In this engaging discussion, BBC tech reporter Tom Gerken reveals Saudi Arabia's strategic $3.5 billion acquisition of Niantic, the publisher behind Pokémon Go. He explores the reasons behind the Kingdom's massive investments in gaming, driven by a desire for economic diversification. The conversation highlights the booming gaming scene in Saudi Arabia, fueled by government support and shifting social norms. Additionally, Abdirahim Saaed from BBC Arabic shares insights on the PIF's financial power and implications for data privacy in gaming.
Saudi Arabia's acquisition of Pokémon Go's gaming division reflects its strategy to diversify the economy away from oil dependence through entertainment investments.
The investment in gaming illustrates the kingdom's commitment to modernization and engaging its youth demographic amid broader social changes.
Deep dives
Saudi Arabia's Investment in Gaming
Saudi Arabia's Public Investment Fund (PIF) has made a significant move by acquiring the gaming division behind Pokémon Go for $3.5 billion, reflecting the country's ambition to diversify its economy beyond oil dependence. The PIF, a vast fund with approximately a trillion dollars, has been under the control of Crown Prince Mohammed bin Salman since 2015 and has invested heavily in various sectors, including sports and entertainment. This strategic investment highlights the kingdom's commitment to modernization and economic restructuring, as illustrated by its hosting of high-profile sporting events and its involvement in various gaming acquisitions. These efforts aim not only to bolster the economy but also to create a vibrant entertainment culture for its predominantly young population.
The Mechanics of the Pokémon Go Deal
The acquisition of Pokémon Go's gaming division involves several layers of ownership, with Niantic creating the game and a company called Scopely ultimately being sold to the PIF. This complexity arises from Nintendo's partial ownership of the Pokémon franchise, which complicates direct ownership claims over the game. The deal comes amidst Niantic's recent struggles, including layoffs and declining player numbers, prompting the company to cash out. Scopely's successful monetization strategies suggest potential changes to the Pokémon Go experience in the future, with fears of excessive in-game purchases emerging among players.
Cultural and Social Implications of Investments
Saudi Arabia's extensive investments in gaming and sports are seen as part of a broader strategy to enhance its international image and exert soft power through cultural engagement. The government has established dedicated entities to promote gaming and esports, recognizing the significance of engaging its youth demographic. Additionally, these investments coincide with notable social changes in Saudi Arabia, including improved women's rights and increased cultural liberalization. While there remain significant challenges, the kingdom's evolving stance on cultural representation highlights the transforming landscape fueled by its economic investments.
The Saudi Public Investment Fund (PIF) has agreed to pay $3.5 billion to buy the gaming division of Niantic, the Pokémon Go publisher. It’s the latest in a string of entertainment and gaming investments by the PIF. BBC tech reporter Tom Gerken tells us why the Saudi government is spending billions on gaming and what the Kingdom stands to gain from it.
Plus: BBC Arabic’s Abdirahim Saaed explains where the PIF gets its money and why the gaming scene is so big in Saudi Arabia right now.
Instagram: @bbcwhatintheworld
Email: whatintheworld@bbc.co.uk
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Presenter: Hannah Gelbart
Producers: William Lee Adams and Benita Barden
Editor: Julia Ross-Roy
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