Update June 14th 8:450AM: Embracer CEO Lars Wingefors has issued a statement explaining the company's rationale behind "accepting investment from an entity in a non-democratic country", as he puts it. In the statement, Wingefors acknowledges that there are "different views" on the topic of the Saudi PIF, which is backed by crown prince Mohammed bin Salman, making investments in Western companies. According to Wingefors, Embracer accepted investment from the PIF because opening its content to new markets would help to build connections with local businesses and "bring the world closer together through gaming".
Wingefors also says that without large investors like the PIF, Embracer would be unable to continue its "journey" of building a substantial and sustainable company, as he puts it. It's notable that Wingefors doesn't at any stage mention the crown prince himself, who is heavily tied up with Savvy Gaming Group, the subsidiary of the PIF that made the Embracer investment. The crown prince is either directly or indirectly responsible for many of Saudi Arabia's worst human rights abuses, so merely calling Savvy "an entity" seems to be something of an understatement. Wingefors further states that the PIF's investment won't have an effect on Embracer's strategy; he says that Savvy and the PIF invested in Embracer as a result of its corporate outlook, not in order to change it.
Original story follows below.
Original story: The Saudi Public Investment Fund has purchased a $1 billion stake in Swedish holding company Embracer Group. This investment makes the fund, which is backed by Saudi crown prince Mohammed bin Salman, Embracer Group's second-biggest investor.
What does the PIF's investment mean for Embracer Group?
Less than a month after the PIF bought enough shares to become Nintendo's fifth-largest shareholder, the Saudi fund has now invested a pretty significant amount of money in Embracer Group, too. The transaction was conducted via the PIF's subsidiary Savvy Gaming Group and gives the fund 8.1% of Embracer Group's total shares, as well as 5.4% of votes. Embracer CEO Lars Wingefors says this investment will enable Embracer to "set up a regional hub in Saudi Arabia" and look for partners and acquisitions within that region.
This is just the latest in a string of gaming investments and purchases made by the Saudi Public Investment Fund. Earlier this year, the PIF added stakes in Capcom and Nexon, and the fund also bought a controlling stake in King of Fighters developer SNK back in 2020. That's in addition to the Savvy Gaming Group's purchase of esports organizations FACEIT and ESL, which merged together under the Fund's watch in January. It's clear that bin Salman and the Fund don't plan on scaling back their gaming investments anytime soon.
What is Embracer Group?
If you haven't heard Embracer Group's name before, you'll almost certainly have heard the names of the company's subsidiaries. Back in May, for example, Embracer Group purchased Crystal Dynamics, Square Enix Montreal, and Eidos Montreal, giving it the rights to IPs like Deus Ex and Tomb Raider. Other Embracer acquisitions within the last year include the comics imprint Dark Horse, tabletop giant Asmodee, and Duke Nukem luminary 3D Realms. Its publishing subsidiaries include Koch Media, Saber Interactive, and companies like Deep Silver and THQ Nordic.
It's unlikely that the Saudi PIF's investment in Embracer Group will result in any major change of course for the company. Although Saudi Arabia is an extremely controversial country, not least due to its multiple documented human rights abuses, that isn't stopping it from investing in many Western gaming institutions, so don't be surprised if you see the PIF's name popping up again before too long. We'll bring you more on this as soon as we get it.