Business Savvy – Brian Ward on what Savvy is currently up to in the games and esports industries, and why

Brian Ward, CEO of Savvy Games Group, tells Vince Pavey about its mission to drive the growth and development of the games industry in Saudi Arabia and beyond.

The Savvy Games Group is a holding company owned by the Public Investment Fund, a controversial sovereign wealth fund on a mission to grow Saudi Arabia’s national economy under the current rulership of Crown Prince Mohammed bin Salman. It does so through capital investment in several lucrative industries, including technology, communications and entertainment. At the time of writing, the Savvy Games Group is made up of five companies, the ESL FACEIT Group, Nine66, VOV, Savvy Games Studios and the Savvy Games Fund, each with its own aims and objectives that cover a different aspect of the video game business. Its CEO is Brian Ward, a well-known figure of the video game industry, who has spent time in leadership positions at huge companies like Electronic Arts, Microsoft and Activision within his lengthy and ongoing career. He’s taken the time to meet with me in London to explain exactly what the holding company is currently up to in the games and esports industries, and why.

You’ve held a number of high profile roles in gaming. What attracted you to this one?

First of all, the scale and scope of the ambition. Trying to do all of these things that we’re meant to do in the portfolio companies and operating companies, all at the same time. Nobody’s really tried to do that in our industry. Secondly, there’s a lot of capital committed to the exercise, which I thought was interesting at the time. Not just capital, but commitment long term. Not just like ‘we’re gonna try this for 18 months’. That’s what got me interested. This is different from Tencent, different from everybody else. What got me to take the job was going to Riyadh and seeing the transformation for myself. How it’s modernising. I thought, ‘Okay, this is a real thing’.

It’s quite a unique opportunity. That’s what attracted me and attracted most of the other westerners. Once you go to Riyadh, you see it for yourself. This is a national strategy. They’re on a bullet train to the future, like China 30 years ago in terms of pace of change. Now I want to help build a great company, hopefully do some good for the industry, and help some people transform their country. That opportunity doesn’t come around very often. That’s what a lot of people are responding to.

You spent $1 billion on the ESL in 2022. What exactly did it get you? What was the motivation behind that?

In the strategy that we started with, there was a heavy emphasis on esports, AAA, PC and console games. Coming out of COVID-19, a lot of what we would have expected to develop over five years was accelerated. I think society generally felt like it was at an inflection point with esports and like it was going to go beyond what it had traditionally been. Monetisation was not enormous yet in the space, but we decided to try to accelerate some of that consolidation that we felt was going to be inevitable and try to establish a leadership position.

When you say consolidation, who do you think are the primary rivals to the ESL that are consolidating in a similar way?

I don’t think there’s anybody really consolidating yet, but I think there are a lot of technology companies and developers with interesting offerings that will get acquired by other bigger publishers, while some publishers will also figure out in what direction their esports strategy goes. So there was an opportunity to try to put a stake in the ground, and try and improve the product portfolio of ESL, by combining to put in the capital to improve the live experience and the broadcast experience and then hopefully improve monetisation there. We hope to possibly leapfrog some of the other people who have a more short term view.

You’ve said you want to invest $30 billion over the next five years. In what countries, and in what activities?

Worldwide. The fund has made direct investments into publishers, developers, and tech companies adjacent to our spaces. Minority investments and majority. Secondly, the fund will make –and has made – indirect investments in partnership with VCs and private equity firms and figured out some intelligent and direct investments together. There’s also the publisher investments that the PIF made itself, both before and after Savvy was established. Those will fold into the fund sometime over the next few months and we’ll be trying to operationalise those in a more substantive way, to see what we can do together supporting their esports ambitions. Maybe to expand into our market, or whatever.

When the PIF acquired Newcastle football club, there was some protest from the Premier League community, which said it sort of damaged the brand. What would you say to people that have concerns?

