Gfinity appointed esports partner to help Saudi Arabia become ‘the global hub’ by 2030
() have announced that they have been appointed by Saudi Pro League (SPL) as the exclusive esports strategy development partner. SPL is responsible for the management and organisation of the top division of professional football in Saudi Arabia.
The question is, why would the SPL be interested in esports?
Saudi Arabia has big ambitions in this sector, having just established a National Gaming and Esports Strategy, which aims to make the country ‘the global hub’ by 2030.
“There is a call for diversifying the Saudi economy away from [a reliance on] oil. One of those projects underneath the vision is a specific strategy for gaming and esports,” according to Prince Faisal bin Bandar bin Sultan Al Saud.
This strategy included the Saudi government announcing plans to invest $37.8 billion into the sector to encourage game development and esports in the Middle East.
This is backed up by growing interest within the country after a YouGov survey found that 89% of the Saudi population are gamers, the highest per capita globally.
YouGov surveyed more than 1,000 male and female residents of Saudi Arabia, aged 18+, who spend at least seven hours a week gaming.
The research also demonstrated the massive crossover appeal between gaming and esports taking place in Saudi Arabia, with more than three quarters of gamers (78%) saying they were interested in esports, with 39% “very interested”.
Gfinity's Role
Gfinity's appointment is with immediate effect and its first assignment is to help bring forward SPL's virtual football gaming strategy with an emphasis on grassroots' competition, gameplay, and live experiential events. It will gather input from SPL's key stakeholders, including the Saudi Esports Federation (SEF), to create this multiyear programme.
As yet it's not clear how much revenue Gfinity will generate from this partnership but it's quite clear that The Kingdom of Saudi Arabia are serious in their ambitions to establish their country as a centre for esports and gaming by 2030, backed up by some serious finance.
Also encouraging for Gfinity holders is that the company have been appointed to create a "multiyear programme", meaning this is not likely to be a one-off payment but a contract for many years.
Gfinity has a wealth of experience in developing esports solutions for many big brands including Formula One, Red Bull & Manchester United FC but this is the first time an entire country has employed their services so its quite a big deal.
Gfinity's Solutions
This announcement is also very timely as the company launched Athlos in August, which is a tournament-based platform that leverages the power of competitive gaming to deepen player engagement, to lower player churn and to increase average revenue per user (ARPU).
Athlos is a fully configurable, white-label, bespoke solution and is already trusted by some of the world's biggest gaming and esports organisations. It is also very scalable, when launched the product had been used 73 million times within 30 days and a has growing number of clients on recurring annual contracts and a strong pipeline of prospective future clients.
Athlos is just one pillar of Gfinity's business model, the other two pillars being Gfinity Digital Media and JVs and Partnerships.
Gfinity Digital Media is made up of 11 owned websites that reach more than 15 million monthly unique active users and delivers 75 million impressions per month across its social network of over 7,000,000 followers.
JVs and Partnerships - Esports Solutions allow the company to benefit from co-owned ideas, working with partners who value and benefit from Gfinity's expertise, to create products such as the Global Racing Series with Abu Dhabi Motorsport Management, and esports activities for Manchester United FC, and Formula 1.
Valuation
At a price of 1.25p per share the market capitalisation is circa £16m and having completed a fundraise of £2.7 million in March their enterprise value would be around £14m.
The last broker note suggested revenue of £10.5m for this year (year end 30th June 2023) and generating £2.3m of EBITDA. If this forecast is accurate it would mean they are currently valued on a EV / Sales multiple of 1.3, which is below a peers average of EV / Sales multiple of 5.
This broker guidance was issued on 9th March and obviously before this partnership with The Kingdom of Saudi Arabia.
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