Saudi Arabia has reduced its stake in Nintendo as part of a move that is estimated to have netted it over $100 million. This turn of events came as a surprise to some industry watchers, not least because the Middle Eastern country's Public Investment Fund (PIF) was just recently said to be considering doubling down on its Nintendo investment.

The PIF first invested in the Japanese gaming giant in May 2022, when it acquired 5.01% of the company's outstanding shares. It did so via Savvy Games Group, a Riyadh-based subsidiary specializing in gaming industry forays. The Saudi Arabian entity has increased its Nintendo stake on three more occasions since then, having most recently done so in early 2023, when its share in the company reached 8.26%.

A year and a half later, the PIF subsidiary has now curtailed its bet on Nintendo, CNBC reports, citing Japanese regulatory filings. Specifically, Savvy Games lowered its share in the company to 7.54%. This reduction brings its stake in the Japanese gaming giant down to its February 2023 levels, erasing the majority of its latest investment in the company. Saudi Arabia is still among Nintendo's largest shareholders following the move.

Based on the current number of outstanding Nintendo shares, a 0.72-point reduction from 8.26% to 7.54% would mean that Savvy Games sold approximately 8,382,448 shares as part of this cut. Going by the highest price that the company paid for these equities in February 2023, its act of holding 0.72% of Nintendo stock over this 20-month period could have earned it up to $127 million. In reality, Savvy Games likely netted a bit less, because it ostensibly didn't dump all of these shares at once, which could have affected their price. Instead, the investment group most likely offloaded them gradually over a brief period.

The sale itself was far from expected, not least because it became public knowledge mere days after it was reported that Saudi Arabia was considering increasing its Nintendo investment. Specifically, Prince Faisal bin Bandar bin Sultan Al-Saud, the vice chairman of Savvy Games, told Japanese outlet Kyodo News that his company was open to raising its Nintendo stake should its partners wish to do so.

Nintendo stock rose by 4.4% on the news of Kyodo's October 7 report, then fell by 2% on the following day. The PIF's decision to reduce its investment only became public knowledge after the Tokyo Stock Exchange closed on October 8, so it's possible that the shares will resume their decline once it reopens. There are currently no indications that this move signals Saudi Arabia is reconsidering its massive commitment to gaming industry investments.

Posted: Oct 13, 2024 8:05 pm
Related Forum: Gaming Discussion

Source: https://gamerant.com/saudi-arabia-nintendo-investment-reduced-savvy-games-pif/