IDB Considering Investment in Interactive Games

It's a $13 billion a year sector growing like a weed, points out Ami Erel

IDB is the biggest holding company in Israel, and evidently harbors ambitions to grow even more.

"The games sector turns over $13 billion a year around the world and is in constant growth, and there is no reason that Israeli companies should not be there," Ami Erel, the CEO of IDB (TASE: IDBH)  and the chairman of the Manufacturers' Association of Israel, told TheMarker last weekend.

 Ami Erel

According to Erel, IDB Investments has started examining investments potential gaming investments for its subsidiaries Internet provider Netvision and cellular operator Cellcom.But it seems there are almost no companies in Israel that develop interactive games.

"This is a market with infinite potential, and we are certainly willing to invest in it. The matter interests IDB Investments since it is big. I see Elron investing in it just like other high tech investments. I see Netvision and Cellcom entering it on the content side. Our companies will invest if there is someone to invest in," explained Erel. 

He added that according to information received by the Manufacturers' Association, the number of Israeli startups operating in the sector is small. In order to encourage the sector, which is growing around the world, the chief scientist in the Ministry of Industry and Trade needs to become interested in the matter.

"The investment does not start with large companies. I am not the government who will build a greenhouse for gaming companies. The push needs to come from the government," said Erel.

He also emphasized that he was not talking about gambling, but interactive games, which fascinate large numbers of players of all ages, including adults, who are glued to their screens as part of their leisure culture. For now, most of the gaming activity takes place on the computer screen, but there are also cellular companies who are active in the business. For example, Erel cited a cellular firm that bought the rights to Nintendo games for $130 million.

"In Israel all the elements to develop games exist: imagination, software and video capabilities. Our weakness is the chief scientist, who is not helping us to enter new worlds," said Erel. He explained that the chief scientist must think about new areas to support alongside the traditional high tech sectors - and the gaming sector, along with the water industry, is one of them.