Two decades ago, gaming was dominated by the Nintendo Game Boy, Sega Game Gear, and Atari Lynx. With their charming pixelated displays and interchangeable cartridges, these brick-shaped consoles offered similar entertainment but left us wondering, “When will it get bigger and better?”

But the advent of the PlayStation marked a significant evolution, bringing addictive experiences and sharp graphics into our living rooms. Blockbuster games with intricate storylines and realistic simulations redefined interactive storytelling. This technological leap, coupled with the rise of online networks, transformed gaming into a thriving ecosystem.

With the surge in investment, the gaming industry quickly moved from a niche market to generating revenue and contributing significantly to GDP. At the same time, regions like the UAE and Saudi Arabia experienced rapid growth, positioning themselves as key players in the global gaming market. But how will the continued expansion of the gaming sector influence the region’s economic future?

THE GAMING BOOM 

The MENA region is experiencing an unprecedented surge in its gaming market, highlighted by Youssef Raad, Gaming Lead at GroupM MENA, as the world’s fastest-growing gaming market. Currently, there are over 150 million gamers, a number that increased by 10% in 2023. The market is valued at $500 million and is forecasted to double to $1 billion by 2029, spurring significant governmental investments in the gaming sector.

For instance, the UAE has allocated $1 billion toward eSports development, including establishing an Esports Island in Abu Dhabi, while Saudi Arabia is injecting $38 billion into the gaming industry. 

“These substantial investments are expected to attract gaming companies and publishers to establish a presence in the region, transforming it into a major gaming hub and creating numerous opportunities for consumers, advertisers, and gaming industry experts.”

The global gaming community has grown significantly, with around 3 billion active gamers, a 32% increase over seven years, projected to reach 3.32 billion by 2024. In the MENA region, gamers are expected to rise to 88 million by 2026, up from 67.4 million last year. Yahsir Qureshi, VP Studio – Riyadh at Sandsoft Games, asserts the industry is only moving upwards.

Kevin Sebastian, Head of Content and Partnerships at ITP Gaming, points out that infrastructure development, including gaming cafes, eSports arenas, and technology parks, has further driven economic growth. He says, “We’re already seeing governments from both the UAE and Saudi Arabia support gaming as part of their national strategy, with initiatives like the Dubai Program for Gaming and the Esports World Cup Foundation in Saudi Arabia being prime examples.”

The Dubai Program for Gaming 2033 aims for ambitious goals: creating 30,000 jobs, boosting GDP by $1 billion, and establishing global gaming dominance. Meanwhile, Saudi Arabia also heavily invests in setting up gaming studios and eSports arenas. Savvy Games Group recently made significant acquisitions totaling $6.4 billion. Now, their focus is on forming partnerships with Japanese game developers, potentially luring them to establish local offices.

Mahmoud Ziater, Marketing & Sales Manager at True Gaming, highlights Morocco’s ambition with the creation of Gaming City in Rabat, aiming to position itself as a premier gaming hub in Africa and the MENA region.

The MENA region’s gaming industry is growing significantly, driven by international gaming companies and local stakeholders like payment providers and telecom operators. Houcem Maiza, CEO at T7D Gaming, notes that this growth has led to a substantial increase in average revenue per user, nearing two digits compared to less than five dollars four years ago.

The impact of the gaming industry on the Middle East’s economy goes far beyond entertainment, emphasizes Thamer Albutairi, Head of E-sports and Gaming at Mobily. “It’s a powerful driver of revenue generation, job creation, economic diversification, and technological innovation,” he explains, “paving the way for a more prosperous and globally connected future for the region.”

GAMING VS OTHER ENTERTAINMENT SECTORS 

Sebastian highlights the gaming industry’s expansive reach, surpassing the combined size of the movie and music industries and continuing to experience rapid growth. 

While it may not have historically received as much mainstream attention as the film and music sectors, this is changing due to the vast number of active gamers. As of this year, it’s estimated that there are 3.32 billion active gamers globally. “This figure represents a significant portion of the current population.”

The gaming industry has created jobs in various sectors, such as game development, marketing, and esports, with major companies setting up regional offices. Gaming events attract tourists, boosting sectors like hospitality and retail. Investments in startups drive innovation, supported by both governments and private investors.

Raad notes that the global gaming industry was worth $250 billion last year, surpassing the combined value of the music and film industries, which totaled $120 billion in 2023. This surge of interest in gaming is expected to grow as more brands recognize the value of collaborations with streamers, esports teams, gaming events, and advertising on platforms like Twitch, Roblox, and mobile games. Similarly, the MENA region is experiencing rapid growth in the gaming sector compared to other markets.

Mayuri Prasad, Business Partnership Lead at Stream Shreek, highlights gaming’s strong economic impact in the Middle East due to its wide audience reach, engaged community, accessibility, and growth potential. Gaming appeals to a broad demographic, especially the youth, ensuring a larger market and consistent revenue from in-game purchases and esports. Its accessibility through mobile platforms makes it cost-effective, attracting a significant portion of the population.

“With the global gaming industry booming, the Middle East stands out as a dynamic and high-growth market, driving economic innovation in the region.”

WINNING WITH LOCALISATION 

Qureshi highlights Arabic’s importance, ranking among the world’s top five spoken languages. He predicts the MENA gaming revenue to reach $6 billion by 2027. Delving into audience segmentation, he emphasizes three key demographics: 16-24, 25-34, and 35-44. Millennials in the UAE and Saudi Arabia comprise the majority of gamers. Saudi Arabia boasts the highest number of Gen Z gamers (23%) due to its youthful population. The gender split in the region exceeds the global average, with notable female participation. Qureshi stresses the need for culturally relevant content to ensure future success, emphasizing authenticity in representing the region’s audience.

