The competitive gaming industry has grown rapidly over the past two decades, transforming from a niche sub-culture into a global phenomenon watched by millions of spectators worldwide.
More than 3 million fans attended the 2025 Esports World Cup in Saudi Arabia alone, according to the tournament’s organisers, where professional players and teams competed for over US$70 million (£53 million) in prize money.
As I have found in my own research, esports are no longer just contests between players. They have become arenas of significant geopolitical competition in three main ways, as instruments of economic development, soft power and statecraft.
1. Pillar of economic diversification
Saudi Arabia has invested heavily in esports as part of its broader efforts to reduce its economic reliance on oil exports. Through its National Gaming and Esports Strategy, announced in 2022, the Saudi government is aiming to support 250 gaming companies and create 39,000 domestic jobs.
The Esports World Cup, which was launched in 2023 and is funded by Saudi Arabia, as well as the 500,000 sq metre gaming and esports hub in the planned Qiddiya City, are core parts of this strategy. The ambition is to bring gaming studios, tournament venues, technical expertise and tourism into the Saudi economy.
Backed by the kingdom’s sovereign wealth fund, Saudi Arabia’s National Gaming and Esports Strategy is targeting a contribution of 50 billion Saudi riyals (US$13.4 billion) to the national GDP by 2030.
As part of these efforts to become the world’s foremost gaming hub, Saudi Arabia has also looked to gain direct stakes in the businesses behind the global esports industry.
The Saudi state-owned Savvy Games Group announced in 2022 that it had acquired ESL Gaming and FACEIT, two of the largest esports tournament organisers, for a combined US$1.5 billion. It later completed the US$4.9 billion acquisition of Scopely, one of the world’s biggest video game developers.
2. Building soft power
Some states are also using esports to generate soft power. China, for instance, has creatively leveraged mobile gaming to turn its traditional culture into something young audiences worldwide can experience and share.
Honor of Kings, a video game played by over 100 million people daily with major international championships and professional regional leagues, provides a direct route for Chinese culture to reach people overseas.
Produced by Chinese firm Tencent, the game draws heavily on Chinese history and cultural heritage. In 2025, the game’s developers created a character costume in collaboration with Fu Xianghong, a prominent Suzhou embroidery artist.
Tencent is not simply acting on instructions from Beijing. The company has strong commercial reasons to expand its audience abroad, as new markets bring significant revenue.
Yet video games intended for release in China must be approved by the government’s National Press and Publication Administration, which reviews content under strict national regulations. This gives the state substantial influence over the Chinese gaming market.
This digital diplomacy does not always mean exporting Chinese culture abroad. Mobile Legends: Bang Bang, a game produced by Shanghai-based company Moonton, shows a subtler route. The game includes characters based on Lapu-Lapu, a Filipino historical figure, and Gatotkaca, a figure from Indonesian mythology.
At the opening ceremony for the 2026 Mobile Legends: Bang Bang World Championship, a professional tournament that was held in the Indonesian capital of Jakarta, actors portraying Gatotkaca appeared in performances. They also took part in city-wide tournament promotions.
Their inclusion is an example of a Chinese gaming company drawing on local history in an attempt to connect with regional audiences and build goodwill overseas.
3. Sanctions and disputes
Esports may look borderless because matches are played in virtual spaces and are hosted through online networks. But the power behind them is rooted in the real world. War and security disputes can thus determine who competes, under which terms and through which platform.
After Russia’s full-scale invasion of Ukraine in 2022, ESL Gaming restricted the participation of esports organisations with supposed links to the Russian government. Affected players were allowed to compete under neutral names, as has been the case in many other sports worldwide.
Then, following the start of the war in Iran, the 2026 Esports World Cup was moved from Riyadh to Paris. The inaugural Esports Nations Cup, which was also set to be held in Saudi Arabia, was also postponed. It has been delayed until 2027, though this may be extended if Yemen’s Houthi rebels continue to escalate their military campaign against Saudi Arabia.
Longstanding tensions between India and China have also had a disruptive effect on the competitive gaming industry. In September 2020, India blocked access to 118 China-linked apps, calling them a threat to national sovereignty and security. This included the games PUBG Mobile and PUBG Mobile Lite.
Before the ban, PUBG Mobile had roughly 30 million daily active users in India. Severing access disrupted a booming local esports ecosystem, putting tournaments on hold and displacing professional players and streamers who had built careers around the game.
The global esports industry has grown to the extent that it rivals many mainstream sports in scale, viewership and cultural reach. For the many countries now battling over who can build, finance, host and govern the industry, this has not gone unnoticed.
