aligns with Vision 2030, aiming to diversify the economy and reduce oil dependence.

Mohammed bin Salman sees esports as crucial for a 25% profit from investments, part of modern reforms in Saudi Arabia.

The MENA Gaming Market is projected to grow from $6B to $10B by 2029, with Saudi Arabia leading the charge.

Gamers8 festival had the largest esports prize pool in history at 45M, surpassing previous records.

Saudi Esports Federation supports female gamers and organizes events like the all-women CS:GO tournament.

PIF, Saudi Arabia’s sovereign wealth fund, is a major investor in the gaming industry, including major companies like Nintendo and Activision Blizzard.

Savvy Games Group, a PIF subsidiary, plans to create 250 gaming companies and contribute $13B to the GDP.

Qiddiya City is set to become the world’s first gaming and esports district, housing esports clubs and game companies.

Concerns arise about 'Sportswashing' as Saudi Arabia's investments in esports grow, potentially influencing content and rules.

Esports organizations and content creators are increasingly engaging with Saudi Arabia, despite ethical dilemmas.

Saudi Arabia's involvement in esports could boost the industry with increased prize pools and global attention.

The esports community must balance growth with maintaining the integrity of the industry amidst political influences.

Team Liquid's participation in Gamers8 and their CEO's video statement reflects the complexity of ethical and financial interests.

Moist Esports' refusal to participate in Gamers8 due to Saudi Arabia's stance on LGBTQ+ rights highlights the industry's ethical challenges.

Geopolitical complexities, such as Israeli players requiring security at Gamers8, underscore the real costs of involvement in esports.

Transcripts

Esports in 2024 is a curious case indeed: As big investors are stepping out, Saudi Arabia

is stepping in, pouring billions into this thriving yet fragmented industry. But is Saudi

Arabia genuinely boosting esports, or is it a strategic play at the cost of the industry’s

independence? With concerns about an esports monopoly, I’ll unpack Saudi Arabia's real

impact. What's in store for esports – global recognition or commercial exploitation?

Two Point Three Billion Dollars! That’s the massive size of the esports market today.

With 540 million global viewers, esports is huge in entertainment, rivaling traditional

sports. Viewership alone will grow and skyrocket over the upcoming years, with peak events

drawing millions of viewers. Top pro gamers are raking in millions and have become household

names, backed by serious money from VC to state funds.

But it’s not all smooth sailing what did you think. Despite the growth, key investors

are bailing left and right. The money they expected in return was just not rolling in.

They were making unrealistic comparisons to traditional sports, betting on massive returns

from packed stadiums and merchandise.

But comparing the Overwatch League to the NFL? In hindsight, that was a stretch. Especially

when it came to operational costs.

But their financial strain grew and caused entire

downfalls of major leagues like the Overwatch League, CLG, and FaZe Clan. Even 100 Thieves,

the second-most-valuable esports team in the world, had to let go 20% of

its workforce.

So with little ROI, sponsors like BMW and HP didn't stick around and put their sponsorships

elsewhere.

But what are BMW and HP  compared to the heavyweight 

champion of wealth – Saudi Arabia. A country

that went from this to this thanks to its large oil reserves. Home to the world's largest

airport, largest desert, and tallest fountain, Saudi Arabia is now pouring resources into

esports, aiming to become of course the largest gaming hub in the world. A strategic move

that aligns with Vision 2030 - a government plan to diversify the economy and reduce its

dependence on oil.

Because when the oil price dropped in 2014, it became clear that oil dependency is a risky

business. And the person in charge? Mohammed bin Salman, known as MBS, or, Mr. Everything,

as he oversees virtually everything. Under his rule, there’ve been some modern reforms:

Women are now allowed to drive, travel abroad alone, and cinemas reopened after 35 years.

Funfact: MBS is also a massive gamer. For MBS, esports is one of the most important

industries on the planet, with an expected 25% profit from its investments.

In fact, the MENA Gaming Market is booming, with $6B to a projected $10B by 2029. Saudi

Arabia’s gaming market alone stands at $1B with a projected $3B by 2030. With 23M gamers,

it’s the largest market by games revenue.

Another fun fact: 70% of Saudis are under 35. A perfect audience for esports events.

Such as the Gamers8 festival, organized by the Saudi Esports Federation. Last year, it

had a prize pool of 45M, the largest one in esports history, surpassing the previous one.

The SEF is also supporting female gamers with initiatives like the all-women CS:GO tournament

at Gamers Without Borders.

The money invested into esports comes from Saudi Arabia’s sovereign wealth fund The

PIF. It’s the 6th largest of its kind and the financial powerhouse behind every major

Saudi initiative. Just look at its gaming portfolio: The PIF invested $3B in Nintendo,

$3.3B in Activision Billzard, $1B in Capcom and Nexon, $3B in EA, $1.3B in Take-Two, $1.5B

in ESL & FACEIT - the list goes on but then my editor would be animating until forever.

And then there is the Savvy Games Group, a subsidiary of the PIF. The Savvy Games Group

plans to create 250 gaming companies and 50k jobs with a GDP contribution of $13B. They’ve

already made a splash by acquiring Scopely, the makers of the hit game Monopoly GO! A

game that made over $1 billion in revenue since its launch in April 2023. Savvy CEO

Mr. Ward puts it boldly. And the stage for this grand gaming ecosystem? Qiddiya City,

the world’s first gaming and esports district. With its 500k square meters, it’ll be home

to 25 esports clubs and 30 game companies. And of course, besides the largest fountain,

airport, desert and oil reserve, it’ll have the largest esports arena, too.

You see, MBS is very serious about this. But with such hefty investements, he’s often

asked: What do you say to people who charge that that's part of Sportswashing? Well if

it's sportswashing and it increased my GDP by 1%, then we'll continue doing sportwashing.

