Saudi Arabia’s Giant Gaming Investor Is Running Low On Cash
Over the last few years, Saudi Arabia’s Public Investment Fund, or PIF, has quietly become one of the most powerful forces behind the games you play. It owns Savvy Games Group, the company behind Monopoly Go, and has bought sizeable stakes in major publishers like Nintendo, Embracer Group, Capcom, and Take Two.
Most recently, PIF was involved in a huge deal to take Electronic Arts private in a joint acquisition worth around 55 billion dollars. For context, that makes it the biggest leveraged buyout in private equity history. When one of the world’s richest funds gets that heavily involved in gaming, it can shape the future of big franchises, studios, and jobs across the industry.
But a new report suggests that Saudi Arabia’s big spending spree is catching up with it. According to reporting from The New York Times, the PIF is now running short on easily deployable cash and is starting to pull back on new investments. That could have major ripple effects for how aggressively it pushes into gaming from here on out.
The fund still controls close to 1 trillion dollars in assets on paper, but a lot of that value is locked up in projects that are hard to sell or have no clear market value yet. While a spokesperson claims the PIF remains very liquid by regional standards with around 60 billion dollars in cash, multiple sources told the NYT that the fund has privately warned it is almost unable to allocate fresh money for the foreseeable future.
The twist is that most of the PIF’s troubled investments are not directly tied to gaming. Instead, they sit in large scale, ambitious projects inside Saudi Arabia itself. The most famous example is Neom, the planned futuristic region that was originally pitched with a 105 mile glass walled city called The Line. That mega project has reportedly been massively scaled back. Other struggling bets include a coffee chain that only has a single shop, a cruise line that owns just one ship, and an electric vehicle startup that still has not delivered a car three years in.
Because those kinds of projects are expensive to keep alive and do not have clear public stock prices, they tie up huge amounts of capital. That makes it harder for the PIF to just sell something off and free up cash for new deals, including in gaming.
The EA Buyout And Fears Of Private Equity In Games
Despite these money concerns, the PIF went ahead with one of its boldest gaming moves yet: teaming up with Silver Lake and Affinity Partners to acquire Electronic Arts and take it private. This was reportedly the fund’s biggest deal of the autumn and cemented Saudi money even deeper inside core gaming.
For players, that raises some serious questions. Huge private equity style buyouts usually come with one goal: squeeze as much profit as possible from the company in a relatively short time. When that thinking is applied to game publishers, it can lead to some nasty outcomes.
There are a few big fears around the EA deal:
- Short term profit pressure could push EA to chase safer, more aggressive monetization instead of creative risks.
- Costs might be slashed through layoffs, project cancellations, or studio closures to make the financials look better.
- In an extreme scenario, parts of EA could be sold off or shut down entirely if investors want quick returns.
EA’s CEO has been out in public trying to calm everyone down. The message is that it is business as usual, that the company’s values will stay the same under its new owners, and that the deal will not change what players actually see. But with the PIF’s own financial position looking shakier than before, some are understandably skeptical.
We have already seen how badly aggressive acquisition sprees can end. Embracer Group spent years buying up studios and IPs then saw a giant mystery deal collapse. The fallout has been brutal for the games industry: thousands of layoffs, the closure of teams like Volition, Piranha Bytes, and Pieces Interactive, the sale of Gearbox, and reported cancellations of projects including a new Deus Ex.
That history is why so many people are nervous about another huge leveraged buyout sitting over a major publisher like EA. If the financial pressure gets intense enough, players and developers are usually the ones who pay the price.
What This Could Mean For PC Gamers
So what does all this high level money stuff actually mean if you are just trying to enjoy your games on PC?
First, the PIF’s reported cash crunch might slow its pace of new investments in gaming. That could mean fewer surprise buyouts or big stakes taken in additional publishers for a while. For some developers and fans, that might be a relief after years of rapid consolidation.
Second, the EA deal is not going away. It has already happened, and it is the largest leveraged buyout the gaming world has ever seen. Big series under EA’s roof like Battlefield, Apex Legends, Dragon Age, and sports titles will now exist in a more financially pressured environment than before. That does not guarantee anything bad will happen, but it does mean every delay, cancellation, or pivot to more aggressive monetization will be watched closely.
Third, the broader pattern is clear. When deep pocketed funds and private equity push heavily into games, they usually expect big financial returns. If those expectations are not met, the reaction can be painful. Embracer’s cuts and the loss of beloved studios are still fresh for a lot of PC players who saw series they love suddenly put on ice.
On the flip side, large capital does sometimes keep risky projects alive or bring bigger production values to huge releases. The problem is that when the priority is investor returns instead of long term creative health, the stability of jobs, studios, and franchises becomes fragile.
For now, Saudi Arabia’s PIF is pivoting toward more conventional investments like publicly traded stocks and bonds, at least according to the latest reports. But its existing gaming footprint is massive and not going anywhere soon. How it manages that portfolio while juggling cash constraints will be one of the key background stories shaping the PC gaming landscape over the next few years.
Original article and image: https://www.pcgamer.com/gaming-industry/after-splurging-on-ea-saudi-arabias-public-investment-fund-is-reportedly-tightening-its-pursestrings-due-to-financial-distress-caused-by-numerous-troubled-projects/
