Will Saudi Arabia’s big bet on the Qiddiya gaming and esports city pay off? | The DeanBeat

A decade ago, Mike Milanov gave me a tour of the new headquarters for Team Liquid, an esports team in Los Angeles that was supported by gaming PC maker Alienware. The computer maker helped Team Liquid entice esports athletes by enabling a pampered life. They got access to expert health and medical advice, food from an amazing chef and massages to help them with recovery after matches.

It took a lot of vision to do that, as Los Angeles was soon beset with esports headquarters. Then the esports winter set in. Milanov is now at the forefront of another movement in gaming — this time in Saudi Arabia, where the nation is taming nature to carve a gaming and esports city out of some giant desert cliffs, like something out of the film Dune.

Milanov is now head of gaming at Qiddiya, a dreamy “Giga Project” under way near Riyadh in Saudi Arabia. The Saudis want 17 million visitors a year to go to Qiddiya by 2030, making it the “largest tourism destination worldwide.” Not so different from Team Liquid’s heaquarters, the aim of Qiddiya is to build a whole city where gamers, esports athletes and their fans can feel at home, and Milanov is moving into high gear soon to sell people on the idea of Qiddiya. Will giant sandworms get him, or will it all pay off?

It’s an ambitious effort to build a city in the desert cliffs and eventually create 325,000 jobs for people living in the place. And it’s the future home of the Esports World Cup, which was held this year in a kind of outdoor mall in Riyadh dubbed The Boulevard. The Boulevard is just one long street — a kind of test for the same kind of vision as Qiddiya.

These are manifestations of a strategic plan to invest $37 billion in gaming and esports through the kingdom of Saudi Arabia’s Public Investment Fund in an attempt to diversify the economy away from oil and create jobs for Saudis.

The prize pool for the Esports World Cup was $60 million, but some people decided not to go. Critics say that this amounts to one more attempt at “sportwashing” and an attempt to draw attention away from human rights issues such as the lack of rights for LGBTQ+ people in the kingdom of Saudi Arabia. Like Team Liquid CEO Steve Arhancet, Milanov decided to dive all in.

“The best thing is for all of the Arabic countries not to be grouped together when you think about your opinion, and for you to come check it out personally. That’s what I did, and then right afterward I started at Qiddiya,” Milanov said.

While some projects are competing for both attention and dollars, Milanov said, “We’re all on team KSA.”

Disclaimer: The New Global Sport Conference paid my way to Riyadh. GamesBeat is a media partner with NGSC. Here’s an edited transcript of our interview.

GamesBeat: I was thinking about what you said on the panel. There are so many young people. There’s a ready-made talent pool. But everybody needs training. From your point of view, on how fast things can move, how fast things can grow, what are your thoughts?

Mike Milanov: I thought the panelists were key. It’s the private equity division focused on gaming from the Public Investment Fund, which is Savvy. They’re focused on bringing companies here and funding development of games, development of academies. Then you have the Ministry of Communications and Information Technology. They need to make sure that the ping is low, that the games have local physical servers, local cloud servers, because otherwise you’re pinging other parts of the world while you play, which puts you on an unequal playing field.

Then you have Qiddiya, but I have some stats. Of the 35 million Saudis, 23.5 million are gamers. As a result, 67% of the population are active gamers. You can’t find that anywhere else. It’s a $1.6 billion video game market in Saudi today, growing to $6.8 billion in 2030. Everything is under this Vision 2030. If you look up the National Gaming and Esports Strategy, it has 28 bullets of initiatives.

If you’re a Saudi CEO, if you’re a company, or even–I’m drinking Barns Coffee now. Even Barns Coffee is thinking about, “Maybe we can only support one of the 28 bullets in the NGES, but we’re going to do it to drive the Kingdom forward.” They could sponsor a team. They could offer product integrations at Esports World Cup.

For me, the way I see Qiddiya, we must be responsible for a large majority of those strategic initiatives within the NGES. We need to create infrastructure and a place. If everyone in the Kingdom wants to contribute, they need a place to manifest their contributions. That could be anything. That could be content. That could be IP. That could be events. That could be retail, commercial, hospitality. Even universities or esports training facilities or academies. We need to make this physically possible. That’s our responsibility. It’s a big responsibility as a project.

GamesBeat: You get back to, there’s no better place in the world to undertake such a national strategy.

Milanov: If you think about some of the other governments around the world, they’ve focused on esports or a venue or a particular segment of gaming, because maybe a big publisher is based there that contributes to GDP. But nobody is really, from the ground up, envisioning–what if we wanted to be immersed with all the relevant stakeholders in the industry, and not only pay attention to the esports side, but also the greater market of casual gamers? What do we need to build?

