Last month, Saudi Arabia unveiled the initiation of an annual Esports World Cup, featuring the most renowned games globally and offering the highest prize pool ever witnessed in esports history.
The tournament is scheduled to occur every year in Riyadh, commencing in the summer of 2024, as Saudi Crown Prince Mohammed bin Salman stated.
According to the announcement, clubs will compete across games of different genres to achieve the title of ultimate champion in the Esports World Cup.
Sports, esports, and gaming are integral components of the crown prince’s Vision 2030 transformation plan, aimed at diversifying the kingdom’s economy and reducing its dependence on oil. The government is investing significant amounts of money towards this endeavor in the range of hundreds of billions of dollars.
According to the statement, the competition will introduce a novel concept that involves teams from various games competing against each other. This style motivates and encourages clubs to embrace the challenge of becoming the ultimate Esports World Cup Champion.
The monarchy plans to incorporate diverse activities and events within the tournament to draw in visitors and tourists to the capital. This initiative is part of a broader strategy to establish the capital as a prominent international center for gaming.
Saudi Funds Can Boost the Financial Funk of Esports
Saudi Arabia has been gradually expanding its influence in esports alongside its well-known investments in sports like soccer, golf, and boxing.
The Financial Times reported in July that Savvy Games Group (SGG), led by bin Salman, has made significant purchases totaling about US$8 billion in the previous 18 months. This includes the purchase of US-based games developer Scopely for US$4.9 billion in April.
The attractiveness of esports to Saudi Arabia is readily apparent. Besides bin Salman’s fondness for competitive gaming, the gaming business attracts a youthful audience and has a fervent fanbase worldwide. The sector is expected to achieve a value of US$5.74 billion by 2030.
However, it is important to note that esports is experiencing a significant financial downturn. Organizations and teams are still accumulating losses, as their excessive dependence on sponsorship and unfavorable macroeconomic conditions have worsened their difficulties.
Anticipated are mergers and acquisitions, workforce reductions, and insolvencies. Gamesquare has just acquired Faze Clan for a reported sum of US$17 million. This significantly contrasts with the organization’s previous achievement of a SPAC merger of US$725 million in July 2022.
Saudi Arabia’s huge riches might act as a crucial source of financial support for the esports industry if alternative investment opportunities become scarce. The kingdom’s overarching objective is to establish itself as the central hub for the gaming industry, encompassing all aspects ranging from hosting tournaments to engaging in game development.
Observing the reaction of esports enthusiasts to this novel World Cup will be intriguing. The League of Legends European Championship (LEC) terminated its collaboration with the Saudi smart city Neom over three years ago due to public criticism of the country’s anti-LGBT laws.
Bin Salman will remain unaffected by any imminent criticism. In the previous month, he openly said that he disregarded allegations of sportswashing and committed to maintaining Saudi Arabia’s substantial financial support in pro sports.