According to a filing made on Friday, Feb. 17, the Public Investment Fund (PIF) of Saudi Arabia has become Nintendo Co.'s largest external stakeholder.
Bloomberg reports that the Saudi PIF has increased its stake in the Japanese gaming firm from slightly over 6% at the beginning of the year to 8.3%.
PIF's new position sees it surpass the Japanese Government Pension Investment Fund and trail just Nintendo's current stake. According to the report, the most recent purchase was undertaken solely for investment.
Saudi Arabia's Gaming Industry Push
PIF's most recent investments are motivated by Saudi Arabia's 2030 goals, which include reducing dependence on oil by forming strategic business alliances and bringing in cutting-edge technologies.
Renewable energy, big data analysis, and entertainment content are a few of the technologies that the PIF has pursued. PIF is also funding the construction of Neom, a futuristic city in northwestern Saudi Arabia that will house a gaming hub to draw businesses, developers, and artists to collaborate on games.
More than ever, Saudi Arabia is expanding its presence in the games and esports industries under Crown Prince Mohammed bin Salman. With a $38 billion budget and industry veterans in control, the country established Savvy Games Group under the PIF umbrella. Savvy recently invested $260 million in a Chinese competitive gaming organizer supported by Tencent Holdings Inc.
PIF's growing portfolio in games and entertainment companies includes Activision Blizzard Inc., Electronic Arts Inc., Take-Two Interactive Software Inc., and Koei Tecmo Holdings Co., and the purchase of Nintendo shares is the latest addition.
Gaming Fans React to Saudi Arabia's Gaming Push
Video Games FN tells us that the move has prompted concerns among gamers, who fear that Saudi Arabia will try to leverage its economic power to influence the content of the video games produced by these studios.
Saudi Arabia has a history of banning games due to their content, including "The Last of Us Part 2," the God of War titles, and "Spec Ops: The Line." Despite this, industry consultant Serkan Toto said he would not be surprised if PIF continues to increase its stake in Nintendo in the future.
Bloomberg tells us that the acquisition represents PIF's third investment in a Japanese video game firm that has reached the public disclosure threshold of 5%. Other investments include Nexon Co. and Street Fighter producer Capcom Co., which transpired in 2022.
UBS analyst Kenji Fukuyama believes that this investment in Nintendo is a sign that PIF will maintain its interest in the gaming sector.
He also believes that this purchase has the potential to support Nintendo share prices if PIF continues to raise its position in the company. Regarding the investment, Nintendo has remained silent.
In other news, Nintendo of Europe has reminded users of the 3DS and Wii U eShop closures scheduled for next month and advised them on what they can do in preparation for the closure. Read more here.
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