The gaming industry has evolved massively since the turn of the century, with advancements in technology driving major innovations across the world.
Associated industries such as iGaming have also benefited significantly from technology developments to become one of the biggest growth sectors on the planet.
However, licensing and regulatory challenges in some regions have prevented iGaming companies from reaching their full potential.
This undoubtedly rings true where the Middle East is concerned, with strict religious laws placing a stranglehold on popular ‘western’ practices such as gambling.
With that in mind, read on as we look at how gaming is developing in the region, before assessing some of the hurdles which are preventing future growth.
The Gaming Industry is on the Rise
An estimated 150 million gamers reside in the Middle East, and the market is valued at around $500 million – a figure expected to double by 2029.
Countries such as Saudi Arabia and the United Arab Emirates have driven the growth with relentless investment in the gaming space.
The UAE has committed around $1 billion to developing eSports. A chunk of the funds went into creating an eSports Island in Abu Dhabi, a venue slated to host several exciting tournaments.
Saudi Arabia, in a bid to curtail the over-reliance on its oil deposits, has invested a mammoth $38bn to build the appropriate infrastructure for the market to thrive.
The nation recently sponsored and hosted the eSports World Cup and has agreed to also perform those duties following the creation of the eSports Olympic Games, which is set to debut next year.
Funnelling this investment into the gaming space will attract gaming companies, create thousands of jobs and boost the economy while solidifying their position as a major gaming hub.
Local & International Investment Opportunities Abound
Several Middle Eastern nations are building gaming studios, technology parks and eSports arenas, and these developments drive economic growth and innovation.
With local and international investment being channeled into the region, they are fast becoming a gaming powerhouse and the heavy hitters are trooping in.
International giants such as Sony PlayStation, Ubisoft and Tencent are setting up offices in the
Middle East, eager to capitalise on this budding market.
These companies have been adapting their products to connect with the local audience and investing capital into developing technologies such as virtual reality (VR) and augmented reality (AR) to stay competitive.
VR arcades have been popping up across Dubai, with mobile and gaming companies developing VR-based applications to match the demand for the technology.
Besides new technologies, funds are also going to local content creators, with the industry looking to cater to the youthful demographic of the region.
Producing games grounded in Arab culture is crucial for engaging the local audience and ensuring long-term success.
Overcoming Regulatory & Religious Hurdles
While it is easy to get carried away by the investment flowing into the gaming sector, stakeholders have tempered their expectations due to the Middle East’s draconian gaming regulations.
Due to cultural and religious factors, the Middle East remains wary of the iGaming industry even though they some countries are opening up gradually to modernisation.
For example, Kuwait has completely outlawed gambling. By contrast, the UAE has established a gaming authority and recently issued its first lottery license.
The Kuwait government may be watching developments with interest to determine whether the UAE’s move proves to be an economic success.
While online slots in Kuwait can easily be accessed by Arab players, the operators are licensed and regulated in other jurisdictions.
This ultimately prevents Kuwait from benefiting from tax revenues which could be used to fund important social projects in the country.
Kuwait’s conservative stance has also forced game developers and investors looking to enter their market to reconsider, at least in the short term.
They are hoping to see Kuwait join the UAE and Saudi Arabia in adopting a more progressive approach to the gaming sector.
The two Middle East giants also have stringent laws in place, but they have shown flexibility that has allowed the industry to flourish.
Prospects & Opportunities
While there is a tech-savvy population waiting to be entertained in the Middle East, there are several hurdles to overcome before they enjoy the same freedoms as people in other nations.
The region must focus on investing in local talent and culturally relevant content to tap the full market potential while addressing its regulatory environment, which makes life tricky for local and international stakeholders.
If the Middle East wants to capitalise on the gaming industry and pioneer its growth, the region must collectively release the regulatory shackles to ensure it benefits from every part of the lucrative sector.