Saudi Wealth Fund Boosts Gaming Bets With Capcom, Nexon Stakes

(Bloomberg) -- Saudi Arabia's sovereign wealth fund deepened its bet on video games, fresh from a face-saving deal that turned around its investment in Activision Blizzard Inc.

The Public Investment Fund disclosed stakes of more than 5% in two Japan-listed gaming firms: Capcom Co., the maker of the Street Fighter and Resident Evil franchises, and online games provider Nexon Co. Its combined holdings in the two firms are worth more than $1 billion.

The PIF, as the $500 billion fund is known, has been building up stakes in video game makers and e-sports over the past two years. Its purchase of about 37.9 million shares in Activision Blizzard Inc., which it began acquiring in late 2020, was losing money until Microsoft Corp. agreed to buy out the studio behind the Call of Duty series.

Japan's gaming companies have been the subject of speculation amid a broader wave of consolidation in the videogames industry, ever since Microsoft announced the $69 billion Activision purchase last month. Sony Group Corp. is also buying Bungie Inc., the U.S. video game developer behind the popular Destiny and Halo franchises, for $3.6 billion.

Read more: The Great Gaming Content War May Hit Japan Next

Shares in Osaka-based Capcom, which also counts Monster Hunter among its hit franchises, rose as much as 1.7% after the disclosure on Friday, even as the benchmark Topix index dropped 0.2%. PIF's stake in Capcom is worth about $332 million based on Friday's share price.

The PIF also took a 5.02% stake worth about $883 million in Nexon, the company behind role-playing games like MapleStory and Dungeon&Fighter. The Tokyo-listed firm, founded by South Korean billionaire Kim Jung-ju and led by American Owen Mahoney, saw its shares rise more than 3% in Tokyo trading.

Nexon recently made a $400 million investment in AGBO, the independent film production company co-founded by “Avengers” directors Joe and Anthony Russo, while last year it bought $100 million of Bitcoin.

The PIF said the purpose for both holdings was “pure investment,” and the filings showed the latest purchases were made in the market from Jan. 25 to Jan. 31.

The Saudi fund also has stakes in Electronic Arts Inc. and Take Two Interactive Software Inc.

Chaired by Crown Prince Mohammed bin Salman, the Public Investment Fund has earmarked about $10 billion to buy global stocks based on a thematic strategy that focuses on areas including e-commerce and renewables, people familiar with the matter said last month.