A new esports tournament in Saudi Arabia promises to be a game-changer – but it’s also caused division in the industry
By Ben Church, CNN
(CNN) — In the heart of Saudi Arabia’s capital, a seismic moment for esports is underway; one which has triggered both excitement and concern across the industry.
The Esports World Cup (EWC) – which began on July 3 – has brought together professional gamers, publishers and fans from across the world for an eight-week competitive gaming bonanza.
Its record-breaking prize pool of more than $60 million has raised eyebrows and Ralf Reichert, CEO of the Esports World Cup Foundation which is organizing the event, told CNN Sport that the spectacle will help unite the industry.
“The question was: what is missing in the sports landscape? To bring this on the similar scale as the largest traditional sports events and something that brings together the whole industry,” Reichert said.
“There’s a fantastic landscape of amazing tournaments, leagues, clubs, all of that stuff exists [in esports]. But what is the one thing that brings it all together?
“That was the guiding principle when we thought about [the EWC], designed it and then announced it.”
But while the tournament will be a shot of adrenaline for esports, its launch has refreshed existing concerns about the industry’s relationship with Saudi Arabia.
How can the EWC help the industry?
The EWC is Saudi Arabia’s latest foray into esports, coming after the Gamers8 event last year, which boasted a $45 million prize purse.
This year’s tournament will involve some of the world’s top organizations – such as T1, FlyQuest, Gen.G Esports, Fnatic and G2 Esports – competing against each other across 21 esports titles.
The best performing club across the various titles will be crowned the ultimate EWC champion.
The eye-watering prize purse which will be broken down into different categories, such as player bounties and prizes for overall performance.
The EWC also comes after a difficult period for an industry which has seen large-scale layoffs. At the start of the year, game developer and publisher Riot Games letting 11% of its workforce go.
According to the New York Times, esports leagues are struggling to make money, while sponsors have slashed their advertising budgets and many teams are now operating at a loss.
But the EWC is now providing an opportunity for over 20 major brands – such as Adidas and KitKat – to forge fresh and lucrative partnerships with esports teams across the tournament.
In June, Warner Bros. Discovery – CNN’s parent company – and the Esports World Cup Foundation agreed to a new partnership which includes Eurosport, CNN and other WBD platforms.
However, Reichert says the EWC was not created to help boost an ailing industry and that, no matter the state of the esports community, a tournament such as the EWC was pivotal in allowing organizations to flourish.
“So even without the overall economic downturn, we would have done the same thing,” he said.
“We fundamentally believe that this competition will unite the industry and heavily put [clubs] in the middle of it.”
Through the Esports World Cup Foundation, Reichert is excited about the launch of the EWC Club Program. The initiative will bid to “promote sustainable planning” by offering 28 clubs worldwide an “annual six-figure payout.”
The hope is that it will offer organizations a platform in which to grow and maximize their participation in the annual tournament.
Sam Mathews, founder and CEO of esports giant Fnatic, says the program will afford the organization the opportunity to branch out into different game titles – such as Street Fighter – which in turn will help the overall esports community.
“A lot of that money is going to go into new regions, new games, new audiences, new players. It’s actually going into the ecosystem itself,” he told CNN Sport.
“It’s very exciting to go into new games and compete with other teams.”
Industry concern
While the EWC promises to bring of excitement and stability to the industry, it’s also proved a divisive topic.
Many are concerned by the tournament’s links to Saudi Arabia, which has been accused of “sportswashing” – a concept that involves nations using high-profile sporting events to project a favorable image of their country around the world, often to draw attention away from alleged wrongdoing.
Reichert says the EWC Foundation, which officially runs the event, is a non-profit organization but says its been part-funded by the Saudi government – in the same way a host nation would invest in any major sporting event, he adds. Part of its funding also comes from sponsors.
However, Reichert also says there are no plans to move the EWC away from Saudi Arabia in the near future.
“It’s a country which is investing in [esports] on a scale that no one else is at this point in time and that is fantastic for the sport,” he added. “Everything we ever dreamt of, to be honest.
“I wouldn’t rule out that it ever goes out of Saudi Arabia, but for the foreseeable future, definitely the plan is to stay there and to build it as a hub.”
Saudi Crown Prince Mohammed bin Salman, who helped launch the EWC, previously said he doesn’t “care” about the country’s investments being described as sportswashing.
“Well, if sportswashing is going to increase my GDP by one percent, then I will continue doing sportswashing,” MBS said in an interview with Fox News which aired in 2023.
