Today, Bloomberg reported that Saudi Arabia’s Public Investment Fund (PIF) has recently purchased enough shares of Nintendo for the country to now own 5.01% of the Japanese video game company. By acquiring 5% of Nintendo, Saudi Arabia is set to become the fifth-largest owner of Nintendo shares, which means the country could potentially have weight and say about Nintendo’s business practices if they continue to invest. However, according to the PIF, the ownership of Nintendo stock is solely for “investment purposes.” When Bloomberg asked a Nintendo spokesperson for comment, the representative stated the company had only learned about the Saudi Arabian investment through news reports and does not wish to state an opinion about individual shareholders.
This move by Saudi Arabia reflects the county’s history of previous investments in video game companies over the last couple of years. In 2020, Saudi Arabia had purchased 33% of shares for the King of Fighters series developer, SNK, with the intention of becoming a majority shareholder by eventually owning 51%. Now, Saudi Arabia owns an astonishing 96% stake in the Japanese-based company. Additionally, earlier this year, Saudi Arabia acquired 5% ownership of both Capcom, Street Fighter and Resident Evil series developer, and Nexon, totaling a $1 billion investment. Lastly, Saudi Arabia had also invested over $3 billion into American video game companies, such as Activision, EA, and Take-Two Interactive, in February of last year.
The explanation for why Saudi Arabia is investing so heavily into video games is still ambiguous. As for right now, Nintendo believes Saudi Arabia’s investment is currently unlikely to have “wider effects” within the company; however, Saudi Arabia has already proven to desire majority shareholder status for at least one company. Hideki Yasuda of Toyo Securities, a Japanese investment firm, hypothesized to Bloomberg: “Saudi Arabia has been beefing up efforts to create its own content industry, and this series of investments in Japanese game companies is likely a way for them to learn from Japan.” Furthermore, the Nintendo investment is also beneficial for Saudi Arabia as Nintendo, a top-three video game company, stock values are currently down 14% from last year due to a semiconductor shortage, which has also had an effect on Nintendo sales. So by buying now, Saudi Arabia most likely expects a significant profit once Nintendo prices rebound when pandemic shortages and disruptions to production end in the, hopefully, next few years.