The Middle East Gaming Sector Is a Potential Goldmine for US Technology Start-Ups
The Middle East has become a hot spot for foreign investors since countries in the region started exploring new ways to generate revenue.
They understand that relying on their vast oil reserve does not cut it anymore. They need to dip their toes in several sectors to create multiple streams of income.
One of the new frontiers making waves in the Middle East is the gaming market. Several nations have pumped billions of dollars into the industry to put the region on the map.
Saudi Arabia, the United Arab Emirates (UAE) and Qatar are among the countries redefining the Middle East’s global identity thanks to a booming digital economy.
The region’s gaming sector is a potential goldmine waiting to be tapped, and its open-door policy makes it an appealing proposition for US-based start-ups.
A Government Initiative Backed By Youthful Exuberance
Governments in the Middle East are actively nurturing the gaming sector as part of their long-term plans to diversify their economies.
Saudi Arabia devised the Vision 2030 plan aimed at reducing its dependence on oil, and digital entertainment is one of many sectors it decided to explore.
The Kingdom’s gaming strategy is spearheaded by Savvy Games Group, a company backed by the Saudi Public Investment Fund (PIF).
They have already invested a whopping $37.8 billion to develop the industry. That includes building game studios, developing infrastructure and hosting eSports tournaments.
Saudi Arabia’s investment in the gaming sector is already paying off. The country is planning to host the inaugural Olympic eSports Games, which will only add to its appeal as a global hub for gaming.
Their investment is also poised to contribute to the nation’s gross domestic product (GDP). Experts believe that the gaming sector will contribute up to $13.3bn to Saudi Arabia’s GDP and create nearly 40,000 jobs.
The Saudis are not the only ones making moves. The UAE has an ambitious ‘Programme for Gaming 2033’ that is expected to contribute $1bn to the emirate’s GDP by 2033 and create 30,000 jobs.
The UAE has also introduced a Dubai Gaming Visa to lure talent from around the world. That’s how far they’re willing to go to be taken seriously on the global stage.
There are several reasons why the Middle Eastern gaming market is booming, but its young, tech-savvy population certainly helps.
That is particularly obvious in Saudi Arabia, where nearly 70 percent of the population is aged under 30. Throw in a rising disposable income, widespread access to smartphones and the internet, and it becomes clear why the youth are the pillar of entertainment in the region.
According to a 2024 report by PricewaterhouseCoopers (PwC), the number of gamers in the Middle East and North Africa (MENA) will increase from 68 million in 2022 to a projected 87m by 2026.
This will be music to the ears of foreign investors and tech start-ups in the US looking to make inroads into the Middle Eastern gaming market.
The region’s open-door policy basically rolls out the red carpet for interested parties to swoop in.
Their infrastructure and youthful exuberance make it a ready-made customer base with a hunger for new experiences. US tech start-ups can provide that.
A Market Up for Grabs & the Possibility of New Frontiers
The Middle East has developed an appetite for cutting-edge tech in gaming, which opens the door for new frontiers to be explored.
One of the most intriguing developments in the Middle Eastern gaming sector is the growth of the iGaming and online casino industry.
Gambling has traditionally been forbidden in the region, but that changed when the UAE set up a regulatory body to oversee the sector.
This has opened the door for online casino operators to obtain licences and legally offer their range of services to Arab players.
It is still in its infancy compared to other markets, but gambling is now popular in the Middle East. It could be the perfect venture for US start-ups who specialise in iGaming tech.
Companies who are into cloud gaming are also in for a treat. Playing games on the cloud does not require gamers to buy expensive hardware. All they need is access to the internet to experience high-quality gaming on multiple devices.
Considering that more than three-quarters of gamers use smartphones or tablets, US start-ups that offer cloud gaming solutions are all but guaranteed to thrive.
The eSports culture has shown signs of being another overlooked goldmine. Professional gaming has now become a massive success in the MENA region.
According to a recent Dentsu report, 22% of gamers in MENA-3 countries are interested in eSports – that’s 12% more than the global average.
Consumer behaviour also reflects the growing enthusiasm for eSports. Around 55% of gamers in Saudi Arabia have bought games after seeing them in an advert.
The eSports industry is becoming a mainstream part of the media diet for MENA youths, and it is another area where US start-ups could make their mark.