Imagine if you were in Tokyo and sitting there 100 years ago. You could say, “We have a vision for Akihabara. We know what it’s going to become.” What would you have built? You probably wouldn’t have built what’s there now. It just naturally evolved.

GamesBeat: You have an interesting situation. You have to manage upward, I would guess. But you have people up there who are listening. In most places in the world, government folks don’t necessarily listen.

Milanov: I would not say only listening. I would say directing and innovating and making decisions very quickly. Even if it’s a no, it’s quick. Then you move on to something else. You get guidance. That’s all because His Royal Highness, Prince Mohammed bin Salman, also the executive chairman of Qiddiya, is a gamer himself. Think about that in any other country, any other monarchy, any other government around the world. You pretty much can’t find that. We’re very lucky to have that.

GamesBeat: As far as the coordination of all these efforts, you get to interesting questions. What should be the difference between Qiddiya and The Line? What different roles do you both play? In some ways they’re competing, but they’re so different.

Milanov: We’re all competing in a way. We’re trying to draw visitation. But we’re all on team KSA. We all want the Kingdom to succeed. Some of us are more involved in a particular business segment or category than others. The best way to think about it is that there’s a Saudi gaming authority. There are 25 mega- or giga-projects in the Kingdom today. The gaming authority’s job is to synergize and make sure that they understand–are there new things that a giga-project wants to contribute or take on? Then there’s also direction. Does that already exist elsewhere? Should you take this on? Are you being duplicative? That’s very important. Then we’re having an integrated approach, but it’s also more focused and efficient.

GamesBeat: How far ahead can you run with new ideas? Especially if there are still people around who think older ways are better? How do you accomplish cultural change when not everyone is totally on board with it? I think in particular about parents. They’re the ones that are more concerned about what they were saying on stage about addiction.

Milanov: Outlining the positive effects of gaming, the community–youth nowadays are more comfortable communicating with fellow gamers. They develop relationships online first and then those relationships manifest physically. I also think about, how do you move forward from a traditionalist culture? You just keep on insistently talking about the positives. But it’s also supported from the top. Since it’s a focus at the national level, everybody has to jump on board the train. That’s very helpful for driving the future.

Most of the population, like I said, is very young. Under 35. They consider themselves gamers. There is some traditionalism, but it’s quickly becoming the minority as it pertains to gaming.

GamesBeat: There are places in the world that can’t get something like this done. Americans, we can never agree on anything.

Milanov: We thought about how long it would take, in some other places in the world, to get funding, get the blue sky idea approved, start construction, figure out the land or whatever it’s called. It would take 20 or 30 years. Even just the World Cup stadiums. We have more than nine stadiums under construction for our bid in 2034. How long would that take? They’re in different cities, different areas of Saudi Arabia. That alone, just thinking about stadiums, those are some of the biggest construction projects in the world.

GamesBeat: Qiddiya itself, what is getting more real about what’s happening? How far along are you?

Milanov: There will never be a ribbon-cutting ceremony for the entire city. I’m working on things that are for 2025 and I’m working on things that are for 2046. It’s the first time I’ve done a 2050 forecast. It’s the first time I’ve been pushed to think about technology. What will this look like in 2040 or 2050? Will the investments in 2024 still be relevant? Future proofing it that way and staying nimble and malleable in that way is important.

In terms of the city itself, we’re a destination for all things sports, entertainment, arts, gaming, and culture. If you think about sports, we’ve announced a 52,000-seat World Cup stadium. We’ve announced a Formula One track. We’ve announced so many different sports and arts assets, and then the gaming and esports district. All of those are different districts of the city. The city is 360-plus square kilometers. Every district has its own horizon of when certain assets are live, when there’s a grand opening, and then how it integrates into the rest of the city.

I went to the construction site a year ago. I went again a couple months ago. I could never have imagined this much progress. If you look at some of our content, our construction updates on LinkedIn, it starts from the lower plateau. It’s kind of a horseshoe-shaped cliff and then the lower plateau, which is downtown. It’ll start from downtown and then move to uptown, what we call the upper plateau. I can’t wait to see that materialize over the years.

A little bit under 700,000 people will live there, and we’re creating 325,000 jobs. That’s everything from retail to the theme parks to the companies we’re launching and relocating here, opening up satellite offices. A lot of the creative roles we talked about as well – creative marketing, social media, esports management, things like that.

GamesBeat: What is working more when you have these challenges? How do you attract people into the country? Against different backdrops–there’s some resistance. There are LGBTQ issues. There are the sportswashing concerns people have. What works when you run into some of that resistance? How, over time, can this vision make all of those people feel like this is a place for them to be?

