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The Middle East boasts the world's fastest growing gaming market, with a whopping 25 percent annual revenue growth. But ahead of the Digital Games Conference (DGC) in Dubai, insiders tell Arabian Business the region underinvests in its gamers

Computer says go: the rise of gaming in the Middle East

Dubai is mulling plans for a feasibility study into the possibility of setting up a free zone dedicated to gaming. Image: ITP Media Group

Gaming and the Middle East might just be a match made in  tech heaven. You’ve got a youthful, tech-savvy population inclined to find modes of indoor entertainment for a substantial part of the year when scorching hot temperatures leave little else to do. It’s no wonder the sector is experiencing 25 percent annual growth.

While gaming has its fair share of detractors concerned with its addictive qualities - and the perception that it is simply a waste of time - it has only continued to grow in popularity, thanks in part to platforms like PlayStation, XBox and Nintendo, standard personal computers (PCs) tablets and of course, smartphones, with 2 billion people globally falling into the category of “gamer” according to WePC. The rise of esports, which is gaming taken to a professional standard with “athletes” who make a living playing games and experience something of the rigours of traditional sport, has also meant that negative perceptions are beginning to change.

A game far from over

The sector has massive audience potential particularly in the region through smartphone usage, which doubled in the Middle East and North Africa region between 2014 and 2019. Habib Chams, head of Digital Games Conferencing, ITP Gaming, puts the value of the regional market at up to $4bn annually, with the potential to double within the next few years, while the global market is valued at $140bn, three times that of the Hollywood film industry.

112 million players.

While some high profile games cannot be played in Middle Eastern territories due to content restrictions, most of the biggest hitters are present, including League of Legends, which pulls in annual revenues of $1.6 bn globally according to Inc, and the ubiquitous Candy Crush Saga, which took $930m between August 2017 and July 2018.

Chams, who is behind DGC Dubai, says the region needs to set about strengthening an eco-system so that home grown publishers and developers have the opportunity to achieve the same phenomenal success as their counterparts in North America, Europe and Asia. He says he is aware that one of the world’s biggest games publishers had attempted to set up offices in the region, but had not been able to find the talent to do so.

“We are having this whole growth, this whole interest, but we are not following up with the demand of what this needs, which is a lot of skills. There is currently no university or institute that is dedicated to teaching game degrees. I am sure today that the younger generation would be more than happy to take that academic route, but this is part of the challenge,” he says.

Earned $727m in 2019.

While the undeveloped ecosystem means homegrown game developers focus on selling within the region, Chams says global big hitters are profiting, particularly when they introduce locally focused content, be it culturally attuned to the Middle East, relating to its history, or, in the Arabic language, with high profile games Fortnite and Clash of Clans having recently introduced Arabic language options. This is particularly successful in the Middle East’s biggest games market, Saudi Arabia.

“The more games are localised, the more we have seen that they are doing better. If a game is translated into Arabic, if some games are translated into history with Arabic content or Arabic history, they are also doing better,” Chams says, with some Chinese developers such as Menamobile and Tap4Fun now developing games solely for the Middle Eastern market.

Back to virtual reality

While the Middle East’s population may be small in comparison to Asia, in the Gulf particularly, its high gross domestic product (GDP) per capita, means that users have the disposable income to invest in games.

247 million monthly active users.

Meanwhile, the UAE is taking strides forward in the fields of virtual reality (VR) gaming, having already invested in making it part of its location-based entertainment offering, specifically at The Dubai Mall, home to the world’s largest VR Park. Abu Dhabi is also set to open the world’s first esports academy, along with its own VR Park and events space at Al Qana, a waterfront entertainment destination currently in development and expected to be completed in December.

Karim Ibrahim, CEO of Beirut-based start-up Robocom, is a proponent of VR, believing it to be the inevitable future of gaming, even though it has yet to achieve its expected status in the sector.

Ibrahim, whose company specialises in both VR hardware and game development, likened the likely progression to VR in gaming to that of the rapid development of mobile phone technology, with users switching from simple voice and text enabled devices to internet-ready smartphones within less than a generation. So it will be with VR, he says.

