Recently, a Saudi sovereign wealth fund has become Nintendo’s largest shareholder outside of Japan. According to a Japanese filing, the Saudi Public Investment Fund, a state investment vehicle led by Saudi Crown Prince Mohammed bin Salman, has increased its stake in Nintendo from 7.08 percent to 8.26 percent.
This is further evidence that the country is trying to broaden and diversify its economic base beyond its primary export—oil. Recent financial filings reveal that the fund has invested heavily in a wide variety of non-oil related businesses, including significant stakes in numerous American corporations such as Boeing, Citigroup, Disney, and Uber. The funds are part of Mohammed’s larger “Vision 2030” initiative, which aims to reduce the kingdom’s reliance on oil.
The video game industry has benefited from several of these investments. According to an announcement made by the Saudi state news agency SPA in September 2022, the Saudi fund owns a gaming company, Savvy Games Group, that plans to invest $37.8 billion in an effort to make the kingdom a global gaming hub. Public documents reveal that Saudi Arabia has purchased shares of both Activision Blizzard and EA Games, two of the largest and most successful video game publishers in the United States.
KINGDOM OF SAUDI ARABIA BOUGHT NINTENDO FOR A PROJECT WITH LONG-TERM GOALS.
PIF’s market dominance makes betting against it difficult, according to Kenji Fukuyama, an analyst at UBS. If the fund keeps increasing its stake, it could provide support for Nintendo shares. Nintendo was PIF’s third investment in a Japanese video game company that met the public disclosure criteria of 5% in 2022. The other two were Nexon Co. and the creators of Street Fighter, Capcom Co.
According to information compiled by Bloomberg, it has recently acquired the gaming and entertainment companies Activision Blizzard Inc., Electronic Arts Inc., Take-Two Interactive Software Inc., and Koei Tecmo Holdings Co.
For PIF, Nintendo was the third investment in a Japanese gaming company that year, joining Nexon Co. and Street Fighter developer Capcom Co. Bloomberg reports that it now counts Activision Blizzard Inc., Electronic Arts Inc., Take-Two Interactive Software Inc., and Koei Tecmo Holdings Co. among the gaming and entertainment giants in its rapidly growing portfolio.
According to Akira Takatoriya, a consultant who works with Japanese companies exporting pop culture content to the Middle East, “the Nintendo purchase, as well as investments in game companies around the world, is part of Saudi Arabia’s long-term project to become less reliant on oil.”
PIF’s $45 billion investment in technology investor SOFTBANK was motivated in part by MBS.
The 2030 goals of the Saudi state provide a framework for the wealth fund’s investments, and they include, among other things, the formation of strategic economic alliances and the introduction of cutting-edge technology.
The PIF has funded research into technologies like large-scale data analysis, original content creation, and alternative energy. Neom, a futuristic metropolis in northwest Saudi Arabia, is being built with funding from PIF with the intention of becoming the region’s first gaming centre. Promotional materials claim that it will host a campus that will encourage game publishers, programmers, and artists to collaborate on a single project.
After the murder of Jamal Khashoggi, a journalist for the Washington Post, by Saudi agents in 2018, MBS is making amends with the Trump administration. This sparked a multi-year effort to connect with the world’s top startups. PIF’s initial investment of $45 billion in SoftBank Group Corp.’s first Vision Fund was motivated by MBS.
Expert in the field Serkan Toto of Tokyo says, “I think PIF is not even done and wouldn’t be surprised if it continues to increase its stake in Nintendo going forward.”