Key information
- Saudi Arabia’s sovereign wealth fund, PIF, plans to increase its investments in Japanese gaming companies.
- The fund currently holds an 8.6 percent stake in Nintendo and has made significant investments in other gaming companies like Tencent Holdings Ltd, Activision Blizzard Inc. and Kakao Entertainment Corp.
- PIF’s interest in the gaming industry is driven by national policy objectives, with Saudi Arabia wishing to establish itself as a major player in the global gaming industry and diversify its economy away from dependence with regard to oil revenues.
Nintendo’s stock price jumped after a senior official at Saudi Arabia’s sovereign wealth fund indicated it may be interested in increasing its investments in Japanese gaming companies. The news sent Nintendo shares up 3.9 percent, the biggest gain in more than a week and outperforming the broader market.
The Public Investment Fund (PIF), which manages around $760 billion (€692 billion) in assets, plans to allocate more capital to Nintendo and its industry peers. Prince Faisal bin Bandar, vice chairman of Savvy Games Group, a subsidiary of PIF, expressed his preference for such an initiative with the cooperation of these companies. This statement was reported by Kyodo News.
Interest in the gaming industry
Saudi Arabia wants to establish itself as a major player in the global gaming industry and diversify its economy by freeing itself from dependence on oil revenues. The country has committed $38 billion (€34 billion) to the venture, investing heavily in Japanese and Korean content providers. PIF positions itself as a long-term investor capable of withstanding fluctuations in the volatile video game market.
Currently, PIF owns an 8.6 percent stake in Nintendo, making it one of the company’s largest shareholders. In the past, the fund has made significant investments in other gaming and e-sports companies such as Tencent Holdings Ltd, Activision Blizzard Inc (now part of Microsoft Corp.) and Kakao Entertainment Corp.
Other investments in the Japanese games sector
Monday was marked by a rise in the share prices of other holdings in the Japanese gaming sector controlled by the PIF. Nexon Co. posted a gain of up to 3 percent, Capcom Co. rose 2 percent and Koei Tecmo Holdings Co. rose 2.8 percent.
Analysts believe Saudi Arabia’s interest in the gaming industry is driven by national policy goals, and expect the trend to influence other investments. The Kingdom has actively sought to attract gaming and technology companies to establish offices in the Middle East, with the aim of creating a content development hub by bringing artists and animators to the region.
Development of a theme park
The PIF has also contributed billions of dollars to tourism initiatives, including supporting the development of a theme park near Riyadh, featuring characters from the popular Japanese manga and animation franchise Dragon Ball .
Experts believe that an increase in PIF’s stake would not pose a major problem for Nintendo, as it fits with the Kyoto-based company’s goal of expanding its player base globally.
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