Dune raider: Saudi is a video-game superpower

0:00With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open seven days a week to assist with your banking needs. Yep, even on weekends, it's pretty much all he talks about. In a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank. Capital One N.A. Member FDIC.

0:32This intelligence podcast is sponsored by Backmarket, the leading global marketplace for refurbished tech. When the kids need phones, laptops, or tablets for school, buying refurbished tech makes sense for families trying to save money without sacrificing quality. At Backmarket, tech costs up to 50 % less compared to new. All devices have been professionally refurbished and come with a one-year warranty and 30-day return policy. Start saving money. Visit Backmarket.com or the Backmarket app to shop now.

1:05The Economist

1:12Hello and welcome to The Intelligence from The Economist. I'm your host, Rosie Bloor. Every weekday, we provide a fresh perspective on the events shaping your world.

1:26Given its location, it's pretty obvious why Finland has carved out a niche in designing and building icebreakers But as competition for the Arctic grows, so does demand for these ships It's no joke And in 2019, a star basketball player wrote a tweet that annoyed the Chinese Communist Party The result was that the entire league was banned from China Tonight, for the first time in six years, an NBA game is finally being played on Chinese soil again.

2:04First up, though.

2:14In 1983, a small team published a series of groundbreaking video games, including Archon, The Light and the Dark, a combat game that's a bit like chess. Over 40 years later, the computer geeks who build themselves as electronic artists are better known as the company EA. EA Sports. It's in the game. EA is one of America's largest gaming brands. But now that video game firm has been co-opted for an even bolder mission. It's part of a bid to dominate the entire gaming industry.

2:50Mohammed bin Salman:Electronic Arts, which is America's third biggest gaming company, is being bought for$55 billion in a group being led by Saudi Arabia's public investment fund. Tom Wainwright is The Economist's media editor. This is part of a multi-billion dollar push into gaming for the kingdom. That industry, the gaming industry, is now worth more than cinema, streaming or music. And Saudi Arabia is quickly becoming a big player in this new industry. Tom, what is a video game superpower? What does that look like for Saudi Arabia? Well, I think for Saudi Arabia, it really just means that they now own or have large stakes in a very large number of the kind of household names when it comes to video gaming.

3:31Mohammed bin Salman:So they own this entity called Savvy Games, which has been given a$38 billion war chest to build a gaming empire. Savvy has built a company called Scopely, which makes a mobile game called Monopoly Go. It's bought the gaming arm of Niantic, which makes the Pokemon mobile games. But then it also has big stakes in lots of other gaming companies. It's got a big stake in Embracer, which owns IPs, including Tomb Raider. And the public investment fund is one of the biggest shareholders in companies like Nintendo, in Take-Two, which makes Grand Theft Auto. So Capcom, Nexon, NCSoft, if you think of a big name in gaming, it's pretty likely these days that Saudi Arabia owns a large chunk of it.

4:09So what's in it for the country? Why does it want all these gaming companies?

4:12Mohammed bin Salman:One reason, funnily enough, is that Mohammed bin Salman, the crown prince, is himself a huge fan of gaming. He is said to be a big fan of FC, which used to be called FIFA, which is one of the big franchises owned by Electronic Arts. So I think his personal enthusiasm is one reason for this. He has said that he wants to create a kind of Disney of video games. One way of looking at this is that where Disney has its theme parks, Saudi Arabia wants to have an equivalent in the form of live gaming experiences through esports. Esports meaning competitive gaming. And they've bought a couple of big esports companies, ESL and Faceit.

4:47Mohammed bin Salman:They're two big companies that run these contests. They bought those a few years ago for one and a half billion dollars. And Saudi Arabia now controls about 40 % of the global esports industry. Surely there's more to it, though, than MBS's love of gaming. Yeah, very much so. I think one big thing that they have said they want to try and do is to really try and create a new domestic industry here. Saudi Arabia has got this ongoing project to try and diversify its economy away from the oil industry, which is one day going to run out. And they see gaming as a good way of doing this. They hope that by 2030, they will have created 39 ,000 jobs in the gaming industry.