Milanov: Yeah, how do we approach those conversations? Once again–your traditionalist question was kind of the same. Point out the positives. The amount of progress made in the last seven years since the change in rulership of the Kingdom, since the crown prince became crown prince, has been equivalent to 50 years in other parts of the world. Maybe they did it earlier, but that’s very positive for me, seeing that. Very similar to how we talked about–governments can’t make quick decisions, in other parts of the world, to build something or fund something. The same thing happens with these types of modernization initiatives.

The number one thing we can do to break the ice is bring people here. We’re at the New Global Sport Conference. There are 1,400 attendees. Bringing executives and CEOs and CMOs and media like yourself to the Kingdom, that helps everybody make their own opinions. Saudi does a good job, actually, of not launching these expensive campaigns about what your opinion should be around the Kingdom. Opinions get formed naturally, whether in the sports sector or in gaming and esports.

The best thing is for all of the Arabic countries not to be grouped together when you think about your opinion, and for you to come check it out personally. That’s what I did, and then right afterward I started at Qiddiya.

GamesBeat: Esports still seems to be proving itself as a business. It’s still trying to reach some of its goals. How confident are you that it will get there in time for when everything here is ready?

Milanov: The answer is different for competitive leagues and publishers or tournament organizers that run them, as opposed to professional players and teams or clubs. There’s still steady growth. Two things are happening. The total gaming population is increasing, and the percentage of the total population that watches competitive gaming is also increasing. Now, whether the percentage of that total population increases the number of people who play professionally, that doesn’t matter. The professional player base is 0.0001%, something like that.

The challenges of the industry–it’s kind of like the crypto bubble or the dot-com bubble. In Silicon Valley, especially in tech VC, there will be these moments where there’s three years of surge and then that calms down. Currently it’s AI. For esports, everybody needs to figure out–the last 20 years have all been about free. Free content. Free streams. Very low ticket averages to go to events. Free meet and greets with your favorite players. You get a lot of replies on social. You get a lot of access. You get a lot of behind the scenes content on YouTube.

I’m not saying they should paywall everything. But that direct to consumer business model needs to be figured out. Teams are innovating right now. Teams are trying to figure it out. Should we go the loyalty route? Should we launch tech products? How do we create this 360-degree ecosystem to generate direct to consumer revenue? Today it’s 50 cents per fan. In the future it might reach a dollar, three dollars, seven dollars. I think the average for the NFL is something like $120. The NBA is $70. Those sports have been around for decades. If esports is in phase one, the first 20 years, I think there are many more of those to come.

GamesBeat: And your strategy would be to do whatever it takes to accelerate that.

Milanov: Absolutely. We don’t only want to support the Kingdom in accelerating. We want to also support it globally. You’ve seen that with the Esports World Cup and the club program. You’ve seen the Saudi Esports Federation and how it focuses not only on the ecosystem in Saudi, but also globally. Qiddiya will do the same thing. As we announce all our various partners across the creator economy, across the competitive economy–we’re doing a lot of cool road shows and experiential activities. League sponsorships and strategic partnerships. As the years go on, we’ll see more and more of that global support from team KSA. We need to be critical in that.

GamesBeat: Going from The Boulevard to Qiddiya, how long is that going to take?

Milanov: The Boulevard is where the Esports World Cup happens currently, in Riyadh. It’s really cool. There are temporary structures. It’s constantly innovating and growing. The ICT infrastructure around everything is growing. It’s very tough to compete with. We can’t just build equal to today. We have to build five times, 10 times, in order to convince folks to hold their events there in the future. We’re taking key learnings and focusing on what could level up the experience.

GamesBeat: Do you also feel like you’re getting ready for the Olympics at the same time? An eventual convergence?

Milanov: The 2034 World Cup bid is huge, even for Qiddiya. Just getting ready for that alone is a big task. The way that we look at bids like that, they’re an overlay on your city. You have your standard city, which you have thought of and conceptualized and you’re building. That has certain visitation and tourism demands. When you add the overlay of the Esports World Cup, the FIFA World Cup, the Asian Games, things like that, the visitation and hospitality and tourism requirements spike. You need to build additional infrastructure – some could be temporary or additive – in order to respond to that event overlay. We want to make Saudi ready to be able to win any bid.

GamesBeat: Is there anything else you wanted to make sure we covered today?

Milanov: I’m excited about the gaming and esports district. We’re about to hit a year since we announced that. We’ve wrapped that all, from a messaging perspective, into this Qiddiya Gaming brand. You can check out Qiddiya Gaming on X and Instagram and Tiktok and Discord. We think we’ve done a great job communicating through that Qiddiya Gaming brand, instead of this big scary giga-project government tourism authority brand.

We’re not trying to get you to buy a flight to Saudi at this point. We’re trying to show that we understand gaming. We understand what you’re looking for in this global epicenter. I think we’ve done a good job with that Qiddiya Gaming brand.

Disclaimer: The New Global Sport Conference paid my way to Riyadh. GamesBeat is a media partner with NGSC.