SAUDI Arabia’s Public Investment Fund (PIF) became the largest outside shareholder of Nintendo on Friday (Feb 17), underlining its commitment to diversifying a heavily oil-dependent economy.

According to the fund’s latest filing, it now owns 8.3 per cent of the Kyoto-based company, building up a position that stood at just above 6 per cent at the start of the year. This puts the PIF ahead of Japan’s Government Pension Investment Fund and behind only Nintendo’s own holding.

Under the leadership of Crown Prince Mohammed bin Salman, Saudi Arabia has been making a concerted push to break into the games and e-sports industry. Most notably, it set up Savvy Games Group under the PIF umbrella with a US$38 billion budget and industry veterans in charge. This week, Savvy revealed its first foray into China’s games sector with a US$260 million investment in a competitive gaming organiser backed by Tencent Holdings.

The PIF said in its filing that the latest Nintendo stake purchase was made for investment purposes. A Nintendo representative said the company would not comment on specific shareholders. PIF did not immediately respond to a request for comment.

Consultant Akira Takatoriya said: “The Nintendo purchase, as well as investments in game companies around the world, is part of Saudi Arabia’s long-term project to become less reliant on oil.” Takatoriya works with Japanese companies exporting pop culture content to the Middle East.

PIF’s first investment in Nintendo, in May 2022, marked its third investment in a Japanese games company last year, following share purchases in Nexon and Camcom in the months before. Data compiled by Bloomberg showed the fund’s portfolio also included Activision Blizzard, Electronic Arts, Take-Two Interactive Software and Koei Tecmo Holding.

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Tokyo-based industry consultant Serkan Toto said: “I think PIF is not even done, and wouldn’t be surprised if it continues to increase its stake in Nintendo going forward.” BLOOMBERG