The Arab World is Catching Up in Gaming

posted on: Dec 12, 2019

Video games have a strong heritage in North America, Western Europe, and Japan. For decades, the console market has been dominated by Japanese companies like Sega, Nintendo, and Sony, although these giants currently face stiff competition from Microsoft and have previously gone head to head with Atari.

It is in these regions where video games get their earliest releases and have their largest budgets spent. This reflects the fact that the Asia-Pacific region is the largest overall market, with annual revenues of over $50 billion. This region has also seen the fastest growth, seeing an increase of $8 billion between 2015 and 2017. The area has the largest spend by far on “free-to-play” games, totaling over $1 billion in 2016, more than the rest of the world combined.

Performance in the Rest of the World

At the same time, the combined region of Europe, the Middle East, and Africa also saw an increase of almost $6 billion. While this is less in terms of numbers, the increase was more than ten percentage points higher than the Asia Pacific region as a proportion of growth. Meanwhile, North America saw much less growth both in terms of percentages and numbers. It performed better than Latin America though, which remained static.

Gaming in the Middle East

Video gaming in the Middle East has had much less attention than other areas of the world. This has been for several reasons, including smaller population sizes, legal restrictions, and lower levels of stability when compared to other regions. This doesn’t mean that the region is small. Almost 600 million people are playing online games in the Middle East, with the region generating tens of billions of dollars.

Banned Blockbusters

A drag on video games growth in the region is that some of the biggest blockbuster titles have been banned in certain countries. Sales restrictions are usually enforced because the content does not align with the cultural sensitivities of the region. Some of these titles include the Grand Theft Auto series, Call of Duty 4: Modern Warfare, Battlefield II and God of War.

The restrictions typically vary from country to country and enforcement of them is also patchy. This makes it difficult to get hold of games, but not impossible. The changing trends towards digital distribution instead of sales of physical media mean that these restrictions are harder to implement, mainly as VPN use is widespread. Therefore, this digital distribution is helping to increase the growth of the gaming market across the Middle East.

iGaming

The growth of the iGaming market in the Middle East is also held back by legislation. Like most parts of the United States, most countries in the Middle East have outlawed real online gambling where users can wager real money as part of the gaming experience. However, free to play versions where no money changes hands are available. Also, like America, this may be changing slowly. With less than 1% of the total online gamblers currently residing in the Middle East, this could pose a huge development opportunity for iGaming companies should the legislation change.

Healthy Growth

Despite the factors that can be a drag on growth in the region, the Middle East is outperforming many other areas of the world. The global year-on-year growth of the video games market is around 8%, but the Arab countries have seen figures as high as 25%. The four biggest countries in the region are the UAE, Iran, Turkey, and Saudi Arabia. Combined, these nations account for more than $2 billion of annual video game sales.

A large proportion of the recent growth in gaming sales has come from the increase in smartphone use. Egypt and Saudi Arabia are the biggest growth markets for mobile gaming, with smartphone adoption now as high as 80%.

The Power of Sony

Sony has been the biggest driver of the video games market in the region. It first launched the PlayStation 2 in 2000, and it remains the best selling console in the region to date, with over 5.2 million units sold. The company’s handheld console, the PlayStation Portable (PSP) is the second-best seller with 1.5 million units sold. Other companies that have been investing in the region include Valve and Ubisoft.

Video Gaming Events

As video gaming has become more widespread across the region, video gaming events have begun popping up. This is helping to further fuel the growth of the industry, creating a stronger gaming culture amongst the population and helping to reach a broader audience. Some of these events include:

• GAMES Middle East – A collaboration between Sony, Microsoft and Pluto Games that offer fans early access to video games and technology that are still in development. The events are also hosted to esports tournaments to help demonstrate the best gaming talent of the region. GAMES Middle East is the region’s equivalent to E3.
• IGN Convention Abu Dhabi – This is the biggest convention for comics, technology, films and video games in the Middle East. It hosts many Q&A and discussion panels, similar to those seen at Comic-Con conventions, as well as cosplay, esports competitions, and previews of upcoming releases.
• Dubai World Game Expo – This is an expo aimed more at journalists, investors, retailers and others in the industry, rather than consumers. It is often used to announce new releases of software and hardware, covering all kinds of gaming.

Conclusion

The video games market in the Middle East has faced challenges in decades gone by. This has caused it to miss out on having homegrown industry giants to rival the likes of Sony and Nintendo. Despite this, and the other challenges that the industry has faced in the region, video gaming in the Middle East is seeing significant growth. The region has year-on-year sales increase more than even the Asia-Pacific region.

The market remains much smaller than in North America and Asia, but this growth is helping to close the gap. Significant investments by companies like Sony have helped the industry to take hold and grow, with returns for the company being plentiful. This can be seen by the 5.2 million PlayStation 2 consoles it has sold in the region. Video gaming will likely continue to grow for the foreseeable future while the market corrects itself, now that many of the drags on its performance have been removed.

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