Since the beginning of the 21st century, the gaming industry has undergone significant evolution, fueled by technological advancements that have led to groundbreaking innovations worldwide.
Thanks to advancements in technology, associated industries like iGaming have experienced immense benefits, emerging as one of the largest sectors for growth worldwide.
Nevertheless, iGaming companies have been unable to maximize their capabilities due to licensing and regulatory obstacles in certain regions.
There is no doubt that this holds true in the Middle East, as strict religious laws tightly control and restrict popular ‘western’ activities like gambling.
Continuing with that thought, let’s delve into the progress of gaming in the region and then examine the obstacles impeding its future expansion.
The Gaming Industry is on the Rise
The Middle East is home to approximately 150 million gamers, and the gaming market in this region is currently worth around $500 million. Experts predict that this value is likely to double by 2029.
The growth in the gaming sector has been propelled by continuous investments from countries like Saudi Arabia and the United Arab Emirates.
The development of eSports in the UAE has received a generous investment of approximately $1 billion. A significant portion of this funding has been allocated towards the establishment of an eSports Island in Abu Dhabi, an exceptional venue designated to host numerous thrilling tournaments.
In an effort to reduce its dependence on oil reserves, Saudi Arabia has allocated a staggering $38 billion towards constructing the necessary infrastructure to foster a flourishing market.
Following the successful sponsorship and hosting of the eSports World Cup, the nation has committed to continuing these responsibilities for the upcoming eSports Olympic Games, scheduled to premiere next year.
By directing this investment towards the gaming sector, it will entice gaming companies, generate numerous employment opportunities, and stimulate the economy, thereby cementing their status as a prominent gaming hub.
Local & International Investment Opportunities Abound
Economic growth and innovation are being propelled by the construction of gaming studios, technology parks, and eSports arenas in multiple Middle Eastern nations.
The region is rapidly emerging as a dominant force in the gaming industry, attracting both local and international investments. Major players in the industry are flocking to this area.
International giants like Sony PlayStation, Ubisoft, and Tencent have established offices in the area.
The Middle East is keen to take advantage of this emerging market.
In order to remain competitive, these companies have been investing in the development of technologies like virtual reality (VR) and augmented reality (AR), while also tailoring their products to better connect with the local audience.
In response to the increasing demand for virtual reality (VR) technology, numerous VR arcades have sprouted all over Dubai. Mobile and gaming companies are actively creating VR applications to cater to this growing trend.
In addition to investing in new technologies, local content creators are also receiving funds as the industry seeks to target the young demographic of the region.
Ensuring long-term success and engaging the local audience is of utmost importance when it comes to creating games that are rooted in Arab culture.
Overcoming Regulatory & Religious Hurdles
Despite the influx of investment in the gaming sector, stakeholders have moderated their expectations as a result of the strict gaming regulations in the Middle East.
Despite some countries in the Middle East gradually opening up to modernization, the iGaming industry continues to face apprehension due to cultural and religious influences in the region.
In contrast to Kuwait’s complete ban on gambling, the UAE has taken a different approach by establishing a gaming authority and recently granting its inaugural lottery license.
The Kuwaiti government is likely monitoring the progress with keen interest to assess if the UAE’s decision turns out to be a prosperous economic venture.
While online slots in Kuwait can easily be accessed by Arab players, the operators are licensed and regulated in other jurisdictions.
As a result, Kuwait is denied the opportunity to profit from tax revenues that could have been utilized to finance significant social initiatives within the nation.
The conservative position of Kuwait has led game developers and investors who want to enter their market to reassess their plans, at least temporarily.
Their hope is for Kuwait to join the UAE and Saudi Arabia in embracing a more progressive stance towards the gaming industry.
Both Middle East giants have implemented strict laws, yet they have demonstrated adaptability, enabling the industry to thrive.
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.
To fully realize its market potential, the region should prioritize the investment in local talent and culturally relevant content. However, it must also tackle the challenges posed by its regulatory environment, which can complicate matters for both local and international stakeholders.
In order for the Middle East to fully seize the opportunities presented by the gaming industry and lead its expansion, it is crucial for the region to collectively remove regulatory barriers that hinder its ability to benefit from all aspects of this highly profitable sector.
Middle East is Emerging as a Gaming Hub Amidst Regulatory Challenges