An honest response. His focus is obivously on growth, not on critics’ perceptions.

It’s a pretty pragmatic stance. And, you know, Sportswashing, Greenwashing, Whitewashing,

Esportswashing - you name it - it’s a tactic as old as time, known as “Bread and Circuses”,

to distract from issues with food & entertainment. It’s the oldest playbook in the world. And

one that we in the West are no strangers to either. Western countries use events for similar

purposes; our forms of washing might be more subtle, but they exist. The main difference

between ‘them’ and ‘us’ is that Saudi Arabian investments in esports are directly

orchestrated by the state, not by some private corporate entity. It's not just funding; it’s

a state action which can  buy silence and complicity 

over very severe internal issues.

Human, Women and Migrant workers rights. Death penalties based on social media activities,

murder of a journalist, mass starvation in Yemen, infamous anti-corruption purges, and

the list goes on. Saudi Arabia’s approach to power and control is obvious. And one might

wonder how this paves the way for an esports monopoly. We’ve seen this play out before:

Take the PGA vs LIV Golf situation. PIF funds LIV, a competitor to the PGA, and lures top

golfers away from there with unprecedented cash prizes, ultimately forcing a PGA-LIV

merger. Or Newcastle United, 80% owned by the PIF. Their third kit started to mirror

Saudi national colors, fans wore Saudi-inspired headdresses, and the club entered a partnership

with noon.com — a major Amazon rival in Saudi Arabia. All to further blend the club's

identity with Saudi interests. Or let’s take a look at Vice Media. After the journalist's

murder, Vice pulled back from Saudi Arabia but later entered a million-dollar-deal with

them, as it was facing bankruptcy. What followed was Vice pulling down a documentary from Youtube

that was crititical of Saudi Arabia.

What about Saudi’s impact in the gaming world? Well, let’s look at Embracer Group.

After a $2 billion deal with Savvy Games Group unexplicably collapsed,the gigantic video

game conglomerate had to dramatically restructure after Embracer had to close studios, cancel

projects, cut jobs across the board, including "Saints Row" studio Volition.

In 2020, Riot Games dropped Saudi’s NEOM project as a sponsor after a backlash over

LGBTQ rights. But now, it seems Riot’s stance is changing. Riot confirmed that it is in

talks with Saudi’s Esports World Cup to allow two teams from each of its leagues to

participate.

It’s pretty clear that the attitude about doing business with Saudi Arabia is changing

among esports organizations. Even content creators, who would have avoided promoting

projects like Esports World Cup, Neom, and Qiddiya are promoting these projects without

fear of backlash. In fact, many prominent names from the gaming world attended the New

Global Sport Conference in Riyadh last year. Savvy Games Group, Sony, Sega, Take-Two, Ubisoft,

and others all showed up.

Saudi money, then, is already changing the gaming industry just as it is changing sports

and culture. If taken to an extreme, we could see game content and esports rules starting

to align more with Saudi political views, and tournaments favoring Saudi-backed teams

and games. We're already seeing signs of this influence. Take the Gamers8 tournament for

CSGO. Team Falcons, a Saudi-owned team, made an appearance despite not usually qualifying

for S-Tier tournaments.

And while the Gamers8 bread and circus was going on, Saudi border guards were systematically

killing hundreds of Ethiopian asylum seekers. Those involved in these killings are the same

ones organizing the events.

There is much silence around this. But one of the few to comment on this issue was Team

Liquid. On X, their post reads that “Saudi Arabia’s laws and policies do not line up

with our values of the esports community”. Team Liquid still participated in the Gamers8

CSGO event. Their CEO produced a 4 min video explaining why. It’s tricky indeed. The

responses under the video range from skepticism to calls for boycotts. Reactions that highlight

the struggle to reconcile ethical dilemma and financial interest. But then there are

some that are pretty clear on where they stand. 

In 2022, Moist Esports, founded  by gamer ‘MoistCritikal’, [refused

an invite to Gamers8’s Rocket League tournament saying “I will not be associating with a

country that does not recognize LGBTQ+ people as human beings.”

Another telling example of the geopolitical complexities happened at Gamers8 when Israeli

players FlameZ, Spinx, and NertZ required constant security due to the tense relations

between Israel and Saudi Arabia. Spinx tweeted after winning the Gamers8 prize, thanking

the security guys.

When such geopolitics affect esport players, you've got to ask: what's the real cost of

this involvement? Time will tell. On the flipside, I can see how these big investments could

actually give esports a boost. As they're pumping in cash for prize pools and big events,

it might bring in more eyes on esports altogether, pull in new fans and offer more chances for

players all over the world. For the industry's long-term health, this cash injection might

be just what's needed, especially when times are tough. And let's not forget legitimacy.

Having big players like Saudi Arabia involved could make esports seem more legit, more like

traditional sports. But  it's a fine line - Balancing 

growth and keeping true to what esports is

all about. Players and orgs tend to forget that they are the ones being used. Look at

Manchester City and Paris St Germain. Funded by Abu Dhabi and Qatar, the more they win,

the more people forget about what's really happening behind those borders. Does it mean

we should all feel bad now when enjoying esports? Of course not. No one wants to kill the joy

that esports brings to the world. It’s an escape and it unites us. But games and esports

aren’t just games and esports. They’re not and never will be politically neutral,

as much as we might wish they were. And that’s why we've got to keep talking about it. Keep

the conversations going. Enjoy the sport but also be aware of the bigger issues at play.

And while we do that, we’ve gotta look at ourselves. As we critique Saudi Arabia, we

too have to reflect on our own actions and biases. Because in the world of esports, where

culture and politics mix, keeping things fair is everyone's job, not just the job of one

singular country.