5:22Mohammed bin Salman:And they're not there yet, but they're on their way. They've recently formed an agreement with one of the local women's universities to train lots of students there in game design. And they clearly see this as a source of future jobs and future economic growth for a world in which the oil has run out. It's about more than diversification, though, isn't it as well, Tom? Saudi's been accused of sports washing when it comes to sailing, golf, tennis, football, you name it. They're trying to get the sports played there. Is this game washing? It could be. I mean, I think this is a really interesting side of it.

5:52Mohammed bin Salman:Obviously, they say this isn't part of the plan, but gaming is becoming a really important media business. As we mentioned, it's already bigger than cinema, than streaming, than music. So if you control the video games business or large chunks of it, you are going to have some pretty serious soft power, if you like. I think Saudi Arabia also sees an opportunity to project a different kind of image and to perhaps project a bit more of the region's culture. There are 330 million Arabic-speaking gamers these days. That's more than in all of Western Europe or in the United States. And they're currently not all that well catered for.

6:26Mohammed bin Salman:And I think a lot of people see opportunity to create games using that region's stories. You know, in the gaming business, they talk about lore from a particular country or region. And a lot of people in Saudi Arabia, when I spoke to them about this, cited China as an example of a country that has been really successful in using its own national myths and legends and turning them into games. Just last year, there was a a Chinese-made game called Black Myth Wukong, which has been a huge international success. And that has lent very heavily on Chinese myths and legends and has helped to popularise them overseas.

6:57Mohammed bin Salman:And so I think the kind of future endgame, and this is some years off, but one possible future that they see is trying to do something similar with the myths and legends of the Middle East and perhaps trying to project a slightly different kind of story from Saudi Arabia. Also political reasons in China for projecting its myths and legends. Tom, how will this change the games themselves? Hollywood is perhaps a possible comparison that you can make here. If you look at the way that the international film business has evolved over the last couple of decades, China has become a really important market there.

7:30Mohammed bin Salman:And as it has become one, a lot of Hollywood studios have rather shied away from some of the subjects that are difficult subjects in China. So films like Seven Years in Tibet, made in the 1990s, it's hard to see something like that being made today. And a lot of people wonder if something similar could happen in the games industry. So with electronic arts, for example, games like The Sims embrace LGBT themes. You know, you can have gay characters who get married and some people have said, oh, is this going to stop now? I think the answer is probably not. I don't think we're going to see a sort of immediate Saudification of beloved Western franchises.

8:02Mohammed bin Salman:But I think we might see a bit more of a Saudi accent on some games. There are a couple of interesting examples of this already. Ubisoft, which is a French company that makes the Assassin's Creed franchise, recently announced that the next set of levels for Assassin's Creed are going to be set in Saudi Arabia, in a city that Saudi Arabia is currently trying to promote as a tourist destination, in fact. And there was a funny example recently where fans of Fatal Fury, which is a Japanese-made fighting game, they were a bit surprised when it was announced that the latest character in this game was going to be Cristiano Ronaldo, a Portuguese footballer.

8:34Mohammed bin Salman:And there's a possible Saudi explanation for that as well. Fatal Fury is made by a company which is now majority-owned by a Saudi foundation, and Ronaldo is the captain of a football team in Saudi Arabia, which again is majority owned by the Public Investment Fund. So we might see more and more of these tie-ups in future as Saudi Arabia's influence in the gaming industry increases. Tom, thank you so much for talking to me. Thank you.

9:12With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open seven days a week to assist with your banking needs. Yep, even on weekends, it's pretty much all he talks about. In a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank. Capital One N.A. member FDIC.

9:48I'm in Helsinki today. It's a clear, mild September day, and I'm on my way to visit Helsinki shipyards, which is where most of Finland's icebreakers get built. It was owned by a Russian... Finland is an icebreaking juggernaut. Around 80 % of the world's icebreakers are designed by Finnish companies, and more than half are built there. One country long in dire need of such ships is America. Fraser McIlwraith is a news editor at The Economist. Part of the reason Finland has developed its niche in building them is out of necessity. When I went to the docks in Helsinki, I saw icebreakers sitting in the harbour that weren't in service.

