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BEIJING, February 16 (TMTPOST)— With an equity investment in an esports startup backed by Tencent Holdings Ltd, Saudi Arabia is tapping into Chinese gaming market.
Source: VSPO
VSPO, a Chinese tournament operator and esports company, announced on Thursday to receive US$265 million from Savvy Games Group, a wholly owned subsidiary of Saudi Arabian sovereign wealth fund Public Investment Fund (PIF). As the largest direct investment in the industry, the deal would make Savvy VSPO’s largest single shareholder. The two companies called the deal a landmark commercial partnership between China and the Kingdom of Saudi Arabia in the esports sector, though not revealing further details of terms such as the equity percentage.
VSPO, recently rebranded from VSPN, has operated more than 70% of China’s esports tournaments and leagues in China, including the franchised ones for popular games such as Honor of King, PlayerUnknown’s Battlegrounds (PUBG) and League of Legends. It has long-term partnerships with game developers including Tencent, Garena and Krafton. “This historic investment will strengthen our ambitious global strategy, with a particular focus on Asia and the Middle East where we will support Savvy’s vision to grow esports throughout this incredibly dynamic and young region,” VSPO founder and CEO Dino Ying said.
The deal came was deemed as a new catalyst for China’s gaming industry, which just saw easing of rigid curb for more than a year. The National Press and Public Administration resumed issuing gaming licenses to domestic games in last April and approved in December to grant publishing licenses to 44 foreign online games, the first group of foreign names in about 18 months.
The investment marks Saudi Arabia’s increasing efforts to be an industry leader. The transaction would give us a major foothold in the important Asia region and we are looking forward to expanding into different regions with VSPO, Savvy CEO Brian Ward said on Thursday.
Savvy unveiled in last September to invest 142 billion riyals (US$37.8 billion) to support domestic game development and world-class esports competitions in the region. Savvy is part of our ambitious strategy aiming to make Saudi Arabia the ultimate global hub for the games and esports sector by 2030, said Crown Prince Mohammed bin Salman. The government was said to expect the strategy to set up 250 game developing companies that will create 39,000 jobs, and raise the sector’s proportion of the country’s GDP to 50 billion riyals by 2030.
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