Saudi Arabia's Savvy Games Group, owned by the country's sovereign wealth fund, the Public Investment Fund, has agreed to buy California-headquartered game developer and publisher Scopely for $4.9 billion.
The acquisition, which is subject to regulatory approval, strengthens Savvy’s ability to “deliver new and exciting products for the global gaming community”, the company said in a statement.
“Scopely is one of the fastest-growing games companies today, and we have long admired their ability to build loyal, engaged player communities,” said Brian Ward, chief executive of Savvy.
“Our mission is to invest in, and grow, the global games community by inviting the best minds to join us … Scopely … will continue to revolutionise the future of games for years to come.”
In September last year, Savvy unveiled its new investment strategy, as the kingdom aims to become one of the world's major gaming hubs.
Launched in January last year, the company plans to invest 142 billion Saudi riyals ($38 billion) across four programmes, each with specific objectives.
Under the strategy, 250 game companies will be established in the kingdom, which will create 39,000 jobs and raise the sector’s gross domestic product contribution to 50 billion riyals by 2030.
The gaming industry in Saudi Arabia, the Arab world's biggest economy, is poised to grow 250 per cent by 2030, with e-sports leading the growth, a recent study from YouGov found.
The growth would mean that its contribution to Saudi Arabia's GDP will have surged about 50 times by 2030 compared with 2022, the London-based market research company said.
In February, Saudi Arabia’s gaming industry received new funding worth $488 million. The financing was provided by the Saudi Esports Federation, the National Development Fund and the Social Development Bank.
Gaming consumption in the kingdom is projected to hit $6.8 billion by 2030, growing at a compound annual rate of 22 per cent, the Boston Consulting Group said in a recent report.
This transformational partnership is a great validation of the incredible talent of our entire Scopely team and will further accelerate our efforts to drive the games industry forward
Walter Driver,
co-chief executive of Scopely
The recent acquisition brings the US company’s global footprint, development capabilities, publishing infrastructure and technology to the Savvy ecosystem.
Some of the successful games developed and published by Scopely include Star TrekTM Fleet Command, Stumble Guys, Scrabble GO, and Yahtzee With Buddies.
“We look forward to further accelerating the company’s ambitions and working together with their talented team … to create innovative and exciting new products for the gaming community across the world,” Mr Ward said.
Founded in 2011, Scopely will work as an autonomous operating company under the Savvy umbrella. It will benefit from Savvy’s financial backing to deliver on its strategy to grow, the statement said.
This acquisition will also build on Scopely’s cross-platform approach to extend its live services expertise to new segments such as personal computers, console and other genres of gameplay, it added.
“This transformational partnership is a great validation of the incredible talent of our entire Scopely team and will further accelerate our efforts to drive the games industry forward,” Scopely’s co-chief executive Walter Driver said.
JP Morgan Chase acted as lead financial adviser to Savvy on the transaction.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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A little about CVRL
Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
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Ibrahim's play list
Completed an electrical diploma at the Adnoc Technical Institute
Works as a public relations officer with Adnoc
Apart from the piano, he plays the accordion, oud and guitar
His favourite composer is Johann Sebastian Bach
Also enjoys listening to Mozart
Likes all genres of music including Arabic music and jazz
Enjoys rock groups Scorpions and Metallica
Other musicians he likes are Syrian-American pianist Malek Jandali and Lebanese oud player Rabih Abou Khalil
The Vile
Starring: Bdoor Mohammad, Jasem Alkharraz, Iman Tarik, Sarah Taibah
Director: Majid Al Ansari
Rating: 4/5
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