The CEO of Embracer Group has made a public statement after the $1 billion investment by the Saudi government backed Savvy Gaming Group, a subsidiary of the Public Investment Fund.
Lars Wingefors says that “the decision was not taken lightly” to accept the investment which gives SGG 8.1% of the company’s shares and 5.4% of the voting rights among shareholders, but also states that he remains in executive control of the company and that this does not impact on the company’s values.
Wingefors said, “Since our announcement two days ago regarding the investment by Savvy Gaming Group (SGG) I have received many questions. I would like to share some background and to provide you with a rationale for our decision. I understand and respect that there are different views on this topic. I don’t claim to have the right answers, but I want it to be clear that this decision was not taken lightly. I appreciate this opportunity to explain my view on why this investment is an important step for Embracer on our continued journey as a company.
“I want to be clear that Embracer will continue to be operated by me, our operative CEOs and management teams across the entire Group. Embracer is built on the principles of freedom, inclusion, humanity and openness. The transaction with SGG will not change this in any way.”
Saudi Arabia has funnelled its money into a large number of overseas companies, and in video games alone has picked up similar stakes in everyone from Western publishers EA, Activision Blizzard and Take-Two to Japanese publishers Capcom and Nintendo. It even holds a 96% ownership stake in fighting game developer SNK, and acquired esport companies ESL and Face It back in January.
It’s in those latter instances where Saudi Arabia could seek to exert some control, including hosting esports events in Saudi cities, featuring the branding and “sponsorship” or Saudi brands, and generally doing the video game equivalent of what’s known as sports washing – investing money to launder a poor global perception of a company. The PIF has recently bought up Newcastle FC in the English Premier League, is funding the renegade LIV Tour in golf, and fed cash into Formula 1 to get a Saudi Grand Prix and prominent marketing for the state’s oil company, Aramco.
How to be a guilt free gamer or: Why humans are just awful
Wingefors continues, “I have been asked over the past few days why we are accepting investment from an entity in a non-democratic country. To start, we need to look ourselves in the mirror, we are a public company and already have many hundreds of institutions from all parts of the world as shareholders, including investors from the Middle East and Africa (MENA) and Asia region. Many of them have participated in the capital raising during the past years. Many others have joined over the open market.’
“During the process, we have learned that the SGG parent, PIF, is one of the world’s largest investors, including sizeable ownership in many of our larger gaming peers. We genuinely believe that SGG, a fully commercial entity, has ambitions within gaming that are genuine in supporting the global ecosystem for our industry that are consistent with and important to the values and culture of our industry. SGG is providing a sizeable, truly long-term capital investment to support our strategy and our management so that we may continue the successful growth of our commercial businesses. My values as a Swedish entrepreneur are unwavering. We are a value-based company, and our commitment to a decentralised operating model that empowers great people to make their own decisions will always remain.”
Basically, everyone else is taking this questionable money, so why not us as well?
Many see this as a troubling trend, given Saudi Arabia’s dismal human rights record – this is a country where homosexuality is still criminally punished, for one thing – and recent actions such as the assassination of Jamal Khashoggi in 2018 by Saudi agents, which the CIA claim was sanctioned by Prince Mohammed bin Salman himself. Progress on expanding rights has been achingly slow, but in 2019, the ended male guardianship for women over the age of 21 and allowed women to drive for the first time.
via Eurogamer
MrYd
Is there much they could do if someone wanted to buy a billion dollars of shares in the company anyway? Comments in other places about it suggest it wasn’t just a case of buying a billion dollars worth of shares, but inventing a whole new bunch of shares and selling them for that much money.
So on the one hand, that’s clearly deliberately accepting lots of money from a very dodgy source. But on the other hand, it might stop them owning too much and having too much say in anything. Instead of owning $1bn of $Xbn, they now own $1bn out of $(X+1)bn. Which is quite a big difference in this case.