The concern around the nation’s human rights record – notably freedom of speech and treatment of minorities – has been widespread in esports, with some inside the industry refusing to take part in the EWC.
With the Gulf nation looking to diversify its economy and move away from its heavy reliance on fossil fuels, it already has a large footprint in competitive gaming.
The Saudi government-controlled Public Investment Fund (PIF) has in recent years bought some of the biggest companies in the industry, namely the Savvy Gaming Group (SGG).
SGG has since acquired ESL, a leading organizer of esports events, and FACEIT, a top digital platform, as it continues its aim of making Saudi a hub for global gaming.
According to esports insider and journalist Rod Breslau, Saudi’s growing control over the entire industry is what is most problematic, not simply the creation of the EWC.
“It’s just the next thing, the next domino that’ll go down,” he told CNN Sport.
“If this really was a privatized company that just got huge in Saudi Arabia for doing esports games, I wouldn’t have as much of a problem with it.
“But it is their government and this is the entire initiative. All of this is used to just change opinion.”
Human rights concerns
Human rights organizations are also concerned about the Saudis’ continued investment in esports.
“Saudi Arabia is investing billions in esports, a field thriving on online interactions, while cracking down on any form of critical online expression with harsh prison terms and even a death sentence,” Dana Ahmed, Amnesty International’s Middle East researcher, told CNN in a statement.
“We must not forget the brave voices imprisoned and punished for their online expression, such as fitness instructor Manahel al-Otaibi, jailed for 11 years for her support of women’s rights online. Esports participants and fans should look beyond the spectacle and be aware of the crackdown on online expression in Saudi Arabia.”
The concerns are mirrored by Nick McGeehan, co-director of FairSquare – a non-profit human rights organization. In a statement to CNN, he says investing in esports will allow Saudi Arabia to target a younger demographic with its narrative.
“What they don’t want the world to see or talk about are the murders of journalists, the repression of women’s rights activists, the life sentences for tweets expressing mild criticism of the authorities, or the grossly unfair trials and death sentences handed out to people who challenge the authoritarian rule of Mohamed bin Salman,” he added.
CNN has reached out to PIF for comment but is yet to receive a response.
It is criticism which has put some esports organizations on the back foot, with fans expressing their disdain on social media.
Team Liquid – a leading esports organization – released a lengthy video on social media explaining its reasons for participating in the tournament, while confirming it would support members of the team who did not feel comfortable with being involved.
Team Liquid’s co-CEO Steve Arhancet also wrote a message to fans on X, formerly known as Twitter, where he further explained the decision.
“I and fellow TL executives have had conversations with women and queer individuals in Saudi Arabia, and consulted domain experts at multiple NGOs such as Amnesty International and Out Leadership,” he wrote.
“While there is still much for me to learn, a recurring theme from these experiences has shaped my opinion: Progress lies in engagement, not isolation.”
He added: “As a gay man, I understand the pain of exclusion. However, as a US citizen, I know my struggles pale compared to what LGBT Saudis face daily,” he said, adding he wants to use the EWC to keep talking about the issues.
According to Breslau, Team Liquid’s players are permitted to and will wear Pride jerseys while competing at the tournament.
Mathews is aware of those who feel let down by the decision for Fnatic to compete at the EWC this year, but said he has seen enough “positive sentiment” from Saudi Arabia to see that it’s moving in the right direction.
“Ultimately, sport is unifying and it’s entertainment. We need a world where we have more unification than division, right?” he said. “We need a world where we have entertainment when there’s a lot of anger and division.
“From my experience, there are a lot of people in [Saudi Arabia] that love their games, right to the top. So I don’t think this is artificial. They do love esports and gaming.”
It’s a narrative which is shared by Reichert, who says he is heavily engaged with the debate surrounding the issues in Saudi Arabia.
“There is a certain view across the world in different countries about Saudi Arabia, and some of it is true and some – and a lot of it – is not true,” he said, when asked to respond to criticism of the EWC.
“It’s probably unprecedented how quickly Saudi Arabia is moving ahead in its progression. And its intentions to grow and open up is actually what’s happening on site, and everything else time will tell.”
While it’s yet to be seen how successful this year’s EWC will be, it appears the tournament and Saudi’s involvement in the industry is set to grow.
Those opposed to the nation’s involvement are left in a tough position, with the community far from finding a common consensus.
The-CNN-Wire
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