Gaming consumption in Saudi Arabia, the Arab world's largest economy, is projected to reach $6.8 billion by 2030, according to a Boston Consulting Group report.
Along with eSports, the sector – a growing powerhouse with about three billion active participants globally – is poised to generate substantial revenue, high-quality jobs and various reputational benefits in the kingdom, where consumption is expected to grow at a compound annual rate of 22 per cent through 2030 from $959 million in 2020, the consultancy said.
“From a Saudi standpoint, these growth projections undoubtedly bode well for the local gaming and eSports community. Despite the kingdom being a relatively recent entrant to this space, the industry is vibrant and fast-growing, nevertheless," said Povilas Joniskis, a partner at BCG.
Gaming has become big business, with new-age technologies providing both an opportunity to reach a wider audience and develop new titles to cater to consumer demand. The latest report from gaming data provider Newzoo showed that the industry is projected to generate total revenues of about $180bn in 2021, up 1.4 per cent from 2020.
Console and PC platforms are expected to see slight declines, but the mobile segment is likely to record another growth year, with revenues up 7.3 per cent year on year to $93.2bn, accounting for 52 per cent of the overall market, the group said.
The eSports segment, meanwhile, had its biggest year in 2021, with a viewership of 465.1 million people, up 6.7 per cent year on year. Raising investments remains a vital part of the business model for teams and organisations, BCG said.
Revenue for eSports is expected to jump almost 50 per cent to $1.62bn in 2024 from more than $1.08bn last year, according to Statista.
A milestone for eSports was when FaZe Clan announced in October that it would go public through a special purpose acquisition company, or Spac, at a $1bn valuation, the first time an eSports organisation raised capital from the public market, making it the first eSports unicorn.
Even venture capital funds, which traditionally stay away from the gaming segment, are taking notice. The top 15 VC funds dedicated to gaming now have almost $2.8bn in assets under management, according to December data from advisory company Games One.
And in a sign of a heated battle in the industry, Microsoft last week announced it was buying Call of Duty maker Activision Blizzard in a $68.7bn all-cash deal, making it the third-largest gaming company in the world.
Saudi Arabia is currently home to 23.5 million gaming enthusiasts, which is about 67 per cent of its population, according to the BCG report. Moreover, 90 per cent of gamers – about 21.1 million – already play eSports titles on a semi-pro or amateur basis, with about 100 professional eSports players pursuing this as a full-time career.
But while there is much potential in the Saudi gaming industry, a number of challenges await because the ecosystem is in an early development stage compared with other international markets, BCG said.
These include a lack of funding to compete full time, scarcity of local competition, no clear pathway for gamers to become professional and social stigma associated with choosing a career in gaming and eSports.
"Passionate gamers are primarily powering its growth and popularity at present, and it is more than feasible for them to embark on full-time careers and become involved on the international stage. Yet first, key barriers concerning aspiring Saudi competitors and professionals must be overcome," Mr Joniskis said.
From a Saudi standpoint, these growth projections undoubtedly bode well for the local gaming and eSports community. Despite the kingdom being a relatively recent entrant to this space, the industry is vibrant and fast-growing, nevertheless
Povilas Joniskis,
partner at Boston Consulting Group
This, however, provides an opportunity for the government to capitalise on the widespread popularity for gaming and translate the current high level of consumption intensity to a corresponding production intensity.
“When examining gaming and eSports in Saudi Arabia, we see interest in the industry growing among the government and less traditional business players alike,” Mr Joniskis said.
“By focusing on areas for improvement and approving the necessary investments across specific segments, the kingdom’s economy, reputation, jobs market and talent pool – all stand to reap the rewards.“
BCG highlighted the role of the gaming and eSports industry in Riyadh's future-focused Vision 2030 development programme, and the government is taking notice, throwing more support to organisations.
Riyadh-based Manga Productions, a part of the Misk Foundation that was founded by Saudi Crown Prince Mohammed bin Salman, provides funding and financial support, as well participating in education and talent attraction efforts.
The Ministry of Communications and Information Technology and the DigiPen Institute of Technology, a game design academy, recently teamed up to launch the Game Changers programme, designed to provide “unique career pathways for entrepreneurs in the Saudi game industry” and increase the number of independent game company start-ups.
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
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Install an air filter in your home.
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If driving, turn your engine off when stationary.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
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Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
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It's up to you to go green
Nils El Accad, chief executive and owner of Organic Foods and Café, says going green is about “lifestyle and attitude” rather than a “money change”; people need to plan ahead to fill water bottles in advance and take their own bags to the supermarket, he says.
“People always want someone else to do the work; it doesn’t work like that,” he adds. “The first step: you have to consciously make that decision and change.”
When he gets a takeaway, says Mr El Accad, he takes his own glass jars instead of accepting disposable aluminium containers, paper napkins and plastic tubs, cutlery and bags from restaurants.
He also plants his own crops and herbs at home and at the Sheikh Zayed store, from basil and rosemary to beans, squashes and papayas. “If you’re going to water anything, better it be tomatoes and cucumbers, something edible, than grass,” he says.
“All this throwaway plastic - cups, bottles, forks - has to go first,” says Mr El Accad, who has banned all disposable straws, whether plastic or even paper, from the café chain.
One of the latest changes he has implemented at his stores is to offer refills of liquid laundry detergent, to save plastic. The two brands Organic Foods stocks, Organic Larder and Sonnett, are both “triple-certified - you could eat the product”.
The Organic Larder detergent will soon be delivered in 200-litre metal oil drums before being decanted into 20-litre containers in-store.
Customers can refill their bottles at least 30 times before they start to degrade, he says. Organic Larder costs Dh35.75 for one litre and Dh62 for 2.75 litres and refills will cost 15 to 20 per cent less, Mr El Accad says.
But while there are savings to be had, going green tends to come with upfront costs and extra work and planning. Are we ready to refill bottles rather than throw them away? “You have to change,” says Mr El Accad. “I can only make it available.”
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Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
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Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Secret Pigeon Service: Operation Colomba, Resistance and the Struggle to Liberate Europe
Gordon Corera, Harper Collins
'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
