The global esports industry spent the early 2020s in a state of exuberant, venture-capital-fuelled denial, followed by a crushing correction known as the “Esports Winter.” By late 2024, the industry’s broken business model (reliant on volatile advertising revenue and disconnected from direct monetisation) had left legacy organisations on the brink of insolvency. The market failure was absolute, and into this vacuum stepped the Kingdom of Saudi Arabia as a systemic saviour.
By late 2025, the narrative shifted from the spectacle of the Esports World Cup (EWC) to the structural reality of the “Club Support Programme” (CSP). This programme has effectively centralised the economic gravity of the industry in Riyadh, creating a “Club Programme Economy” where financial survival is predicated on alignment with “Saudi Vision 2030.”
The ‘Esports Winter’
To understand the efficacy of the Saudi intervention, one must first understand the depth of the crisis it addressed. The “Esports Winter” was an existential purging of the industry’s excesses. Analysts and industry insiders had long warned of an “overreliance on sponsorship as a revenue stream,” a vulnerability that became fatal when global inflation rose, and advertisers cut discretionary spending. The result was catastrophic for organisations that had prioritised growth over profitability.
By 2025, the landscape was littered with the wreckage of this correction. Major organisations like “Counter Logic Gaming” and “The Guard” had shut down operations, while others reported annual losses in the millions.
The stock price of FaZe Clan, once the poster child of esports unicorn status, collapsed, leading to a fire-sale acquisition by GameSquare to avoid total insolvency. The industry was facing a “capital drought,” with investment dropping by approximately 60% by the third quarter of 2025. Player engagement metrics plummeted, and the “hype” that had sustained valuations evaporated.
It was in this frozen landscape that the “Esports World Cup Foundation,” backed by the Public Investment Fund (PIF), deployed its capital. The timing was impeccable. Had the intervention come two years earlier, it might have been viewed as just another sponsorship deal. This leverage allowed Riyadh to dictate terms that would have been unthinkable in a healthier market.
Mechanics Of The ‘Club Support Programme’
The “Club Support Programme” is the engine of this new economy. Unlike traditional prize pools, which are meritocratic and uncertain, the CSP offers guaranteed operational liquidity. In late 2025, the EWCF expanded the programme for the 2026 cycle, committing an additional $20 million to the ecosystem to support 40 leading clubs.
The structure of the programme is designed to reshape organisational behaviour. Participating clubs receive “six-figure funding” annually. In an industry where cash flow is a chronic struggle, this guaranteed revenue acts as a stabiliser, allowing clubs to pay salaries and rent. However, the funding is a purchase of services. The clubs are required to “grow their audiences,” “drive sustainable growth,” and, crucially, populate the tournaments of the EWC.
The programme utilises a “points” system that fundamentally alters the competitive landscape. The “Club Championship” awards points based on a club’s performance across multiple game titles, with a dedicated prize pool of $27 million for the top-performing organisations. This forces clubs to expand horizontally.
A team that historically specialised in “Counter-Strike” must now field rosters in “Mobile Legends: Bang Bang,” “Rocket League,” or “Tekken” to remain competitive in the Club Championship standings. This artificial demand stimulates the player market across 24 different game titles, effectively subsidising the entire ecosystem.
This cross-game mandate is the “stick” hidden within the “carrot.” To access the millions in prize money and the six-figure subsidies, clubs must scale up their operations, hiring more players and staff than their organic revenue would justify. This scale makes them even more dependent on the CSP funding to sustain the expanded payroll, tightening the “golden handcuffs.”
The Riyadh HQ Mandate
The most significant “2025 Angle” of this programme is the implicit and explicit requirement for physical presence. The Saudi government has long signalled its intention to stop contracting with companies that do not have regional headquarters in the Kingdom. The CSP applies this logic to esports. While the program’s public literature emphasises “global reach,” the operational reality is a push for localisation.
International clubs are effectively being paid to set up local HQs in Riyadh. This is about “developing local talent” and “fan engagement” within the Kingdom. The “Super Fan Programme,” which brought 2,000 fans to Riyadh in 2025, is part of this activation. Clubs are incentivised to host boot camps, content studios, and meet-and-greets in Boulevard City, the home of the EWC festival.
This requirement creates a tangible transfer of infrastructure. We see this trend mirrored in the broader corporate sector, where entities like “Flash Entertainment” and “Wipro” have inaugurated Riyadh headquarters to align with “Vision 2030” and “Saudization” goals.
For esports clubs, the pressure is existential. Managers describe the arrangement as a trade-off. They get the guaranteed revenue they need to survive the “Esports Winter,” but in exchange, they must become de facto ambassadors for the Saudi gaming sector, integrating their brands with the local market.
The “Riyadh Requirement” ensures that the subsidy does not just leak out to Los Angeles or Berlin. It forces the recirculation of that capital within the Saudi economy. The clubs hire local staff, rent local facilities, and engage with local telecom partners like STC. It is a classic import-substitution strategy applied to a digital service industry.
Salvation Or Subjugation?
Is Riyadh buying the industry? The answer, supported by the data, is an emphatic yes. But the more nuanced question is whether this purchase is predatory or protective.
Critics, particularly in Western media, label this “sportswashing,” pointing to the use of entertainment to distract from human rights records. They argue that the industry is selling its soul for oil money. However, the view from inside the industry is different. For club managers facing the “Esports Winter,” Riyadh is not a conqueror but a white knight. The “broken business model” of esports had no other fix. The private market had walked away. The only available capital was sovereign.
In 2025, Saudi Arabia is saving the esports industry from its own financial incompetence, but it is exacting a price: sovereignty. The industry is now a centralised, state-subsidised sector with its capital in Riyadh. The “golden handcuffs” are real, but as one industry insider noted, they are the only thing keeping the patient alive.