The scale of ambition for Saudi Arabia when it comes to moving into the games business and esports is well known. But trick is to come up with a strategy that makes investments pay off in a timely way.
One of the key leaders charged with executing on both the ambition and the investments is Brian Ward, CEO of Savvy Games Group, a Riyadh-based holding group that owns ESL FaceIt Group, Scopely, Vindix and other properties. Through well-timed acquisitions, Ward has built the world’s largest esports company, the 11th-largest game publisher and added 3,800 employees in 22 countries.
And it’s not just about amassing a lot of properties with a lot of capital. Savvy Games Group happened to buy mobile game maker Scopely for $ 4.9 billion just a month before the launch of Monopoly Go, which generated $ 2 billion in revenues in its first 10 months on the market.
Ward did a fireside chat with Lisa Cosmas Hanson, president of market research firm Niko Partners, at our GamesBeat Summit 2024 event last week. Cosmas Hanson has provided market research on games for decades on markets like Asia and the Middle East.
GB Event
Lil Snack & GamesBeat
GamesBeat is excited to partner with Lil Snack to have customized games just for our audience! We know as gamers ourselves, this is an exciting way to engage through play with the GamesBeat content you have already come to love. Start playing games now!
Ward has nearly 30 years of studio and operations experience, including senior positions at Electronic Arts, Microsoft, and Activision Blizzard. He previously led worldwide studios at Activision and managed all the development at more than a dozen studio acquisitions.
They talked about Saudi Arabia’s ambition to offset the oil business by building a global hub for esports and gaming, as well as the construction of brand new cities such as the esports-focused Qiddiya and the sci-fi linear city dubbed The Line in Neom, Saudi Arabia. The kingdom recently announced the Esports World Cup will have a $ 60 million prize pool as it takes place in Riyadh this summer. This is not to say that Saudi Arabia does not have its challenges. There are issues related to human rights, and creating cultural change in a place that values tradition is not going to be easy. To that, Ward said he had his own preconceived ideas about the country before he went and he said the pace of change is astonishing.
This fireside chat was part of GamesBeat’s own ambition of assembling the world’s important gaming leaders in relevant conversations for our community. Here’s an edited transcript of the fireside chat.
Lisa Cosmas Hanson: I’m the president and founder of Niko Partners. We provide market research and intelligence on the games industry in the Middle East and Asia. We study what Brian what does, and Brian is here today to talk about all the things going on in the Middle East and the Kingdom of Saudi Arabia, and Savvy Games in particular.
Brian is the CEO of Savvy Games Group, based in Riyadh. Under his leadership, in just over two years, Savvy has become the world’s largest esports company and 11th largest games publisher, with 3,800 employees in 22 countries, including several teams and intellectual properties. But before those two years, Brian has nearly 30 years of studio and operations experience, including senior positions at Electronic Arts, Microsoft, and Activision Blizzard. He and I met maybe two decades ago when he was at Activision. While he was leading worldwide studios at Activision, he managed all the development at more than a dozen studio acquisitions. He has a lot of accomplishments under his belt, and I think this is going to be a pretty interesting session.
We should launch right into some of the questions because we have a limited time and so much to say. Saudi Arabia is the only country in the world, as far as I know, with a national strategy on gaming and esports for now. Why did the government create such a strategy, and what are the pillars?
Brian Ward: It’s useful, I think, to level set about the Middle East. MENA, Middle East and North Africa, is 22 countries across the top of Africa and through the Arabian peninsula and so forth. That’s a population of 500 million people, mostly Arabic speakers, but like most other countries – other than Canada, where I’m from, and the United States – most people speak another language. A lot of English, French, and others. Arabic is the fifth most spoken language in the world.
This market and population of 500 million people across 22 countries has about 300 million gamers. That’s more gamers than in North America or western Europe. This is a seriously underserved market. It’s only the 19th largest at the moment, but it’s the second fastest growing behind LatAm.