10:32It was the summer, and it would be months before they were needed to clear Finland's ports. It's the only country whose ports can all freeze over in winter, and it needs the ships to keep the Baltic Sea open for trade. We can do a short test run. Yep. So what's happening here is actually we have a chronicle model attached to a servo stage. And the servo stage and the system, the purpose of it is to model everything else. While I was in Finland, I met engineers at Aalto University, which is home to the world's biggest ice tank. There, they do tests for icebreakers and all kinds of other ice-capable tech, like wind turbines.

11:16Yuka Takuri, a professor there, said that he and his team have never been busier. Later in my trip, I went to the headquarters of Acre Arctic, where I saw a giant model ship around three metres long splitting ice with its orange bow in a similar testing tank.

11:37Designing these ships is extremely difficult. Icebreakers need thick steel hulls, powerful engines, and complicated vibration control and ice-proofing systems to survive in extreme conditions.

11:54But Finland really seems to have cracked it. The industry is small and tight-knit, meaning that it's built up really, really specialised companies. Most ships are made to order, meaning that they need this kind of specialisation. It's not possible to build them in the large production runs that are common in the giant shipyards of East Asia. Since 2005, Akur has produced designs for 59 different icebreakers. Helsinki Shipyard alone has built 12 over the same period. Such vessels are often highly specialised. Baltica, a rescue ship that it made for Russia in 2014, has an asymmetrical hull that lets it sail sideways, carving a 50-metre path through ice that's wide enough for two ships to sail through side by side.

12:48Throughout its period of non-alignment during the Cold War, Finland made icebreakers for Russia. But that stopped in 2022, after the Kremlin's full-scale invasion of Ukraine. Finland joined NATO last year, and now its shipyards want Western buyers. Donald Trump has long said he would be one of them. During his first term, he floated the idea of buying icebreakers from Finland. This year, he's talked again about buying anywhere between 15 and 40 of them. On Thursday, America finally signed a pact with Finland, reportedly worth around$6.1 billion. As part of the agreement, Finland will build four icebreakers and export them to America.

13:36America will then get help from Finnish experts to build seven more ships. It's about time. America's icebreaker fleet is aging. Its last ship, Healy, was finished in 1997, and before that, it last built an icebreaker in 1975. Its Coast Guard says that it needs 10 icebreakers to fulfill its missions It only has 3 that still work All of that means that there are serious worries About the gap between the capabilities of America's Coast Guard And the role that the country needs it to play in Arctic security Russia and China are vying for control in the Arctic And shipping routes through the sea are getting busier

14:27In August, two Chinese icebreakers sailed over America's extended continental shelf, an area of the seabed that Uncle Sam claims off the coast of Alaska. The Coast Guard sent Healy to monitor their activities, but the concern is that such incidents could become more and more common as sea ice melts. A better fleet, built with the help of Finnish experts, may help deter them. Trump once called Finland the king of icebreakers. He'll be glad that he now has them on side.

15:12And for a very different aspect of Russian power, tomorrow on The Weekend Intelligence, we're running a bonus episode of a podcast series we released in 2023. Next Year in Moscow told the story of how Russia changed after the invasion of Ukraine and what that meant for those who opposed the war and Vladimir Putin That conflict goes on and so does the fallout This episode recounts the story of two playwrights the first Russian artists since Soviet times to be prosecuted for the content of their work A dramatic show trial in every way You'll need to be a subscriber to listen

15:57The opening tip-off is controlled by Brooklyn. Kuru has it. And we're underway in Shenzhen. It was October the 12th, 2019, and the stadium in Shenzhen was buzzing. 5.25 to go. 360 spin by LeBron. And the Brooklyn Nets were taking on the Los Angeles Lakers. It was the final basketball game in China before the new season began. And the Nets won. But that's not what would make this game significant.

