With its pending acquisition of local video game developer Scopely, Savvy Games Group is becoming a new, aggressive player in the industry. Savvy, owned by Saudi Arabia’s Public Investment Fund, agreed April 5 to purchase the Culver City mobile game maker for $4.9 billion.
The deal follows Savvy’s acquisition of Vindex, a global esports technology and infrastructure company in New York, through its subsidiary ESL Faceit Group. The deal took place last month.
Michael Pachter, managing director of equity research at Wedbush Securities in downtown Los Angeles, said Savvy has a lot of money, and is trying to buy companies that make money.
Scopely has revenue of $1.5 to $2 billion annually, Pachter said, adding he had no idea if Savvy had revenue at all and he suspected that if the company did it would be inconsequential.
“They’re an acquisition company that will manage the assets acquired,” Pachter said.
Big investors
The investment fund, controlled by its chairman, Mohammed bin Salman, who’s both the prime minister and crown prince of Saudi Arabia, has about $620 billion, of which $38 billion has been provided to Savvy, founded in Riyadh in January of last year.
Both the fund and Savvy have invested in U.S., European and Japanese video game companies. It is part of bin Salman’s attempt to diversify the country’s economy away from oil.
Last year, for instance, the fund invested in Capcom Co. Ltd., Nexon Co. Ltd. and Nintendo Co. Ltd., all at a 5% stake for a combined amount of nearly $1.5 billion. Also last year, the Electronic Gaming Development Co., a subsidiary of the Mohammed bin Salman Foundation, acquired a roughly 96% stake in Japanese game developer SNK Corp., known for the “King of Fighters” and “Samurai Shodown” game franchises.
And in late 2020, the fund invested more than $3 billion in three U.S. based gaming companies: Activision Blizzard Inc. in Santa Monica, Electronic Arts Inc. in Redwood City and Take-Two Interactive…
Read the full article here
