An Overview and Potential of Gametech in the Middle East and Africa Region

https://thefintechtimes.com/an-overview-and-potential-of-gametech-in-the-middle-east-and-africa-region/
http://thefintechtimes.com/wp-content/uploads/2021/01/iStock-1155415303.jpg?#

Gametech in the Middle East and Africa (MEA) region has strong potential – home to a young population and, in parts of the region, a digitally savvy one.

The retail industry is worth over $3.5 trillion worldwide (pre-COVID-19 figures) and the video game market hopes to carve out a small slice, expected to be worth around $300 billion by 2025. Gaming has hit global headlines in particular with the recent news of Gamestop, with global restrictions due to the pandemic further boosting interest in Gametech. With regards to MEA, the region is one where it not only has a very young population but in parts of it, such as in the Gulf Cooperation Council (GCC) region (Saudi Arabia, the United Arab Emirates (UAE), Qatar, Bahrain, Kuwait and Oman) some of the highest mobile penetration in the world.

The Middle East and Africa (MEA) region as a whole is a very young region, where fintech and its wider ecosystem such as gametech showcases strong potential to grow

The Middle East and Africa (MEA) region as a whole is a very young region, where fintech and its wider ecosystem such as gametech showcases strong potential to grow

The Middle East and Africa (MEA) region as a whole is a very young region, where fintech and its wider ecosystem such as Gametech showcases strong potential to grow IMAGE SOURCE GETTY

The various economic development policies and strategies in MEA heavily promote tech and wider digital transformation. With regards to Africa and parts of the Middle East, the large youth population and the potential for digital transformation across all spectrums presents strong opportunities – both to foster youth to be digitally savvy and provide solutions to do so.  Therefore, with a growing industry such as Gametech coupled with the ongoing coronavirus pandemic that is requiring the world to be as virtual as possible, an industry like Gametech has strong potential.

In 2016 it was estimated that the Middle East and North Africa (MENA) region spent $3.2 billion broadly on games. Specifically with mobile gaming, by 2022 it is predicted that this alone in MENA will stand at $2.3 billion. With regards to the Middle East, according to Statista, the shared revenue of the video gaming industry in the Middle East was evaluated to be at around $3 billion in 2017, with the biggest markets including Turkey, Saudi Arabia, and the UAE.

ARPPU is the average revenue a paying user generates during a specified timeframe. It is actually Saudi Arabia that has the world’s highest ARPPU – $270 compared to China (which, as the world’s biggest gaming market, is at $32 according to the same source). Saudi Arabia’s large youth population, where 70 per cent is under 30 years old, combined with a large population of 35 million people showcases an opportunity for Gametech. In particular, prior to Saudi Vision 2030 and the opening of the Kingdom economically (the country’s national economic development and diversification strategy), there were little opportunities for leisure and entertainment. Therefore, an industry like Gametech makes sense in a market like Saudi Arabia – young, tech-savvy, ambitious and developed.

MEA also offers a strong opportunity for the gaming and Gametech industry because it is home to one of the most spoken languages in the world – Arabic. Across the Middle East, including Israel (which Hebrew and Arabic are the two official languages) and much of Africa (not counting the language’s importance for the world’s Muslim population), Arabic is the world’s fifth most spoken native language in the world (behind Hindi, English, Spanish and Mandarin). 70 per cent of the Arab world use Arabic as their default language on their smartphones.

In terms of Africa as a whole, the industry is still at its infancy but has recently seen an explosion of opportunity. There’s the launch Africa Game Developers Association, which is a community that boasts members from over 18 African countries. Commenting at an interview with The Fintech Times, Douglas Ogeto, Co-founder and CEO of Nairobi, Kenya-based Ludiqueworks says, “Leading to the growth of the industry is access to smartphones as well as fair pricing on data and access to infrastructure (servers) for the esports space. Several global publishers are investing their infrastructure on the continent giving fair play to local players who not only play competitively against fellow players in the region but the world over.”

Other challenges include the conversion of opportunity to commercialisation. The region possesses strong talent but the true exploitation of Gametech remains to be one that MEA as a whole can foster. With regards to Africa, another challenge is lacking a central storefront that prioritises and appreciates the perspective of both African creators and players. In addition, the volatility in local currency valuation can also make it difficult for players when trying to find value for money with regards to the global Gametech market. Nevertheless, the success of Africa’s early-stage Gametech ecosystem is noted, with growing local digital retail outlets such as Bonako Games Arena and Masseka Game Studio. Companies such as Ludiqueworks highlighted earlier are showing the aspirations of the African continent in this space.

In Israel, the Startup Nation, despite its success as a tech hub, is still catching up in the sector. However, in its short time in the sector from the early 2000s, according to a report from Deloitte, has seen global successes in the industry such as with Playtica and Plarium.

The growth of esports

The global growth of esports globally can also be seen in the MEA region. For example, with regards to prize money, twelve countries from MENA were in the top 100 earning countries. Jordan was the highest MENA country (ranked number 23 with total earnings of over $6 million). The others in the top 100 are Lebanon (27th), Saudi Arabia (46), the United Arab Emirates (66), Morocco (79), Iraq (82), Bahrain (83), Tunisia (84), Kuwait (85), Algeria (86), Egypt (87) and Palestine (98). The list overall had the United States, China and South Korea ranking as the top three.

Despite COVID-19, esports globally accelerated its importance, as many global sports events either were cancelled, postponed and/or modified to keep players safe and promote social distancing. For example, esports did carry on in the MEA region with Saudi Arabia setting up a new charity esports event to raise money to fight the coronavirus pandemic with a $10 million prize fund. Gamers during the seven-week long mega-series had a chance to compete for their chance to decide where the prize money goes in the tournament. The “Gamers Without Borders by Saudi” took place between April 24 and June 7.

It was also publicised this year that Saudi Arabia will launch a new business training programme to help further grow and boost the e-gaming sector. Called ‘The Game Changers initiative’ and led by the Saudi Arabian Ministry of Communications and Information Technology, the programme will offer apprenticeship training to participants as well as aiding them in finding jobs in the sector and establishing startups.

Despite the overall infancy of Gametech in comparison to other more advanced Gametech economies of the USA and in parts of Asia, MEA presents an opportunity that can see a thriving ecosystem in Gametech.  Fintech and Gametech will continue, particularly now in our digital world (both prior and further accelerated by COVID-19), to play an important role even in our leisure time.

https://thefintechtimes.com/an-overview-and-potential-of-gametech-in-the-middle-east-and-africa-region/