Saudi Arabia firm EGDC now owns 5% stake in Capcom
Saudi Arabia-based firm Electronic Gaming Development Company (EGDC) has acquired a five percent stake in Capcom.
The news, which comes from GameBiz (and translated via Automaton), details a report submitted to the Kanto Local Finance Bureau on March 13. The report discloses that EGDC now owns 26,788,500 shares—a 5.03 percent stake in Capcom, to be precise.
According to EGDC's statement, the purpose of the acquisition of shares is "pure investment," focusing on earning profits from stock price increases or dividends.
Back in 2022, Saudi Arabia's Public Investment Fund (PIF) purchased stakes of more than five percent in Capcom, as well as Nexon. As such, it now owns just over ten percent of the company's shares.
As for EDGC, the firm has sustained an interest in SNK, the company behind The King of Fighter series, over the last couple of years. In late 2020, it secured a 28.8 percent stake. This was massively increased in 2022, increasing the number to 96.18 percent. Since then, EDGC has been the parent company of SNK, owning a 100 percent stake in the developer.
Saudi Arabia's investment spree continuesIn early 2023, PIF upped its stake in major U.S. game publishers EA and Grand Theft Auto maker Take-Two Interactive. Last year, Scopely, the mobile publisher owned by Saudi state-backed investor Savvy Games Group, agreed to acquire Pokemon Go and Niantic's entire video game business for $3.5 billion.
It's worth remembering that PIF is chaired by the crown prince and deputy prime minister of Saudi Arabia, Mohammed Bin Salman, who has faced allegations relating to the assassination of The Washington Post journalist Jamal Khashoggi (those allegations were in the news again last year), the torture of human rights and women's rights activists, and the formation of an authoritarian regime that facilitates oppression.
Recently, PIF has been poised to become the majority owner of EA as part of a $55 billion take-private. If the buyout goes through, Saudi Arabia will own 93.4 percent of EA. Meanwhile, the video game company said the take-private won't result in "immediate" layoffs via a FAQ made available to all employees in September 2025.
The following month, EA employees and the video game union United Videogame Workers-CWA Local 9433 released a public statement criticizing the buyout, calling for regulatory scrutiny. In January of this year, a group of lawmakers in the United States urged the Federal Trade Commission to review the proposed acquisition. Over 40 House Democrats signed a letter calling on the commission chair Andrew Ferguson to scrutinize the take-private deal over concerns it could warp the balance of power within the video game industry.
According to a November report, PIF is reportedly running low on cash for new investments. Aside from the EA bid, the report indicates that a number of the fund's other investments are in "financial distress" and its managers are racing to reverse course.
