Saudi Arabia’s sovereign wealth fund has spent $1bn on a stake in Swedish gaming company Embracer Group as it deepens its push into the global games market.
The acquisition of 100mn shares will make Public Investment Fund’s Savvy Gaming Company the second-biggest investor in Embracer — holding an 8 per cent stake — after its founder and chief executive Lars Wingefors.
Savvy Gaming Company was launched earlier this year by PIF, one of the biggest sovereign wealth funds in the world. It has already made a number of big acquisitions in esports and gaming, including the acquisition of Modern Times Group’s esports division for $1bn in January this year, along with the competitive multiplayer technology platform Faceit.
The $1bn purchase saw Embracer’s share price gain 10 per cent in morning trading on Wednesday to reach SKr95.2.
It comes as dealmaking has risen sharply in the gaming sector since the start of the coronavirus pandemic as Big Tech and entertainment companies have looked to increase their exposure to an industry that already dwarfs other forms of mass-market entertainment.
Wingefors said the relationship with Savvy would help Embracer set up a regional hub in the country so it could expand into the Middle East and north Africa, which boasts “more active gamers than either the US or western Europe”.
Since 2019, Wingefors has turned his company into the most deal-hungry gaming company in Europe. Since the start of 2020, he has made more than 60 acquisitions, paying more than $8bn, and has gained a reputation for his light-touch approach to integrating new businesses.
“We will be able to make investments across the MENA region, either organically, via partnerships, joint ventures, or via acquisitions of companies led by strong entrepreneurs,” he said.
Embracer’s gaming roster includes the loot shooter game Borderlands, the street gang adventure series Saints Row, and Goat Simulator, in which players simulate the life of a goat.
Crown Prince Mohammed bin Salman, who chairs Savvy Gaming Company and PIF, is known to be an avid gamer and is a longstanding investor in major gaming groups.
In May, PIF acquired a 5 per cent stake in games maker Nintendo, its latest investment in a Japanese gaming company. PIF has also made large investments in Activision Blizzard, Electronic Arts and Take-Two Interactive.
Last month, it emerged that a foundation owned by bin Salman had acquired a 97 per cent stake in Japanese gaming group SNK Corporation, which makes games including Metal Slug and Fatal Fury.
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