Well, frankly, there haven’t been that many concerns about the acquisition of ESL and FACEIT. We were trying to be very transparent and very forthright on how we intend to operate as a games company, in accordance with the values and culture of our industry. We intend to be an excellent games company. Of course, there will be detractors, on this issue, that issue, or some other issue. As I said earlier, the transformation in the country is astonishing. On the face of it, from a western point of view. I say ‘buy a ticket, get on a plane, talk to the people and come see for yourself’. It’s astonishing.

ESL has worked with Blizzard, Riot, Activision and other big players in this industry in the past. How have those companies responded to the acquisition so far?

Super good, actually. ESL has been able to drive longer term publisher partnerships with longer term more lucrative sponsored partnerships off the back of our investment, not because of our investment, but I think our investment is a signal to some of those partners that maybe the esports sector is starting to solidify.

So you probably know that a lot of those advertiser and sponsor relationships, even some of the publisher relationships, are very short term in nature. One or two years. To me that’s an indicator of sort of a lack of faith and commitment into how viable this is longer term, and now we’re starting to see three, four, five year sponsorship deals, with much larger sums. I think people are starting to get a sense of comfort around the space in general.

During the pandemic there was a shift to a lot more people watching esports, because people couldn’t play other sports for ages. How did those relationships go forward when those sports started to come back on?

I don’t recall the numbers off the top of my head, but I think the basic numbers for this year were only affected negatively to a certain extent by the troubling situation in Ukraine with Russia.

How do you make viewership numbers get into that wider audience, where you want to be? They might not even know what Twitch is. How do you bridge that gap?

With a couple of things. One is improving the overall user experience in terms of viewership, both in broadcasting and live events. If we can bring that up to an Olympics, World Cup, F1 type level, it’ll be an amazing thing to watch. I also think the sector, understandably, was developed focused on games and esports enthusiasts. What we need to do is begin to broaden the appeal to a broader audience. If you take, for example, what Liberty Media has managed to do with F1 through that show Drive to Survive. I mean, people who don’t know the front end of the car from the back end of a car are now excited about F1. It appeals to people who are not already car enthusiasts. I think as a sector, that’s what we need to do. Find ways to appeal to people who might not just be a CSGO fan or a DOTA fan or whatever.

What was the thought process behind buying smaller stakes in established companies like Nintendo, EA, Activision and the like?

Those were all PIF investments, to be clear. They were made purely for financial reasons. But those are all really good. Those are all investments that we think in Savvy, we can begin to operationalise and use. Hopefully that gives us a stronger relationship or an avenue for enhancing the relationship. We’ve already begun some of those discussions.

As someone who spent many years at Activision, what are your thoughts on the current situation with the company and unionization?

I’ve been so out of it for so long. I think the company has changed a lot. I’m very interested in the potential acquisition by Microsoft. They continue to do an amazing job and Call of Duty is just beyond expectations. I give them full credit, actually.

Activision has said that one of their main reasons behind accepting Microsoft’s acquisition offer is that they think they’ll struggle to compete as companies like Embracer, Savvy and Tencent get bigger. What are your thoughts on the direction the industry is headed and things increasingly consolidate?

I think we are entering a new phase of consolidation, but I think the underlying, interesting part of the last ten years, is just how many more new sources of financing and capital have become available to smaller publishers and developers, whereas in the early 2000s, there was no VC money, essentially. You were pulled into a big publisher, if you wanted to scale it. Now, there’s all sorts of different options.

How many staff members are currently operating across the whole Savvy Games Group?

Probably about 1100.

What do you think of as the near term goals? What are the current targets?

Our overall horizon is much longer than most people. We’re thinking seven to ten years, or ten years plus. With ESL and FACEIT we’re focused on improving the end user experience across product lines. We’re focused on making investments and growing our geographic footprint to give us greater strength in regions that ESL has not historically been a player in. Growing and increasing our audience reach and making investments on the technology side of the business that enhance the online experience.

