Competition
Esports Monopoly Threat: How Saudi PIF’s Vertical Integration Enables Abuse of Dominance
Table of Contents
Is Saudi Arabia trying to become a monopoly in the Esports industry?
Saudi Arabia has been heavily involved in the Esports industry in the last few years. In fact, Prof Simon Chadwick stated that:
“Saudi Arabia is one of the very few countries in the world that has an official government policy aimed at building its Esports economy”.1
In its efforts to gain influence, the Kingdom invested over USD 38 Billion in the Esports industry.
The country acquired stake at industry-leading companies such as Nintendo (video game console and game manufacturer with franchises like Mario, Zelda and Pokémon), Take-Two Interactive (publisher of titles like NBA 2K and Grand Theft Auto), Activision Blizzard (publisher of titles like Call of Duty and Overwatch), and most recently and crucially, fully acquired, together with two other investors, Electronic Arts (EA), one of the most important companies in the Esports industry being a dominant publisher of major, established franchises like The Sims, the FC Series (formerly FIFA), and the Madden series. Saudi’s PIF will be the majority owner of EA once the transaction is finalised.
Furthermore, Saudi Arabia has already been heavily involved in organising Esports tournaments, acquiring Evolution Championship Series (EVO), the fighting games’ biggest tournament,2 and crucially the ESL FACEIT Group, one of the leading Esports tournament organisers for popular games like Counter-Strike and Dota 2.3 Moreover, the Kingdom is responsible for organising the Esports World Cup, the largest tournament in Esports history with the largest ever prize pool of USD 70 Million.4
Saudi Arabia’s large involvement in the Esports industry has been criticised for multiple things in the past few years, most commonly for ‘gamewashing’.5 This term comes from a similar criticism of Saudi Arabia’s involvement in the sports industry, namely ‘sportswashing’: sponsoring and hosting sporting events to promote a positive public image and distract attention from human rights issues.6 However, something that has not been discussed too often with regards to the Kingdom’s pursuit of influence in the Esports industry are the competition law implications.
Dominant position
To explain the concept of a dominant position and its abuse, I will dissect Saudi Arabia’s involvement in competition law through an EU competition law perspective. Hence, while the Kingdom’s involvement in Esports has a multi-jurisdictional impact, I will be using EU law as a pedagogical tool. Other jurisdictions Saudi Arabia operates in have similar prohibitions, such as the US’ prohibition of monopolisation (section 2 of the Sherman Act), or Saudi Arabia’s own abuse of dominance prohibition (article 6 of the Competition Law).
In EU competition law, Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits abuse by one or more undertakings of a dominant position. There are thus three important elements to analyse here: 1) is Saudi Arabia an undertaking? 2) do they have a dominant position? 3) are they abusing their dominant position?
Are They an ‘Undertaking’?
An undertaking was defined by the Court of Justice in Höfner and Elser v Macrotron GmbH as “…every entity engaged in an economic activity regardless of the legal status of the entity and the way in which it is financed”.7 An ‘economic activity’ was defined in the Lithuanian Chamber of Notaries case as “…any activity consisting in offering goods or services on a given market…”.8
Saudi Arabia’ Public Investment Fund (PIF) and its subsidiaries like Savvy Games Group (SGG) fall under the ‘undertaking’ definition, as they engage in economic activity by offering goods or services in a market (publishing games, organising tournaments, etc.) This distinction is crucial, as competition law targets the functional economic entity, not the sovereign state itself. The qualification that the entity falls within this definition ‘regardless of the way in which it is financed’ is critical as it ensures that state-controlled entities like the PIF are included, thereby making Saudi Arabia the ultimate owner and party subject to scrutiny.
For the purposes of this legal analysis, we will, therefore, scrutinize Saudi Arabia itself for the potential abuse of a dominant position. This approach ensures that the legal and potentially anti-competitive conduct of the economic entities (SGG, PIF) is directly attributed to the ultimate controlling and benefiting party, the Kingdom. Thus, when analysing Saudi Arabia’s dominant position in the relevant market (below), we will talk about the markets they are in and the position they have through their economic entities.
Do They Hold a ‘Dominant Position’?
To analyse whether an undertaking holds a dominant position, the Court of Justice in United Brands v Commission laid out a test, namely that the undertaking enjoys a position of economic strength which “enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitions, customers and ultimately of its consumers”.9 We see a new concept in the court’s definition: ‘relevant market’. This concept is usually made up of a relevant product and geographic market.
