Saudi Arabia Reduces Stake in Nintendo - News
by William D'Angelo , posted on 02 December 2024 / 2,796 Views
Saudi Arabia's Public Investment Fund (PIF) has reduced its stake in Nintendo, according to a Japanese regulatory filing on Tuesday reported by CNBC.
Savvy Games, the investment group founded by PIF, cut its stake in Nintendo from 8.58 percent to 7.54 percent.
The reduction follows reports that Savvy Games was considering increasing its stake in Nintendo as Kyodo News had quoted the vice chair of the group Prince Faisal bin Bandar bin Sultan Al-Saud saying they were interested in investing more in Nintendo.
However, it was later found out the quotes were inaccurate as Savvy Games was interested in investing more in "Japanese gaming companies" in general rather than Nintendo specifically.
Saudi Arabia's PIF has been investing in multiple video game companies from around the world. This includes Nintendo, Capcom, Nexon, Electronic Arts, and Take-Two.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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Good.
So they want to do more game-washing of Prince Bonesaw’s regime.
Did you see that ridiculous Qiddiya project they just announced?
The only thing I know about the project is that they have a Dragon Ball theme park in the works. So that's apparently going to be a thing.
Check out the CG trailer they commissioned on YouTube. It's...a lot.
Captainexplosion became slightly happier
I am, but I'm not sure why they sold some of their stake in Nintendo.
looks like they pulled a little cash in, thats all
Ok, but why?
The Sovereign Wealth Fund exists only to increase it's value. Nothing else.
Nintendo will be launching a new system soon. That will likely be followed by a drop in value as investors step back to wait and see how it goes. The money will be redirected either to development projects within the Kingdom or investments with more guaranteed returns.
That's how the fund works. It's not a political tool but a method to raise money to sustain Saudi Arabia as a nation, specifically their massive subsidies and welfare state that basically work as the glue that holds the nation together.
And without depending so much on oil, right?
Yep. Basically. Their oil money is what holds the Kingdom together. Don't think of Saudi Arabia as a monolith, it's a patchwork of groups and factions who don't necessarily like each other. The oil money is what keeps it stable. With oil revenue expected to enter an ongoing decline in the decades to come, the Saudis are looking for alternative revenue streams. That's why, unlike China, they don't use their investments for political leverage much. They just need the fund to keep growing in value. There is a political dimension, of course, to WHAT the invest in. They want to present a good image internationally. But that's all in service of growing the fund.
Well treating women and non-Muslims better would be a better way to improve their image than just divesting from oil.
Agreed, but that goes back to what I said about factions that don't like each other.
Let me preface this by saying this isn't a defense of Saudi Arabia. They're a medieval-style oppressive Kingdom clinging to outdated and brutal practices that should have died out in such a developed nation many, many years ago.
Really, really short version is this. Over 200 years ago, the House of Saud formed an alliance with the Islamist Wahhabists, one of the most hardline traditional Islamist groups out there. This was instrumental in forming the Kingdom and has been instrumental in maintaining their power.
In order to keep this critical group satisfied and on side, the Kingdom enacts strict laws based on Wahhabist ideas. Of course, most people aren't very pleased living under this yoke, which presents a problem. And of course, it's also a problem to have this one group have so much leverage so the balancing act goes something like this:
To keep the Wahhabists happy, they pass strict laws. To keep their people placated, the enact massive subsidies and welfare. To balance the Wahhabists' influence, they court alliances with Western powers based on their influence on oil markets.
The key to all this is the oil money. While the Saudis have pushed the Wahhabists out of official influence (in favor of general Nationalism and a more Singapore-esque direction), the traditionalists and Wahhabist adherents still hold considerable sway. So if the oil money goes away, they can't placate the people and they can't maintain their security arrangements with the West, giving the Wahhabists even more sway than they had before.
So that's the cliffnotes for why they are A) Trying to build up this fund and B) trying to pressure the US into giving them an ironclad security guarantee like Japan, SK, and Israel and C) why they're trying to build new smart cities and megaprojects and attract literally any investments they can to transition from a resource extraction economy to an advanced economy. Cause if they lose that oil money without a replacement for the revenues and security it brings, the whole Kingdom could tear itself apart in a very short span.
So when observing the behavior of Saudi Arabia, keep this little internal political dance in mind and a lot of their behavior starts to make a lot more sense.
I didn't even know they invested.
Is there not different types of stakes? I swear Saudi Arabia had zero say on game matters or whatnot.
They owned over 8% of Nintendo (over 2x as much as the next largest Investor, Vangard) and you think they had "Zero Say" ?
He was asking for a reason. Some of you have terrible convo etiquette
They probably didn't care what games Nintendo was developing... but they definitely had "a say" and pull, regardless if they used it or not.
Look, I thought they would make Nintendo games worse, but their stake in Nintendo hasn't made a difference. They own even more of a stake in SNK, but that didn't lead to censoring Mai Shiranui, she's still showing off her bubble butt.
No, probably not, at least not directly. We tend to say shareholders own a company, but that's not really accurate. It would be more accurate to say they own a stake in the profits of a company.
Shareholders generally do not have much say over the day to day operations of a company. I do not believe Nintendo is required or routinely tells general shareholders anything more than the public.
If Saudi Arabia didn't like something Nintendo publicly announced they could like... ask Nintendo to change it, but Nintendo would probably ignore them. Saudi Arabia could then try to vote out the board of directors and vote in people that would be more receptive to their ideas, but with an 8% stake they would have to have a reason that most people cared about, not just because it doesn't align with Saudi values.
And, generally, we wouldn't even consider them a large shareholder. There are special rules, at least in US tax law which I know a bit about, that kick in for large shareholders, and those typically kick in at 10%. Even if they are larger than other shareholders it's still not really a big enough stake for them to throw their weight around.
It's a bit of an oversimplification to say they had zero say on game matters, but for most purposes, it's probably accurate.
Well it wouldn't help their investment in Nintendo if they had certain things censored.
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