On the game studio side, we’re building up the team, and probably another hundred people will be hired in the next twelve months. We’re building a mobile casual focused team and a console, cross-platform focused team. On the Nine66 side, they’ve got probably five or six different business lines that are designed to collectively build up the ecosystem in Saudi Arabia in terms of providing the right infrastructure for local companies and local entrepreneurs and people who want to have a career in our industry, as well as the right tools, the right programmes, and support and so on. That’s as well as making sure that what’s on offer from the kingdom can attract foreign developers and talent when setting up a studio, or setting up a QA facility. We want to compete. With the fund, we want to be more strategic with our deal pipeline in the next twelve months and have a more fleshed out investment strategy. So that’s a whole bucket of things.

So when it comes to game development, are you focused on new IP, or are you looking for opportunities where you can take a licensed IP and use that to reach a larger audience?

I think it’s more about looking for great studios and publishers and their capabilities. So, not specifically assembling a portfolio of IP, although that’s an interesting concept.

What would you say makes a studio a good fit for what you’re looking for?

The usual metrics by which you measure a studio’s success: A team that’s been working together for some number of years, with more than one successful product. If they’ve got some cross-platform technology, if they’ve got a great financial outlook, personnel performance, management systems and so on. All the usual studio metrics.

I think there are studios with high potential, but they’ve got a need for a long term strategic capital partner to help fuel that growth. You can think of small ones, and you could think of even larger ones who have been capital constrained or had some other reason why they haven’t been able to maximise their potential. That’s right up our alley. We want to help people realise their full potential and achieve their future goals.

There’s been a lot of industry investment activity in Japan. As an example, Tencent hired the founder of RGG Studio and were like ‘Make a new studio for us!’ — Is there any ambition to do things like that at Savvy?

I think in all regions, but sure. There was an underweighting in the initial strategy around Asia. You can’t build a global games company and be one of the top ones if you’re not focused on Asia and China. I think some of the Chinese companies are focusing on increasing their international revenues which is logical given the circumstances.

Ireland announced a tax incentive to try to encourage developers to go there. Have you looked at something like that for Savvy?

When I was at Activision that was part of my remit. Being on task forces worldwide to lobby for industry tax credits in several jurisdictions. I’m from Canada, where that’s probably the gold standard. So I think those programmes are super well thought out. Most of them are well thought out, and well implemented. I think there should be more of them generally speaking, and we’re trying to figure out programmes and tax incentives that are generally attractive for people.

When you think about it, Saudi Arabia is doing exactly what Canadian jurisdictions were intending to do with their programmes 25 years ago, which is to diversify away from having a natural resources and manufacturing base in Canada’s case, to something more forward looking in technology and digital media. That’s exactly what the national strategy in Saudi Arabia is doing, going away from oil and gas into 13 other sectors.

The beauty of these incentives in video games is unlike film, they create a lot of permanent jobs. This is what we had to convince jurisdictions of back when they were making these proposals. It was like ‘Okay. You’ve offered some incentives for years and years, but those jobs are not permanent jobs. If a video game studio comes in and establishes, then those are permanent jobs. That studio isn’t going anywhere if it’s successful.’ You can establish a hub, like in say, Guildford, which is what we’re trying to do in Riyadh.

Also the tax incentives help, but they’re not the full answer. When you’re starting from scratch, there are so many components. You have to work with universities and educational institutions to train up a number of people. In Quebec, as an example, there are 20 universities and community colleges and amazing STEM programmes related to digital media. That’s a long term thing. Nobody’s going to graduate from a Riyadh university with a degree in game design next week. You have to work on that.

You have to provide the programmes that provide financial support, and operational support for entrepreneurs who want to start a company and not just programmes that have a short time limit. Ones that are sustainable. You also have to provide the right incentives for foreign companies to come in, because without leadership and experience, people can’t really train up locally. That’s what Ubisoft does so well. Take your teams and then they go to a different place, and they hire a bunch of people. There are so many different things you have to touch on in order to do it from the ground up.