There are multiple ways of analysing Saudi Arabia’s relevant market in the Esports industry, but it would require very thorough and detailed analysis. Generally, defining the relevant market in the gaming and Esports industry is extremely difficult, for example in the case of Microsoft/Activision Blizzard, the Competition & Markets Authority (CMA) issued a report explaining they are unable to precisely define the relevant market due to the complexity and dynamism of the gaming market.10
Drawing on the CMA’s report, I would argue Saudi Arabia’s involvement in the Esports industry could fall into two relevant markets. Firstly, The Supply of Game Publishing Services would be a relevant market Saudi Arabia arguably has a dominant position in on a global level, owning large stakes in major global publishers such as EA, Nintendo, Take-Two Interactive, and more.
Secondly, and an even stronger case for a dominant position is in the Market for the Organisation and Operation of Esports Events and Competitions. I argue this is a unique relevant market, generating enormous amounts of money from sponsorships, viewerships, merchandise sales, etc. Saudi Arabia organises some of the biggest Esports tournaments in the world, including the Esports World Cup (the most lucrative Esports competition in the world),11 and the EVO.
In their tournaments and as part of their holdings, Saudi Arabia features all the titles and games with the biggest viewerships and prize pools by far, from League of Legends, Dota 2, Fortnite, Counter-Strike, etc.12
Thus, when conducting a thorough competition law analysis, it would be unsurprising if Saudi Arabia would be found to have a dominant position in these relevant markets i.e. are able to behave independently of their competitors, customers and consumers. Saudi Arabia can arguably act independently from their Esports competitors since they own a large portion of the tournament infrastructure (essential facilities) and industry-leading game titles.
They are able to behave independently from customers (e.g. Esports teams) because, by owning the most important tournaments with the largest prize pools, they can act unilaterally knowing teams will nevertheless comply. Lastly, owning some of the most popular titles and tournaments, they can act independently from consumers knowing that they are likely to still be loyal to their favorite game.
Abuse of Dominant Position
Nevertheless, a dominant position is not necessarily anti-competitive. For a dominant position to be anti-competitive, it must be abused. There are two types of abuses of dominant position: exploitative and exclusionary.
Exploitative abuse concerns the dominant undertaking using their position to impose unfair conditions on consumers, most commonly unfair prices.13 Often, companies commit exploitative abuse by excessive pricing (setting higher than standard prices). I believe Saudi Arabia’s dominance leaves a lot of room for this type of abuse to arise.
Saudi Arabia’s control of the major Esports tournaments means they could charge excessive ticket prices, high broadcast rights fees, or excessive merchandise fees in relation to their tournaments like the Esports World Cup. Moreover, through owning leading game publishers such as EA, they could impose excessive prices for the games themselves or in-game content, leaving loyal consumers with the tough choice to either pay the cost or abandon their loved games.
Exclusionary abuse entails the dominant undertaking undermining the ability of rival companies to compete by preventing access to or pushing them out of the market.14 The main forms of exclusionary abuse that Saudi Arabia can possibly breach are predatory pricing (setting prices below market levels) and margin squeeze (a vertically integrated undertaking sets the prices of upstream input goods at levels which do not allow competitors to cover their costs).15
Saudi Arabia could use their sovereign wealth and leverage to over-fund prize pools for events like the Esports World Cup which would make it nearly impossible for independent tournament organisers to compete with, hence engaging in predatory pricing.
Whilst not necessarily setting prices below standard level as is common with predatory pricing, the immense prize pool still operates on the idea of taking on a massive financial burden to drive competition out the market. Another possibility (though less likely) is for Saudi-owned games to be priced very low in order to drive competing games out the market, however given that games like FC, Madden, etc. do not have many competitors, it seems less likely.16
As for margin squeeze, Saudi Arabia owns both the upstream input (the rights to major Esports games such as FC, Apex Legends, etc.) and the downstream product (industry-leading tournaments). If Saudi Arabia decides to charge rival tournament organisers a very high price for a game license, for example for the right to have an Apex Legends tournament, in addition to Saudi Arabia offering tournaments like the Esports World Cup with conditions (such as the prize pool) which the competitor cannot match, they will be committing margin squeeze and hence exclusionary abuse.
Takeaways: Moving Towards a Monopoly?
This article, of course, explores mere hypotheticals regarding Saudi Arabia’s involvement in the Esports industry and the potential competition law risks it involves. Whether or not Saudi Arabia has a genuine dominant position requires a much more thorough relevant market and economic analysis. However, the recent trend of Saudi Arabia acquiring industry leaders such as EA, setting up tournaments with revolutionising prize pools, raises some competition law alarm bells.
As mentioned previously, even if Saudi Arabia indeed holds a dominant position in any relevant market in the Esports industry, it will not necessarily violate competition law, as long as it does not abuse that dominant position.
There is still a long way to go until we can worry about Saudi Arabia becoming a monopoly in the Esports industry. The acquistions they are making and the projects they are undertaking are significant, but other companies still exist in who hold a large portion of the market share.
