Yahoo Finance Saudi Arabia Chases Gaming Dream With More Prize Money Than PGA
(Bloomberg) -- South Korean gamer Josh Ahn donned a traditional Saudi thobe as he walked through egaming arenas in Saudi Arabia on Tuesday night. He wanted to be adventurous and feel what it’s like to dress as a local in a place he said he could one day call home.
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Ahn, who helps run egaming team T1, is visiting Riyadh for the world’s first Esports World Cup. His players are among more than 1,500 gamers competing for a piece of a $60 million prize pot, a record for esports.
The potential payouts are triple what professional golfers competed for in May’s PGA Championship and on par with Wimbledon winnings — a sign Saudi Arabia may go as big on egaming as it has on traditional sports like golf and football.
The kingdom hopes the event, featuring 21 games from developers including Microsoft Corp.’s Activision Blizzard, Electronics Arts Inc. and Tencent Holdings Ltd.’s Riot Games, will be the biggest triumph yet in its mission to become a global epicenter for esports.
Crown Prince Mohammed bin Salman — an avid gamer himself said to have an affinity for Call of Duty — has made that dream a key tenet of his Vision 2030 agenda, which aims to diversify the economy away from petroleum wealth by creating new industries and opportunities for his young population. He wants Saudi Arabia to house 250 gaming companies, develop dozens of homegrown games and add more than $13 billion to GDP by the start of the next decade.
The kingdom is among the fastest-growing regions for the games industry after years of being underserved, according to analytics firm Niko Partners.
“We want Saudi to be a natural part of the conversation where you cannot talk about the gaming industry and especially esports without mentioning Saudi on the top of your mind,” Prince Faisal bin Bandar bin Sultan Al Saud, chairman of the Saudi Esports Federation, said in an interview.
Event Boycotts
The event hasn’t been without controversy.
Some esports personalities and gaming celebrities have criticized Saudi Arabia’s new centrality in esports, citing the country’s track record with LGBTQ and women’s rights.
Esports event host Stella Chung said she made the “really tough decision” to decline an offer to work at the Esports World Cup after feeling she wouldn’t be able to express herself as a bisexual.
“I felt boycotting the Esports World Cup would be a better use of my energy to support my marginalized community,” Chung said.
The Esports World Cup Foundation did not respond to a request for comment on the topic.
While viewers are often less critical, Chung said, many people working in esports are debating how to move forward as financial support for esports retreats in the West, making Saudi influence hard to avoid.
Team Liquid, which competes in three major leagues, is trying to find a middle ground. When players take the arena, they’ll wear pride jerseys in support of LGBTQ rights.
Competitors were permitted to wear the shirts showing streaks of rainbow after talking with Saudi authorities, according to Steve Arhancet, co-chief executive officer of the team.
“It’s a very strong message,” Arhancet said. “Maybe there are some gay Saudis that are gamers and watching the broadcast and feel maybe something is changing here.”
Driving Force
South Korea’s Ahn said the apprehension shown toward Riyadh by some in the industry wasn’t an issue for him or his players, who are visiting Saudi Arabia for the first time.
The bigger concern, he said, is whether the kingdom can make the Esports World Cup a success that can impact the broader trajectory of the industry.
The Saudi government is the driving force behind funding for the event, which costs in the range of nine figures, said Ralf Reichert, CEO of the Esports World Cup Foundation.
The kingdom plans expenditures of more than $300 billion this year, according to its budget projections, with much going to Vision 2030 initiatives that support the economy’s diversification beyond oil. That includes so-called giga projects like the entertainment city of Qiddiya.
Esports World Cup operator ESL FACEIT Group has a five-year deal to help imagine Qiddiya’s esports district, set to have four stadiums in close proximity to other entertainment offerings like a Dragon Ball theme park and one from Six Flags Entertainment Corp.
“An indoor arena for 5,000, 10,000 or 20,000 people doesn’t exist yet in Riyadh. That’s what’s being built,” said Craig Levine, co-CEO of EFG, as the company is known.
More Than Money
It may take years for the kingdom to see returns on its esports investments and specifically on tournaments, which have been a challenging business proposition.
Although hundreds of thousands of people watch competitive gaming tournaments on Alphabet Inc.’s YouTube or Amazon.com Inc.’s Twitch, esports businesses have struggled to convince them to spend money online. Investor and sponsor funds have also dwindled broadly in recent years.
Building infrastructure for sports-like tournaments has also proven prohibitive for many.
Comcast Spectacor, owner of the now-defunct Philadelphia Fusion Overwatch League team, pivoted its $50 million esports arena into a multiuse, dining and retail facility.
Saudi Arabia does have a long-term plan to make the Esports World Cup profitable but it’s still being worked out, Prince Faisal said.
Revenue from the video-game market in Saudi Arabia, the UAE and Egypt is forecast to reach $2.9 billion in 2028 from an expected $2.1 billion this year, according to Niko Partners.
The real value may come from Saudi Arabia’s youthful population. Almost 70% of the kingdom’s people are considered gamers, meaning they play or watch video games at least twice a week.
“Five years from now, none of them will look at esports as a leisure activity but as an opportunity to pursue a career,” said Fadi Hilani, a senior academic and research fellow at the National Council on US-Arab Relations, who studies esports. “That’s a wise investment.”
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