The strategy emanates, essentially, from Vision 2030. As most people hopefully are now aware, Vision 2030 is the blueprint for Saudi Arabia to diversify its economy away from oil and gas and into 13 other industrial sectors – which sounds like a good idea by itself – and to transform its society into a more welcoming place with more opportunities for women and so forth. Now, this transformation has been underway since about 2017, and these 13 industrial sectors that are targets for investment include entertainment.
As we all know, games is the biggest part of entertainment. We all like to write about that. It’s natural for the Kingdom and its Public Investment Fund, the sixth or seventh largest sovereign wealth fund in the world at about $ 750 billion of assets under management, to invest heavily in our sector, to promote it and create jobs.
Hanson: Speaking of the Public Investment Fund, as part of Saudi Arabia’s strategy overall, the Public Investment Fund has invested in Savvy. Savvy is part of this whole strategy.
Ward: Yes. When we started, which is almost three years now – the company is about two and a half years old now – there was no national strategy for our sector. That was announced a year or so later. But the company was formed and meant to be the tip of the spear for everything in games and esports in the Kingdom, and become a leading investor worldwide in great companies and teams like Scopely, FaceIt, ESL, and others.
The national strategy was developed a year and a half ago with about 86 different initiatives under it. Some of these fall under the stakeholders in the Kingdom, like the ministry of communications and IT, which is a $ 1.1 billion investment fund for infrastructure, training and development, incubation, acceleration, and so on. Other major parties would be the Saudi Esports Federation, which was started in 2018. I think there were only two professional teams in Saudi Arabia at the time, and now there are more than 100. The national development fund, the Esports World Cup – which I think we’ll touch on in this chat – and of course Savvy.
Hanson: In two and a half years, anybody would be envious of the fact that you had about $ 38 billion in an investment fund that you were in charge of investing. You were building out far more than just a games industry in Saudi Arabia, but really striving toward having Saudi Arabia be one of the global hubs of gaming and esports. There must be a lot to that. I’m sure people want to know if there’s a strategy to that investment. Do you want to invest in more mobile game developers? Why did you buy Scopely? Things like that.
Ward: There’s a couple of things in there. One is around building Saudi Arabia into a global hub. Our main strategy and mandate, a ridiculously audacious mandate, is to become the world’s leading global games investor and promote our industry in both games and esports. I say ridiculous because there’s Tencent. There are amazing companies that have taken decades to get where they are, and we’re expected to compete and perhaps surpass them. But we’ll do our best.
A major portion of our strategy is to work with other stakeholders in the Kingdom to build Saudi Arabia into a global hub for our industry. That includes foreign investment, incubation and acceleration, training and skills development, and so on. We have a particular division of our company that’s focused on working with government ministries and other partners to build that part of our mandate.
The other part of your question is, what is our strategy? Why did we buy Scopely? Monopoly Go was a good reason. I’ll come to that in a second. When we started, our very first investment was the purchase of ESL from MTG and combining it with FaceIt. You might ask, if you had a substantial pool of capital, why would your first investment be in a segment of our industry that’s most challenging? And the answer was that there’s a significant school of thought and belief in the region and the Kingdom that professional esports, 10 years from now, might be one of the most important cornerstones of entertainment, across all forms of entertainment. If that’s true, we’re not building an esports company. We’re building a media, events, and entertainment company off the back of professional esports.
We all know that esports engagement is off the charts. We knew, coming out of COVID in a very pragmatic industry at the time, that there would be a lot of consolidation. Power dynamics would make for an inequitable ecosystem for publishers, teams, and players. We thought we could contribute in a way that would be different, because we have a much longer investment time horizon. VCs or private equity have a three to five year time horizon. We look out seven to 10 years, or 10-plus years. We thought that if we could take a longer-term view to investing in esports, we could weather some of these more short-term issues and perhaps make a meaningful contribution to the esports business.
For the first year we focused on esports. Sort of on the back of ESL/FaceIt, and then we added Vindex. We now have the best and most experienced brain trust in esports at our company. We made a 30% investment in VSPO, which has an 80% market share in China and southeast Asia. Roughly a 40% market share overall in esports. I think what we’re seeing is that with these scale and these increased capabilities, a flywheel is beginning to develop where–at this point it’s very hard for a publisher with one or two esports titles to make the sort of investment to get to the capabilities that ESL/FaceIt/Vindex has. They can only amortize that cost against two titles. We’re amortizing that cost against many titles and 40-plus major tournaments a year. That sort of scale gives publishers more comfort. It gives sponsors and advertisers more comfort. We’re starting to see longer-term deals on both sides of that equation.
