Saudia Arabian investment firm Electronic Gaming Development Company (EGDC) has increased its stake in Capcom, one of the games industry’s foremost developer/publisher combos. The investment is the latest in a trend that has seen Saudia Arabia’s stake in Capcom creep past 10%, with this new purchase pushing the total even higher. Notably, the EGDC is owned by the Misk Foundation, which Saudi Prince Mohammed bin Salman founded in 2011.
Outside the investments, Capcom has been on something of a hot streak lately, recently releasing Resident Evil 9 and Monster Hunter Wilds, with triple-a blockbusters like Pragmata slated to release on April 17. However, recent investment activity has raised red flags among many of the company’s fans, who are worried about human rights abuses stemming from the region, as well as a potential decline in quality from the publisher should Saudia Arabia own too much of a stake.
As first reported by GameBiz.jp, EGDC has increased its investment stake in Capcom from 5.03% to 6.04%, a 1.01% increase. The numbers come via a “Large-Scale Holding Report” submitted to the Kanto Local Finance Bureau on April 6. Notably, EGDC’s initial 5.03% stake in Capcom came just last month, which could indicate that more purchases are on the way. Given Capcom’s recent success, it wouldn’t be surprising to see investment groups carve out larger portions of the company.
EGDC isn’t the only major Saudi investor with a stake in Capcom, as Ayar Investment First Co., which is based in Riyadh, has a roughly 6.6% stake in the company. While the investments are significant and appear to be happening on a rapid timescale, they’re not happening so quickly as to be considered a hostile takeover of Capcom.
Capcom is far from the only gaming giant Saudi Arabian investors have their eyes on. Investment groups from the region have also invested in Nintendo, Nexon, Square Enix, the Embracer Group, and many others. There’s even a $55 billion deal aimed at taking EA private, which would be a dramatic shakeup for the company and the broader games industry. However, changes of that size often take years to complete, so fans may have some time before they see any major changes coming from EA.
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Over on the Fighters subreddit, fans have received the news with a resounding thumbs down, with user LuvAshrepas commenting, “Someone please make it stop before it’s too late,” and thumper_92 stating, “It’s crazy how there is literally nothing anyone can do to stop this.” However, Capcom isn’t necessarily powerless to stop a takeover should things turn hostile, as there are methods companies use to thwart takeovers they find unsavory. Seeking friendlier buyers or allowing other investors to purchase shares at a discount, thus diluting the hostile company’s shares, are just some of the options.
It’s clear that Saudi Arabian investors want to make moves in the games industry, but what the future holds is less certain. Things could work out into many different shapes, though at this pace, the industry may look far different in a few years. With constant studio closures and cancellations, the games industry needs a shakeup — this just isn’t what most people had in mind.
- Date Founded
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June 11, 1983
- Headquarters
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Osaka, Osaka, Japan
- CEO
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Kenzo Tsujimoto
- Subsidiaries
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Capcom Taiwan, Capcom U.S.A., Capcom Vancouver, Capcom Division 1, Capcom Production Studio 4, Capcom Production Studio 1, Capcom Production Studio 2, Capcom Production Studio 3, Capcom Maintenance Service Co., Ltd.