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Jeddah - Yasmine El Tohamy - Dubai: Recent research shows that video gaming can unlock massive business potential for telecom operators in the GCC bloc’s rapidly growing gaming market. And Saudi Arabia is well placed to become a leader in the field as its gaming community looks to gain recognition internationally.
At the global level, gaming championships are becoming as important as any competitive sports events. Amid global coronavirus restrictions, online gaming has helped millions of people stuck at home maintain and build relations.
On a regional level, a new study by Strategy& Middle East, part of the PwC network, suggests that the gaming market in Saudi Arabia will expand rapidly and become the largest among the GCC countries.
Industry observers consider the phenomenon remarkable given the UAE’s leading position in the GCC gaming market as of 2018 and eSports’ relatively recent emergence in Saudi Arabia, spurred on no doubt by the social changes being ushered in by the Vision 2030 reform plan.
The Strategy& Middle East report, titled “Skin in the Game,” showed the GCC gaming market to be undergoing expansion at such a rapid pace that it could be worth $821 million by 2021 - up from $693 million in 2017.
The research covered Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, countries where new consoles released by Sony, Nintendo and Microsoft are snapped up by young men and women who find gaming to be a highly competitive and enjoyable hobby.
“Globally, the gaming industry has grown faster than anyone could have ever imagined,” said Hicham Fadel, a partner with Strategy& Middle East. “It is now a $129 billion-a-year business with an estimated 2.5 billion gamers worldwide.
“In terms of revenue, that is larger than annual worldwide box office, annual music streaming and album sales, and the combined annual take of the top five wealthiest sports leagues.”
In the GCC, the gaming market had expanded rapidly, according to Fadel, but like elsewhere in the world the mobile segment dominated the market when it came to revenue and penetration.
“There is clear growth in eSports events, competitions and investments in the GCC. New venues such as Challenge Arena and Clix gaming lounge in Saudi Arabia and the planned Dubai X-Stadium in the UAE, have sprouted and established several competitions to date, suggesting an increase in popularity,” he added.
The developments are happening as local eSports players are producing world-class results. In 2018, FIFA player Mosaad Al-Dossary, known online as “Msdossary,” became the first Saudi national to win the FIFA eWorld Cup, an event for which more than 20 million gamers attempted to qualify.
A year later, gamers in the Kingdom were thrilled when the country was chosen to host the region’s largest global gaming tournament, PlayerUnknown’s Battlegrounds (PUBG) Mobile Star Challenge World Cup.
VIDEO GAMES IN NUMBERS
* $821 million - Projected value of GCC gaming market in 2021
* $129 billion - Annual value of business globally
* 2.5 billion - Estimated global population of video gamers
* 14 - Median number of hours every week spent playing video games in the UAE
Meanwhile, in the UAE the median number of hours spent playing video games each week has reached 14, according to the study.
Fadel said: “Similar to global growth trends, the gaming market in the GCC has been growing at a significant pace. The growth is fueled by the region’s young demographic, with half of the population under 25.
“Additionally, factors such as high social media engagement, significant video streaming activity, access to latest technologies and access to high-quality infrastructure enable the growth of the gaming market.”
Fadel noted that credit should also be given to governmental and non-governmental associations such as SAFEIS (the Saudi Arabian Federation for Electronic and Intellectual Sports, which was established in the Kingdom in 2017) that were set up to support the growth of gaming.
Kevin Sebastian, a technology and gaming editor in Dubai, said: “Gaming is now a mainstream culture. More people, mainly kids, are watching major gaming sporting tournaments than the Super Bowl.
“While most parents aren’t aware of video games, there’s no mistaking that they are aware what Fortnite is because their kids play it.”
According to Sebastian, movies and TV shows were being produced based on video-games characters because people who played such games as children constituted today the audience for a new entertainment stream.
“With the Middle East being a new market, the region is very switched on when it comes to entertainment adoption,” he told Arab News. “Many brands, including the likes of Intel, Microsoft and Sony PlayStation, are focusing on the Saudi market because of the Kingdom’s efforts to open up on the cultural front.”
Pointing out that Saudi-based video gamers were now coming to the forefront in international tournaments, Sebastian said it was only natural they cultivated that player base.
“You have big game publishers like Ubisoft Middle East, Bandai Namco, Blizzard and many others that are localizing their content for an Arab audience and are putting Arab content creators first.
“Mobile gaming is currently the biggest industry because of the sheer accessibility; anyone can be a gamer,” he added.
Hani Suwwan, business development manager (Middle East and North Africa) at HyperX, said the projections about the gaming market were significant, as the GCC telecommunications industry had seen a drop in voice-related revenue.
A growing gaming market would mean more data being consumed – and offer an opportunity for telecommunications companies to diversify their portfolio.
“Key factors in accelerating the GCC gaming industry’s growth would be the launch of the PlayStation 5 and the new Xbox later this year,” he added. “Upcoming game titles and gaming competitions are key moments to look out for, too.
“There is currently a huge gap in local content, which presents an untapped opportunity for global brands to adapt their content for this market and spearhead localized content.”
Suwwan noted that the Dubai Free Zones Council’s recent announcement of a plan to set up a dedicated gaming free zone underscored the industry’s potential for rapid growth.
“Saudi Arabia is also investing heavily in gaming as it aims to become the gaming capital of the region,” he said.
Going forward, the roll-out of a state-of-the-art infrastructure in fiber and 5G from telecom operators is expected to guarantee high-speed experience and low latency – a vital factor for gamers, which will further attract them and eSports activities, such as competition hosting.
“The market will witness significantly larger investments in video gaming and eSports,” Fadel said.
“In video gaming, investment opportunities will lie in content creation, especially in localizing content, as well as in-game purchases, game hosting and gaming-payment solutions.”
Investment and venture opportunities will lie in eSports teams and players, leagues and competitions hosting, advertising and sponsorship, and in streaming services.
“This will lead to a growth in startups and job opportunities across the gaming sector,” Fadel added. “Why not imagine a gaming or eSports future where teams compete for and trade players for significant amounts of money, and where startups in the region develop hit games than can rival the likes of (video game developers) EA Sports and Riot Games?”
Fadel’s gaming vision is not a certain future, but it is a possible one.
Sebastian expects Saudi Arabia to host large international tournaments going forward in view of the “obvious” untapped potential of the Virtual Reality (VR) market.
“As a gamer who was born and raised in the Middle East, it’s a great source of pride and joy to see where gaming has come in the region,” he said. “From a time, we had to get game CDs in magazines, the Middle East is now getting dedicated servers, store fronts and eSports-based gaming cafes.
“So, it’s fair to say gaming is going to keep growing with every generation.”
With most of the world forced to maintain social distancing, the inherently borderless nature of video games is giving new meaning to the term “socializing.”
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