Saudi Arabia's Public Investment Fund now Nintendo's biggest foreign shareholder

The sovereign wealth fund continues to boost its portfolio in the lucrative global gaming sector

Nintendo is the creator of popular gaming franchises such as Super Mario, The Legend of Zelda, Donkey Kong and Pokemon. Reuters
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Saudi Arabia's Public Investment Fund has become Nintendo's biggest foreign shareholder, boosting its portfolio in the lucrative global gaming sector.

The kingdom's sovereign wealth fund raised its stake in the Japanese gaming company to 8.26 per cent, from 7.08 per cent, after a similar move on Wednesday, according to a regulatory filing on Friday.

The latest purchase was made for investment purposes, Bloomberg cited the filing as saying.

It is also the PIF's third such move this year after raised its stake in the Kyoto-based game maker to 6.07 per cent in early January.

Nintendo is the creator of the Super Mario franchise and its video-game consoles rival Microsoft's Xbox and Sony's PlayStation.

Saudi Arabia, the Arab world's largest economy, has increased its investment in the multibillion-dollar gaming industry over the past two years, with new technology providing both an opportunity to reach a wider audience and develop new titles to cater to consumer demand.

The kingdom's gaming industry 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 gross domestic product will have surged about 50 times by 2030, compared with 2022, the London-based market research company said.

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.

The global gaming sector has more than three billion gamers worldwide, according to gaming data provider Newzoo. The sector's revenue is projected to grow by about 15 per cent to $211.2 billion by 2025, from an estimated $184.4 billion in 2022, the latest estimates show.

In January 2022, the PIF launched Savvy Gaming Group (SGG), which aims to become the leading gaming and e-sports group locally and internationally, in line with its 2021-2025 strategy to drive innovation in strategic sectors such as entertainment, leisure and sports.

Since then, the fund has been aggressively investing in the gaming market.

The PIF first bought into Nintendo in May last year, when it acquired 6.5 million shares, a 5.01 per cent stake. That made the fund the fifth-largest shareholder in Nintendo at the time.

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In June, the PIF, through SGG, acquired about 99.9 million shares, an 8.1 per cent stake worth $1 billion, in Swedish gaming business Embracer Group.

In September, SGG launched its new investment strategy, allocating 142 billion Saudi riyals ($38 billion) across four programmes as the kingdom seeks to become one of the world's major gaming centres.

The PIF also has stakes in Activision Blizzard, the maker of the Call of Duty series that Microsoft plans to acquire for $69 billion, Street Fighter maker Capcom, Need for Speed developer Electronic Arts and Ninja Gaiden creator Koei Tecmo.

It also owns shares in New York-based Take-Two Interactive Software and Japan's Nexon.

At the Leap technology exhibition in Riyadh earlier this month, Saudi Arabia's gaming industry received new funding worth $488 million to boost talent and development.

The funding, which is for both the gaming and e-sports sectors, was provided by the Saudi Esports Federation, the kingdom's National Development Fund and the Social Development Bank.

Updated: February 17, 2023, 11:58 AM