The fans flooded through the streets of Riyadh, Saudi Arabia, by the thousands, kept cool by mist machines in the 43°C heat. A 30-foot-tall replica gold trophy towered over onlookers at the city’s centre. For a moment, covered in beams of brightly coloured light, a country defined by tradition looked futuristic.

It was the inaugural Esports World Cup. As part of its plan to diversify its economy from oil, the Saudi government has said it will invest $38 billion in video games by 2030 through its Public Investment Fund or PIF, a wealth fund that manages $700 billion.

The wealth behind that commitment was on full display in Riyadh, the Saudi capital, recently, but the country’s influence in video games now extends far beyond its borders. In what has been a financially difficult year for the industry, which has seen mass layoffs, many of the world’s largest video game companies and influencers have quietly partnered with the oil-rich Saudis.

Through acquisitions, a company funded by the PIF called Savvy Games Group now owns 40 per cent of the total esports market share. The PIF and its subsidiaries have spent roughly $6 billion buying game companies and $14 billion on stock investments. “They’ve used unlimited resources to pretty much make whatever they want to happen, happen,” said Rod Breslau, a gaming and esports analyst.

Some critics have labelled the investments “games washing”, an attempt to polish the country’s reputation and human rights abuses with entertainment and tourism, as it has been accused of doing with its professional golf and soccer leagues. Some gamers have denounced the country’s involvement and vowed to boycott its events. And it can be jarring for visitors to see women — some of them in elaborate costumes — working at a conference in a country where women’s rights have historically been, and continue to be, very restricted.

But as Saudi money becomes ubiquitous in the esports world, avoiding it has become difficult.

“We’ve gotten to the point where if you draw the line and say, ‘I’m not working for a Saudi-owned company’ or ‘I’m not going to Saudi Arabia,’ your career in esports would probably be shortlived,” said Parker Mackay, an esports broadcaster who resigned from his position on an awards panel after it partnered with a Saudi-funded organisation.

Along with buying up game publishers and hosting extravagant esports tournaments, the Saudi kingdom is building a gaming city with its own esports district 30 miles west of Riyadh called Qiddiya. Its companies have partnered with video game giants such as Sony and Activision Blizzard, which is owned by Microsoft, and media companies too.

Leaders of Saudi gaming organisations have pushed back on criticism of the kingdom’s financial interest in gaming.

“Three years ago, I would have had my own prejudices, thinking about what Saudi is and what it is not,” said Ralf Reichert, CEO of the Esports World Cup Foundation. “Ultimately, everyone needs to judge it on their own, and I just invite people to come and see it.”

Once a country that effectively banned movie theaters and strictly restricted tourism, Saudi Arabia has poured wealth into sports and entertainment at a staggering rate. Notably, the 38-year-old Crown Prince Mohammed bin Salman is an avid gamer.

The PIF is heavily invested in publicly traded video game companies. In Riyadh at the Esports World Cup, gamers competed for a share of a $60 million prize pool, the largest for an event of its kind.

The tournament is meant to be “a lighthouse in the world sports calendar”, Rei-
chert said. The eight-week event was organised by the Esports World Cup Foundation, a Saudi nonprofit.

The foundation has leaned on big-name partnerships to spread its influence.

Some esports teams are trying to make a social statement while still accepting Saudi cash. Team Liquid, an esports team known for promoting diversity and inclusion in the sport, wore jerseys with a Pride logo during competition. Its leaders had mulled over what it meant to play in Riyadh in the weeks leading up to the tournament.

Some influencers tried to justify their participation to their fans on social media. Joshua Howard, a sportscaster for the tournament, said his 10-day contract with the Esports World Cup will account for 20-30 per cent of his annual earnings.

He said, “When you see an opportunity come along that way, it’s really hard to say no, and I don’t begrudge anyone for saying no or being upset that I’m here.”