Nevertheless, given the large financial potential the Esports industry has, the loyalty of consumers to their favorite games, on top of the current oligopolistic nature of the industry, with only few massive game developers and tournament organisers, surrounded by numerous small, independent players,17 I would advise Saudi Arabia to be cautious with how they use the power they are acquiring, working towards furthering the industry rather than potentially abusing it.
Moreover, I would advise competition authorities to start scrutinising the Esports industry a bit closer, as it is currently in a very vulnerable position, with a lot of economic and political discourse surrounding it.
Esports Monopoly Threat: How Saudi PIF’s Vertical Integration Shapes Competitive Power
Image generated by ChatGPT
- Nesta McGregor, ‘From real sport to esports – why Saudi Arabia spent $55bn on EA’ (BBC Sport, 1 October 2025) https://www.bbc.co.uk/sport/football/articles/c0jq24yy4z9o accessed 13 November 2025.
↩︎ - Connor Makar, ‘The Saudi Arabian takeover of fighting games’ biggest tournament means players – and the wider community – have a choice to make: between its culture and a payout’ (Eurogamer, 8 September 2025) https://www.eurogamer.net/the-saudi-arabian-takeover-of-fighting-games-biggest-tournament-means-players-and-the-wider-community-have-a-choice-to-make-between-its-culture-and-a-payout accessed 11 November 2025.
↩︎ - Tyler Wilde, ‘Major esports host ESL Gaming is now owned by Saudi Arabia’ (PC Gamer, 24 January 2022) https://www.pcgamer.com/esl-and-dreamhack-are-now-owned-by-saudi-arabia/ accessed 13 November 2025.
↩︎ - Beth Knox, ‘Saudi Arabia: The Rising Esports Capital of the World’ (TNT Sports, 10 August 2025) https://www.tntsports.co.uk/e-sports/saudi-arabia-the-rising-esports-capital-of-the-world_sto23210033/story.shtml accessed 12 November 2025.
↩︎ - Jacqueline Burgess, ‘What Saudi Arabia’s role in the Electronic Arts buyout tells us about image, power and game-washing’ (The Conversation, 1 October 2025) https://theconversation.com/what-saudi-arabias-role-in-the-electronic-arts-buyout-tells-us-about-image-power-and-game-washing-266359 accessed 11 November 2025.
↩︎ - BBC Sport (n 1).
↩︎ - Case C-41/90 Klaus Höfner and Fritz Elser v Macrotron GmbH [1991] ECR I-01979, para 21.
↩︎ - Opinion of AG Pitruzzella in Case C-128/21 Lietuvos notarų rūmai and Others v Lietuvos Respublikos konkurencijos taryba ECLI:EU:C:2023:16, para 95.
↩︎ - Case 27/76 United Brands Company v Commission [1978] ECR 207, para 65.
↩︎ - Competition & Markets Authority, Anticipated acquisition by Microsoft of Activision Blizzard, Inc. Final report (26 April 2023) https://assets.publishing.service.gov.uk/media/644939aa529eda000c3b0525/Microsoft_Activision_Final_Report_.pdf accessed 11 November 2025.
↩︎ - Callum McCarthy, ‘Explained: The Saudi-backed non-profit ‘orchestrating’ esports’ (SportBusiness, 14 April 2025]) https://www.sportbusiness.com/2025/04/explained-the-strategy-behind-esports-20m-stimulus-fund/ accessed 12 November 2025.
↩︎ - Robert A. Lee, ‘Esports Statistics 2025: Market Growth, Viewership, and Trends’ (SQ Magazine, 1 October 2025) https://sqmagazine.co.uk/esports-statistics-2/ accessed 13 November 2025.
↩︎ - Willkie Farr & Gallagher LLP, ‘Types of Abuse’ (Willkie Compliance Concourse 2025) https://complianceconcourse.willkie.com/resources/antitrust-and-merger-control-eu-types-of-abuse/ accessed 11 November 2025.
↩︎ - ibid.
↩︎ - ibid.
↩︎ - Rich Grisham, ‘Will Madden ever have competition?’ (Sporting News, 12 November 2021) https://www.sportingnews.com/us/nfl/news/madden-nfl-16-ea-ssports-competition-nfl-2k-take-two-sports-video-games/w5q934xma88113pdihykd5ael accessed 12 November 2025.
↩︎ - Pierre-Jean Benghozi, ‘Esports: Everything You Need to Know About This Exploding Digital Market’ (Polytechnique Insights, 1 October 2025) https://www.polytechnique-insights.com/en/columns/digital/esports-everything-you-need-to-know-about-this-exploding-digital-market/ accessed 11 November 2025.
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