As Gulf countries continue to pursue plans to diversify their economies and unlock job creation for their relatively young populations, they are increasingly investing in the growing industry around competitive video games known as electronic sports (e-sports).
The MENA gaming market is expected to expand by some 19% between 2019 and 2025, according to strategic consultancy RedSeer, to reach a value of $5bn. The company concluded in a 2022 report that the MENA gaming industry was set to reach “unprecedented heights”. Gaming in the region saw sustained expansion in 2020-21 due to the Covid-19 pandemic – a trend expected to continue as existing gamers increase their spending and time spent playing, in turn bolstering ad revenue.
Deal Pipeline
Several recent deals point to the sizeable growth potential of the e-sports segment in the Gulf, as well as the region’s ambitions for harnessing its rapidly expanding popularity on the global stage to achieve domestic goals.
In February 2023 Savvy Games Group, the gaming unit of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, purchased a $265m stake in China’s Tencent Holdings-backed e-sports company VSPO, becoming its largest equity holder. It also increased its share in Japanese gaming giant Nintendo to 8.3%, after purchasing a 5% position in the company in 2022, making it the largest outside shareholder. That year Savvy Games Group bought a $1bn stake in Swedish gaming company Embracer Group, equivalent to 8.1% of the company’s shares.
These recent deals speak to the Kingdom’s broader ambitions to become a global centre for gaming and e-sports in the coming years. In 2022 Saudi Arabia’s Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud launched the National Gaming and Esports Strategy, in line with its broader Vision 2030 development roadmap, which aims to create 39,000 new jobs in the segment and contribute $13.3bn to GDP.
Meanwhile, in the UAE, Abu Dhabi is similarly looking to explore growth potential in the e-sports industry through its initiative AD Gaming. In February 2023 Abu Dhabi signed a partnership agreement with Chinese game publishing and e-sports company SAWA Group, which specialises in the localisation of global video games. SAWA Group is set to bring its established game library to Arabic speakers across the MENA region through its new collaboration with the AD Gaming initiative.
Oman, for its part, established the Oman Committee for Games and Electronic Sports in 2021 in order to advance the sultanate’s international standing in the field and regulate the industry domestically. The committee hosted the country’s inaugural games and e-sports championship event in late 2021.
Attracting Global Audiences
The Gulf region’s foray into e-sports is part of a concerted effort to invest in sport and entertainment by creating unique content and staging high-profile events that are attractive to a global audience and encourage international visitors, in turn supporting individual countries’ growing tourism and hospitality sectors (see Tourism chapter).
The cancellation of sporting events in Europe and Asia during the course of the pandemic offered countries in the Gulf an opening to host prestigious international athletic competitions. Bahrain, Saudi Arabia and the UAE, for example, all hosted events – from Formula 1 (F1) racing to the Ultimate Fighting Championship and Indian Premier League cricket – while Qatar notably hosted the 2022 FIFA World Cup, as well as an F1 race, in 2021 – with another F1 race planned for October 2023.
The pandemic also prompted GCC countries to launch new sporting ventures, including the LIV Golf tour, an eight-tournament breakaway from the US Professional Golfers’ Association that is backed by the Public Investment Fund. LIV executives believe that its innovative team concept could help the league turn a profit in as little as five years.
E-sports is on a course for a similarly positive growth trajectory, according to many projections. Crown Prince Mohammed bin Salman has cited “providing world-class entertainment” as a goal of the Kingdom’s strategy for the segment, which is popular with the region’s young, internet-savvy generations. More than 20m people are expected to be part of the Saudi gaming community by 2025.
In November 2022 Dubai launched the inaugural Dubai Esports Festival, a 12-day event that featured tournaments in popular video games such as Minecraft and Honor of Kings. The event convened leading gamers, celebrities and industry professionals, competing for some $2m in total prize money.
The event also saw the announcement that the Dubai Multi Commodities Centre (DMCC), the UAE’s largest free trade zone, would launch the DMCC Gaming Centre to support the growing e-sports industry. The DMCC is already home to 50 gaming companies, from game developers and producers, to e-sports teams and tournament organisers. The new DMCC Gaming Centre plans to provide additional space for collaboration, as well as host regular games and tournaments for the industry.
The Qatar Esports Federation, in partnership with Doha-headquartered Quest Esports, opened a similar gaming facility in November 2022 to coincide with the country’s hosting of the 2022 FIFA World Cup. The Gaming District in downtown Doha seeks to build on the momentum of holding five local network tournaments as well as online matches in 2022 for popular games including Fortnite, CS: GO, PUBG Mobile, Dota 2 and FIFA.
Building Synergies & Local Talent
Collaboration and education are at the core of many GCC countries’ recent push into e-sports. Abu Dhabi’s AD Gaming, for example, has partnered with US company Unity Technologies, whose software has been used to create more than 70% of the top-1000 mobile games and over 60% of all available augmented reality and virtual reality content.
AD Gaming has also established a Train the Trainer programme and offers standalone courses that have trained more than 50 professors and 500 students across universities and other academics institutions in the UAE to develop the next generation of game developers, players and professionals. Notably, many such training initiatives in the Gulf predate the pandemic. The Saudi Esports Federation established an e-sports academy to train professional players and develop the industry in 2017. Bahrain has also been investing in game development through regional accelerators such as Flat6Labs, which partnered with local gaming community Unreal Bahrain to offer a bootcamp to train local talent, while Bahrain Polytechnic offers a game development course.
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