16:31That night six years ago marked the last NBA game played on Chinese soil. Until today. It all started with one tweet. Daryl Morey, who was the general manager of the Houston Rockets at the time, posted support for Hong Kong's pro-democracy protesters. And these were protests that had been going on for months and were really reaching fever pitch. And so this post really hit hard. It made Chinese leaders very angry. Vishnu Padmanabhan is an Asia correspondent. And even though the NPA issued a statement regretting the offense the tweet caused, China felt it should have done much more. In response, it asked state broadcasters to pull NPA games from television.

17:15Several sponsors also cut ties. And we don't have an exact number, but all told, the losses amounted to hundreds of millions of dollars for the league. And it's taken a long time to sort of patch up relations. So one big milestone was in 2022 when games began airing again on Chinese state media. But I think the real milestone is today, when the NBA is finally returning to Chinese soil with one preseason game being played today and another one on the 12th of October. Both are being played in Macau. Vishnu, the scale of the NBA's excommunication from China was extraordinary. And it does seem a surprising time now for this freeze to be warmed up when there's so much tension still between the US and China.

17:57What's happening? This might be a case where business is sort of trumping geopolitical tensions. For the NBA, China is its biggest overseas market. So the fan base in China has been growing ever since. state media, they started broadcasting NBA games in the 1980s. Around 450 million people follow the game in China, which is more than the entire American population. It's home to more basketball fans in the world than any other country. And a lot of them love the NBA. So by 2023, half of all Chinese internet users said they watch the NBA regularly. So if the NBA really wants to continue growing, it needs the Chinese market.

18:35And it's not just the NBA that benefits. Other companies can profit too. So Nike and Adidas, for example, use NBA stars to sell a lot of their products in China. So this isn't just about sport. It's a big business as well. So the wins for the NBA are pretty clear. But what about for the Chinese government? What's in it for them? It's a good move because basketball is so popular and it makes people happy. So I think it's politically a good decision on that front. But I think closer ties with NBA could also improve the development of the game in China. So China loves basketball. but it isn't very good at it.

19:08For example, they didn't qualify for the last Olympics. And then there are benefits for local businesses as well. So the live games that are happening in China generate revenue for the local organizers. And Chinese firms also profit. Man, that Kyrie is special. It must have been the fourth and his team was down. So in 2023, Amta, which is a sportswear firm based in the eastern city of Xinjiang, signed Kyrie Irving, one of the league's best players, to be the face of his basketball line. But Boyan looked effortless. Man, watch this. Several other NBA stars have followed suit with similar deals.

19:44And Anta now, by one estimate, may be the third biggest sportswear firm in the world behind Nike and Adidas. So to use an expression favored by the Chinese Communist Party, it's a win-win. Yes, these matches that are going to be played in Macau are considered a prelude to more games being played on the mainland. And it's also very good timing because earlier this year, Yang Hansen, a potential young Chinese star, was drafted by the Portland Trailblazers. And that could propel the NBA to even greater heights in China. Because the last time the NBA had a Chinese star, Yao Ming, it drove huge interest in the sport in China.

20:20But I think overall, the decision sends a message to the rest of the world, especially in a time of geopolitical tension, that American business is welcome to China, but as long as it plays by China's rules. Vishnu, thank you so much for talking to me. Thanks for having me.

20:50That's it for this episode of The Intelligence. The show's editors are Chris Impey and Jack Gill. Our deputy editor is Jonjo Devlin and our sound designer is Will Rowe. Our audio correspondent is Sarah Larniuk. Our senior producers are Rory Galloway and Alizé Jean-Baptiste and our senior creative producer is William Warren. Our producers are Henrietta McFarlane and Benji Guy and our assistant producer is Anne Hanna with extra production help this week from Jonathan Day and Emily Elias. We'll all see you back here for the Weekend Intelligence tomorrow.

21:58Thank you. and estimate trade in value. Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One.