That was the first year. The second year we said, “Well, we haven’t done anything in games.” On the theory that the free-to-play live services model was eating the traditional model, we began to look for excellent companies in mobile-first, free-to-play live services. Zynga was already gone at this point. There weren’t many other candidates, to be honest, at that scale. Scopely was by far the best. They had soft launch data on Monopoly Go from the Nordics while we were in negotiations. We knew what that data was. They thought it was going to be a good game. Maybe the best game they had ever made. But Walter and Javier are so conservative. If they thought it was a good game, maybe it was a really good game. But nobody knew it was going to be what it became.
Hanson: Circling back to the subject of Arabic speakers and the fact that you’re building, in the Middle East, an industry around a predominantly Arabic-speaking region–there are Arabic speakers all over the world. But everything is different. It’s a right to left language. The tool set for Niko Partners–in our research, we know that for Arabic gamers, voice chat is paramount. They don’t do a lot of typing in chats. The games they play aren’t designed for a right to left language. The tool sets might not be there. There’s a lot of stuff to do. Does Savvy have its sights set on localization to bring more global games to the Kingdom or to the Middle East? You were saying that this is an untapped, underserved market. What steps can Savvy take to help bring it along?
Ward: Our strategy on that point is focused on this division we call 966, which was the area code for KSA. Unlike our other units, it’s not intended to drive revenue, make a profit, or deploy much capital. It’s intended to work with government ministries and commercial partners elsewhere who have done some of the things I’m going to mention.
It boils down to three pillars. One is making sure that Saudi has the best incentives and programs on offer for foreign investment, to attract big companies who have–a lot of our global hubs in our industry have been built this way. Ubisoft of course was amazing at bringing leadership to new places and hiring a lot of local people and building them up. Montreal built that way. Shanghai and so forth. If we can have the best programs on offer that are commercially competitive with other jurisdictions in the world and attract these companies to create jobs, that would be one pillar.
The second pillar would be incubation and acceleration for local entrepreneurs who want to start companies in our industry in Saudi. This is a country where 70% of the population is under 35. About 67% identify as gamers, and 48% are women. That’s a pretty enormous number. The whole society has a huge drive toward entrepreneurship. That may not sound like something new in America, but in the Middle East it’s a huge shift.
The third pillar is training and development, working with universities and commercial partners to develop the right sources of occupational and vocational programs, to make sure that–Saudis are tremendously enthusiastic about our sector. Super knowledgeable. But they don’t have any experience.
Hanson: There are so many avenues where this growth and investment could go. Just shining a different light on what it is in the Middle East and Saudi Arabia. It seems like there are a lot of changes and advances going on there, especially over the last five years. That’s a fair number to put on it. But there are issues there as well, as in most societies around the world. The United States is no exception. I don’t want to call anybody out. But in countries where preserving cultural value is of paramount importance, we’re going to naturally run into some things that are uncomfortable during a transition period.
How does Savvy approach that? There are some issues that still need to be tackled around women gamers, women developers, other DEI concerns in the workforce, women in the workforce. There are a lot of global companies and global people who, when looking at the region, probably hope that there will be more evolution and change. Is Savvy doing anything to help with that? Is this something that you’ve run into as well as someone from North America? Do you sometimes scratch your head and say, “What’s going on?”
Ward: I think I was scratching my head more before I went there, because like most people I had a preconceived idea of the place before I’d been there for the first time. Saudi Arabia? Games? How is that possibly going to work? And then I went there for the first time, and after about three days the light bulb went on. Okay, Vision 2030 is a serious thing. I can’t walk 50 yards in Riyadh without seeing a Vision 2030 sign and something related to the project. The transformation of the society, which is what we’re really talking about, aside from the economic diversification, from a westerner’s point of view is astonishing. The only reference point I really had is China 40 years ago. They flipped the country 180 degrees and said, “We’re going this way now.”