Raad echoes the same sentiment, emphasizing the vital role of localization in gaming, similar to any marketing campaign. He highlights gaming’s immersive nature and extended attention spans, allowing advertisers to interact and connect with gamers through culturally relevant experiences.

Sebastian also notes that major game publishers and platform holders, including Sony PlayStation, Ubisoft, Riot Games, Unity, Tencent, Bandai Namco, etc., have established MENA regional offices. They are adopting a more strategic approach to engaging with these markets, focusing on representation and catering to local gamers’ specific needs and preferences. 

Middle Eastern markets hold a goldmine for game companies due to their large, young populations. These demographics boast gamers who practically grew up with gaming, actively voiced their preferences and demonstrated a strong willingness to spend. Crucially, a significant portion of this potential hinges on localization – catering to these gamers’ desire for games in their native language.

Sony PlayStation’s video games receive comprehensive Arabic localization, which is evident in the games themselves and their marketing strategies. This commitment to Arabic localization emphasizes the significant value of this market, encouraging game publishers to take notice and prioritize their presence in the region.

THE CONTRIBUTION TO THE ECONOMY 

The gaming industry is vital to the Middle East’s economy, driving job creation, investment, and technological advancement. Significant investments in gaming infrastructure and events, especially in Saudi Arabia and the UAE, attract international attention and tourism. Local game production studios also boost economic growth by creating jobs and exporting digital goods. Issa Fakhouri, Partnerships Manager at Savvy Games Group, highlights the increasing presence of international production studios in the region, further stimulating economic activity.

Ratko Bozovic, VP of Marketing at Sandsoft Games, reflects on recent shifts in the gaming sector’s investment landscape, suggesting that the end of the zero-interest-rate era has led to decreased attractiveness for investments over the past 18 months. However, Bozovic remains optimistic about the industry’s cyclical nature, anticipating a resurgence of activity and investments in the years to come. He emphasizes the Middle East’s potential as a key player in this revival, citing proactive investments by the governments of Saudi Arabia and the UAE in infrastructure and local game development.

Ziater also adds, “A key area of interest for investors is the development of local game studios. The rise in regional talent and cultural relevance creates a significant opportunity to invest in or establish game development studios. These studios can focus on creating mobile games that resonate with local audiences and possess the potential for regional or even global success.”

Investment in gaming infrastructure and technology, especially in telecommunications and internet service providers, is crucial to meet the rising demand for online gaming. Ziater highlights the potential of cloud gaming as internet speeds improve, offering lucrative opportunities for investors. He also sees potential in organizing gaming conventions and expos, attracting regional and international attention, showcasing new games and technologies, and introducing non-endemic brands to the gaming community.

“Gaming content creation is a key investment opportunity,” emphasizes Ziater. Beyond sponsorships with gaming influencers and esports teams, platforms supporting gaming content creators, like streaming and video production, offer significant potential. He notes the rapid growth in this sector, allowing investors to engage with a growing community of gaming influencers.

THE RISE OF VR, AR, AND BLOCKCHAIN

The Middle Eastern gaming industry leads in technological innovation, embracing VR, AR, and blockchain to pioneer groundbreaking gaming experiences. Albutairi emphasizes the anticipation of even more thrilling advancements as these technologies mature and become more accessible.

Bozovic acknowledges that while the MENA region may have lagged behind global gaming trends in some areas, pioneers like Maysalward from Jordan have led the way in upcoming trends, such as mobile gaming, since 2003. With the region becoming more conducive to innovation, Bozovic anticipates even more significant advancements in the future.

Qureshi emphasizes the prevalence of mobile games in the region, making up 58% of the market, followed by console games at 20%, and traditional PC games at 3%. Despite this dominance, he emphasizes the significance of new technologies like AR, VR, metaverse, and blockchain in encouraging innovation within the gaming sector, with ongoing investments in these areas.

Prasad believes Middle Eastern gaming companies’ forward-thinking approach to embracing new technologies positions them as leaders in the global gaming industry. VR arcades like Dubai’s VR Park showcase the region’s commitment to innovation, offering immersive gaming experiences. While AR integration is still emerging, there’s potential for location-based AR games leveraging the region’s landmarks. Additionally, blockchain technology is explored to facilitate secure in-game transactions, enabling players to own digital assets and fostering robust in-game economies. 

GAMING ECONOMY BOOSTING THE GDP 

Maiza anticipates gaming’s GDP contribution in the Middle East surpassing 1% soon, while Fakhouri highlights its crucial role in economic diversification under initiatives like Saudi Arabia’s Vision 2030. Raad projects significant contributions to the GDP of the UAE and Saudi Arabia, with strategic gaming investments expected to contribute $1 billion and $13 billion by 2030. According to Raad, as the world transitions towards more immersive experiences, countries within the region will continue to invest in various aspects of the gaming industry, shaping the ‘next era’ of media.

Sebastian highlights the growing impact of the gaming industry on GDP, notably in key regions such as Saudi Arabia, UAE, and Egypt. In 2023, these areas generated $1.9 billion in revenue, marking a 7.8% year-over-year increase and a projected growth of $2.9 billion by 2028. 

Despite global contractions, the MENA region emerges as the second-fastest growing region in revenue and gamers, signaling its vast potential and need for heightened global investment and attention.