The gaming industry is a $148.8bn global enterprise – and is continuing its upward trajectory

“Give gamers 10 years, they are going to look at the PC like sticks and stones, and ask: ‘How did we play games on those?’ They are going to want a more immersive experience,” he says.

Ibrahim also disagrees with the wisdom that the lack of development of VR hardware, with bulky, uncomfortable headsets for example, has slowed growth, saying billions are being poured into their development by giants including Samsung, meaning the technology has now reached a stage of maturity. But, the lack of growth has been caused by VR not having the community in place, he says.

“The problem with VR is that it never did attract customers to location-based entertainment [such as arcades] for them to create a community and interact with each other, to make it mainstream enough for it to become a household product, so that people would start shifting into VR, which is the evident future of gaming. The only way I realised that that would be possible is to bring on the big brands to join forces with location-based entertainment.”

Karim Ibrahim, CEO of Beirut-based start-up Robocom

Robocom has done that through partnering with the likes of Hasbro to produce a Transformers VR, in which users experience the game as Transformer character - morphing from the car into the Autobot. Another concept in the making is based on Back to the Future, in which users will experience a time capsule-style simulation travelling through different periods of history.

Ibrahim’s company is one of five VR experience providers partnering with The Dubai Mall for its VR Park, and it will be the exclusive provider for Pixel Planet, a 4,000 sq m VR Park, esports academy and events space for gaming and technology at Abu Dhabi’s Al Qana development. Finally,  Robocom is also the VR partner for another Pixel Planet due to open at the American Dream Mall in in New Jersey in the USA.

Ibrahim echoes Chams’ concerns that an ecosystem which can allow the gaming industry to develop is not yet in place in the Middle East: “If we [in the Middle East] were to compare ourselves with Europe or the USA, or even Asia, they are very community-oriented, they really invest in their communities. For example, they have gaming centres where you can learn to develop games for free, they have online platforms where you can connect. They have meet ups at schools, it’s become part of the educational curriculum,” he says, adding that instead of considering time spent playing games as wasted, the region needs to understand that they must find ways to use games so they are beneficial.

Spanning 4,000 sq m, VR Park in Dubai Mall is the largest indoor virtual reality park in the world

“We do not have that level of awareness as a Middle Eastern culture, and this is the fundamental problem with the growth here. Because people think if you are playing a game, you are wasting your time, but you are not wasting your time, this is how people in 2020 interact, this is how people consume their information,” he explains.

As a VR proponent, it is unsurprising that Ibrahim cites VR content development as a key opportunity in the Middle East: “We are truly shining in this regard,” he says.

“And we can highlight our success as an industry in content creation. If I were advising anyone to get into anything it would be to specialise in VR content creation. Content creation via social media was the hyped thing to do, but in the future, it will be for VR, and I guarantee that.”

He adds that VR as part of gaming is important for the Middle East thanks to its ability to unite.

The UAE is the biggest e-gaming market in the Middle East

“In the gaming world, it is truly the only place in the world where your skin colour does not matter, your background does not matter, your ethnicity, religion, how much money you make, it is just about enjoying your time with the person right in front of you,” Ibrahim says.

“The more connectivity, the more responsiveness, the more interactivity there is, the more immersed, the better connection you have.  I do think it’s very, very important for the region, to be able to unite us as one.”

Coronavirus (Covid-19) and its impact on gaming

The impact of the coronavirus outbreak is being felt across all industries. One of the region’s highest profile games industry events, DGC Dubai, due to take place in April, has been postponed until June 22-22, following news that Game Developers Conference (GDC) in San Francisco, has also been postponed.

But, gaming itself is one of the industries that seems likely to emerge not only unscathed by economic shockwaves caused by the outbreak but having experienced significant growth.

When it takes place in June, DGC Dubai, an annual conference which fosters relationships between international publishers and developers with local companies and creates opportunities to advance young developers, will offer a video conferencing option across its B2B meeting platforms and live broadcast of conference sessions.

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