East Asia’s growing role in the Mideast’s $4.4bn gaming industry

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 enrollment rate in secondary and college education, particularly in the Gulf Cooperation Council 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. 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 startups 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.

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.