Arab News | East Asia’s growing role in the Middle East’s $4.4bn gaming industry

Arab News | East Asia’s growing role in the Middle East’s $4.4bn gaming industry

This article was originally published in Arab News on 17 May 2022.

The Middle East and North Africa’s mobile game industry’s 100 million players are forecast to spend $4.4 billion this year, which has attracted the interest of East Asian gaming firms. One example of this is China’s Tencent Games, the world’s largest game publisher by revenue, which established its regional headquarter in Dubai Internet City in 2019.

Despite accounting for a small portion of the gaming industry’s $93 billion annual global revenue, MENA contains elements that could drive growth. First, the region has a large youth population with an increasing enrolment rate in secondary and college education, particularly in GCC countries.

More than 28 percent of the population in the region is between 15 and 29, representing over 108 million people, the largest number of young people to transition to adulthood in the region’s history, according to think tank Youth Policy. Not surprisingly, these youth people have a high level of digital literacy and a strong interest in technology adoption.

Secondly, the region is undergoing a rapid rise in smartphone penetration and mobile connectivity. Smartphone users in the MENA region will jump by 200 million by 2025 to 565 million, giving the device an adoption rate of nearly 80 percent, said the global mobile operators association GSMA in a report.

Also, the number of mobile gamers far outnumbers personal computer and console gamers in the region. The figures show that 20 percent of Saudi gamers play on PCs or consoles, while 52 percent play on smartphones or tablets, according to a YouGov survey. The preference for mobile games is even more apparent in Egypt as just 14 percent of gamers play on PCs or consoles, compared to 58 percent who use a smartphone or tablet.

Strong support from the government, particularly in GCC countries, has driven the profitability in the MENA mobile gaming sector. Saudi Arabia, for example, launched Ignite last year, a $1.1 billion project aiming to boost digital content and transform the country into a world digital entertainment and media production powerhouse. The program seeks to support not only local but also international companies and start-ups in the sector.

East Asian game companies have so far proved popular in the region, with almost half of the top 20 grossing mobile games in Saudi Arabia and the UAE coming from East Asian firms.

Companies in the region will also benefit from the region’s pioneering drive for 5G connectivity, which will provide mobile gamers with a smoother user experience.

However, despite the development of the region’s gaming industry, local governments have gradually tightened their grip on digital content platforms.

The Saudi Communications and Information Technology Commission, began a public consultation on the second draft of the Kingdom’s Digital Content Platforms Regulations in February. The current draft says gaming platforms must comply with all of its provisions, including the appointment of a platform compliance officer to liaise with the authority in all official communications.

Also, the UAE is drafting new legislation to amend its Federal Law No. 15 of 1980 regarding media and publications this year, which will include tighter media monitoring. And in January, the introduction of Emirate’s cybercrime law, imposes imprisonment and a fine of between AED250,000 and AED500,000 on anyone found to have supervised, established, publicized or operated gambling websites.

Considering the blurred boundaries between online gaming and gambling, gaming firms should contact the government to make sure they understand where it has drawn the line.

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