The Kingdom of Saudi Arabia is investing billions in the video game industry
The Kingdom of Saudi Arabia is investing billions in the video game industry

Saudi Arabia wants to invest in an industry that Crown Prince Mohammed bin Salman has always favored in video games.

Regulatory documents show that Saudi Arabia's sovereign wealth fund invested more than $ 3 billion in three US video game companies in the fourth quarter.

These investments include Activision Blizzard, Electronic Arts Corporation and Take-Two Interactive, all designed to reduce Saudi Arabia's dependence on oil.

Prince Mohammed (Prince Mohammed) is the head of the Sovereign Wealth Fund (also known as PIF). He told Bloomberg in 2016 that he was the first generation of people who grew up in Saudi Arabia and played video games.

The Mohammed bin Salman Foundation (MBS Foundation), an affiliate of the Crown Prince Charitable Association, announced in November that it had bought a third of the Japanese developer SNK, the King of Fighters and Samurai Shodown Corporation. Game developer.

The charity, also known as the Misk Foundation, said it would increase its stake to 51% in the future.

In the fourth quarter, the sovereign wealth fund acquired 14.9 million shares of Activision Blizzard, with a market value of nearly $ 1.4 billion.

At the end of December, other buybacks included stakes in 7.4 million shares in Electronic Arts and 3.9 million shares in Take-Two Interactive worth $ 1.1 billion and $ 826 million, respectively.

Inventories from three games manufacturers have increased since the end of the third quarter. Activision Blizzard grew approximately 27%, Electronic Arts grew roughly 12%, and Take-Two Interactive grew 18%.

Public mutual funds are an important part of the crown prince's plan, which aims to diversify the Saudi economy instead of relying solely on oil.

Over the past several years, the fund has made several significant investments, including Uber's purchase of $ 4.4 billion of shares and a major commitment to the SoftBank Group Vision Fund.

The big bet in the Olympics is the latest sign of how the crown prince and head of the sovereign wealth fund Yasser Al-Rumayyan has profoundly changed the way Saudi Arabia is investing its wealth.

Historically, the Saudi central bank invested surplus oil revenues mainly in the form of stable cash such as US Treasury bonds.

Al-Rumayyan said in December that Saudi Arabia missed the opportunity to buy cheap shares during the 2008 global financial crisis.

However, given the coronavirus pandemic that caused its shares to drop, the company is preparing to take advantage of the market downturn early last year.

In March, the General Mutual Fund transferred $ 40 billion from the country's foreign exchange reserves to finance a host of activities. The fund bought shares in companies like Citigroup and Facebook.

As of December 31, the total value of public investment funds held by Saudi Arabia was approximately $ 12.8 billion, compared to $ 7.1 billion on September 30.

It also underlines the fact that the value of Uber's public mutual fund shares has increased by $ 1 billion.

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