Chinese esports company VSPO, backed by Tencent Holdings Ltd, said on Thursday Saudi Arabia's sovereign wealth fund has bought a stake worth $265 million in the company, as the kingdom continues its push in the gaming market.

Saudi's Public Investment Fund will take a minority stake in VSPO through its gaming unit Savvy Games Group and become the Chinese company's single largest shareholder, VSPO said.

Saudi has been expanding its investments in the gaming industry, taking stakes in Japan's Nintendo Co and Swedish gaming group Embracer last year.

Saudi Crown Prince Mohammed bin Salman in September last year has laid out a $38 billion strategy for Savvy Games Group, with the ambitious strategy of aiming to make Saudi "the ultimate global hub for the games and esports sector by 2030".

VSPO, which has sought U.S. and Hong Kong listings before, said Savvy's investment would help it accelerate the growth of mobile esports "with a particular focus" on Saudi. Savvy said the investment would help it diversify.

"This is a significant transaction for Savvy, and gives us a major foothold in the important Asia region. We are looking forward to diversifying our geographic footprint alongside VSPO," Savvy's Chief Executive Officer Brian Ward said.

(Reporting by Rahat Sandhu in Bengaluru and Josh Ye; Editing by Shilpi Majumdar)