The Middle East is charging full steam ahead, shaping the future of gaming and esports.
In 2022, Saudi Arabia’s Public Investment Fund (PIF) poured a whopping $3 billion into the industry. But that’s not all, PIF has committed a staggering $38 billion to its very own gaming powerhouse, Savvy Games Group (SGG).
In this high-stakes game, there have already been multiple acquisitions in the gaming and esports arenas including big names such a Embracer Group, Scopely, ESL, FACEIT, and VSPO. The region means business and is determined to conquer the leaderboard.
And let’s not forget about Abu Dhabi Gaming, which has gone all out by creating a dedicated gaming and esports hub. Picture a gaming paradise with irresistible incentives, luring in both local talent and international powerhouses. It’s a gamer’s dream come true!
According to the latest gaming report by BCG, the Middle East boasts an army of gaming enthusiasts. More than 60 percent of the population can’t resist the allure of gaming. That’s one of the highest shares of gaming mobile app downloads out there, hitting a staggering 50 percent (compared to the paltry global average of 40 percent). It’s crystal clear why the region is in it for the long haul. Saudi Arabia is even flexing its gaming muscles by announcing a bold gaming and esports strategy, while the UAE is creating not one, but two gaming centres to attract global companies.
Gaming – not just a passing trend in the Middle East
If you thought streaming was just a passing fad, think again. The Middle East is breaking records with its sky-high growth rate of game streaming. With a 24.5 percent compound annual growth rate (CAGR). By 2025, game streaming in the region is on track to attract an estimated 200 million users by 2025. That’s three times the growth rate of China, the current leaderboard champ.
“The Middle East is a key player in the global gaming industry, with an impressive penetration rate and a strong commitment from governments to invest in the sector,” said Dr. Alexander Schudey, Managing Director & Partner at BCG.
“The region’s focus on gaming and the establishment of dedicated gaming hubs makes it an attractive destination for global gaming companies. The young and digitally savvy population, particularly in Saudi Arabia, where 70 percent of the population is below the age of 30, combined with higher disposable incomes and a preference for indoor activities due to the hot weather, further contribute to the region’s thriving gaming ecosystem.”
But wait, there’s more! Gaming and esports aren’t just for the couch warriors—they’re also poised to boost the tourism sector in the UAE and Saudi Arabia. Imagine the possibilities of marketing these mind-blowing experiences to a global audience. It’s a unique opportunity to put the Middle East on the map and show the world what they’ve been missing.
4 trends that will impacts Middle East’s gaming industry
- The gaming industry is diversifying its audience as Generation Y enters their 30s and children and youth continue to drive growth. Generation Z, known for their balanced engagement with gaming and video watching, is expected to make gaming the leading form of entertainment in terms of popularity and time spent.
- In gaming, innovation takes a unique path driven by consumer communities. Platforms like Roblox and Minecraft empower users to create and innovate within games, seen in examples like the Squid Game-inspired game on Roblox and advancements in game engine technology by Epic and Unity. Publishers swiftly adopt and commercialise user-driven innovations, such as incorporating MOBA features into games like Overwatch. Consumer-driven innovation is expected to continue, especially with platforms facilitating game development and creativity.
- The gaming industry is experiencing a surge of mergers and acquisitions (M&A) as major players acquire studios and gaming-related assets globally. These companies employ two primary M&A strategies: consolidating game development and expanding internal capabilities, which grants publishers access to technologies in areas like in-game advertising and motion tracking, leading to enhanced gaming experiences and increased revenue streams.
- New use cases. Gaming has been at the forefront of the revolutionary concept of the metaverse, transforming digital experiences. Integration of game engines, motion tracking, and other technologies has enhanced the capabilities of the metaverse, pushing the boundaries of what can be achieved within this digital realm.