This is only five or six years old. Rome wasn’t built in a day. But a lot has happened. The participation of women in the workforce, as an example, has doubled. It’s already exceeded the 2030 goal, which I think is 35%. It’s very hard to find, online, accurate portrayals of what is happening in the Kingdom, because the transformation is happening so fast. You also can’t really anchor on what is on the books. “This thing is an offense.” It might be an offense on the books, but there are a lot of things in this country that are an offense on the books, and nobody is ever challenged on them.
These are young people who, in my experience, are exactly like young people everywhere else. They’re on their phones. They’re on apps. They all have Netflix. They’re all extremely westernized. Many of them were educated elsewhere. They’re very progressive in their thinking. They want the exact same things young people everywhere want, which is more freedom and opportunity.
Hanson: All that is good and the momentum is there. For the people observing, we should acknowledge that the positive momentum is there and there’s still a great deal of work to be done. I’m sure that there will be disappointing and uncomfortable instances in every country around the world that happen. I’m happy to think about how the video game industry might help propel some of these things forward, and esports in particular being a great global unifier. I have hope that games and esports might be able to help bring things forward.
Ward: I think about a couple of things. One is, there is tremendous momentum, right from the top of leadership, which is all aligned and has strong population demographic support–I read a statistic about a year ago, with “youth” defined as under 30. About 98% of the youth in Saudi Arabia think the economy is moving in the right direction. That number in this country would be more like 10%.
The other thing I think of–the reason I actually went there is not just because of a chance to try to build a big company with a huge commitment of capital, but a chance to help some people transform their country under Vision 2030 in some very positive ways. If you want to see some change, be that change.
Hanson: While the Kingdom of Saudi Arabia is obviously making the changes and the investments you’re talking about, there are other locales in the Middle East that also aspire, and they’re also rich with oil money. The United Arab Emirates and Qatar come to mind. Because it’s relatively geographically small compared to North America, in your opinion, is there room for more than one global hub in the Middle East, or is there competition between Dubai, Abu Dhabi, Riyadh, and so on? How is that being handled?
Ward: It’s a competition. Who in the room doesn’t like a good competition? It’s part of the business. We want to win, but the Emiratis, whether it’s in Dubai or Abu Dhabi, are doing a tremendous job. They have great programs. Our theory is that a rising tide lifts all boats. This is a seriously underserved market. There’s room for a lot more than just one hub.
Hanson: Raise your hand if you’ve heard for Neom. Can you give them a five-second introduction?
Ward: The craziest construction project on the planet, ever.
Hanson: It’s a city built in a line. I can’t remember how many kilometers. But when we were in Riyadh we got to do a walkthrough along a mockup of it. It’s fascinating. There’s also the digital city, Qiddiya. That’s another area where I went through the mockup, at Gamescom Asia. The investment in not just game studios, but really creating this totally new approach to life through the digital aspect, through modern thinking–it’s such a juxtaposition now in this transition period. To picture this totally futuristic modern city in the middle of what’s currently an empty desert, it’s almost a metaphor for what’s going on with the games industry itself in the Middle East. I look forward to seeing what you and Savvy do with that going forward. Is there anything you’d like to say to wrap us up?
Ward: Thankfully we’re not responsible for Neom as a project. But they have their own games-oriented division. They want to attract people to the future city to own studios there and so forth. They’re offering a number of interesting incentives already to relocate to Riyadh before it opens, if it ever opens in my lifetime. Qiddiya, on the other hand, which is 20 minutes northwest of Riyadh, is going to be an entertainment city. That’s where the Formula One circuit will relocate. Six Flags is going to have their biggest park in the world there. Many other things. And on the upper plateau there’s going to be a huge games and esports district, with enough housing for some ridiculous number, 250,000 people employed in the game industry, and five or six esports arenas.
It’s a very exciting project, and I think that it will actually open in my lifetime. They’re talking 2027, 2028. Hopefully I’ll live that long.
