South Arabia’s Ministry of Investment has signed an initial agreement with South Korean video game developer Wemade to boost the growth of gaming and blockchain industries in the kingdom.
The agreement followed Wemade’s participation in the Saudi-Korea Investment Forum in Seoul in November, where it held meetings with the kingdom’s Investment Minister Khalid Al-Falih and other Saudi officials.
“We are very excited for Wemade’s progress in expanding its activities in Saudi Arabia and are looking forward to continuing supporting Wemade’s footprint through connecting it to strategic partners in the sector,” a representative from the Ministry of Investment in Saudi Arabia said on Tuesday.
“This progress would be yet another step further into realising the national objective of becoming a hub for gaming and e-sports in line with the national gaming and e-sports strategy,” the representative added.
The Saudi ministry teams up with international companies to streamline investment and expansion initiatives in Saudi Arabia. As part of the kingdom’s 2030 Vision that focuses on diversifying the country’s energy-based economy, the ministry aims to facilitate business opportunities for foreign entities.
In February, Wemade also teamed up with Public Investment Fund-backed Savvy Games’ Nine66. The entities are exploring various initiatives aimed at training, producing educational content, localisation of games and sponsoring regional events.
“As the demand for games and blockchain technologies continues to grow in Saudi Arabia, we are committed to showcasing our capabilities and delivering innovative solutions that meet their needs,” Charles Huh, global investment officer at Wemade, told The National.
“We believe that our partnership with [the Saudi ministry] will not only benefit both parties but also create new opportunities in the global game industry."
Founded in 2000, Wemade is behind the blockchain gaming platform Wemix and the Legend of Mir series video games that have attracted millions of users globally.
Blockchain — the technology behind cryptocurrencies such as Bitcoin — is a digital chain of transactions linked by cryptography, a mechanism for secure communications, on an open ledger. The database is a real-time library of records that are difficult to tamper with as each change creates a new record.
It has created a new gaming experience for both businesses and players who use non-fungible tokens and digital currencies to buy in-game assets that could be exchanged for real-life money.
The gaming industry in Saudi Arabia, the Arab world's biggest economy, is poised to grow 250 per cent by 2030, with e-sports leading the growth, a recent study from YouGov found.
The growth would mean that its contribution to Saudi Arabia's GDP will have surged about 50 times by 2030 compared with 2022, the London-based market research company said.
In February, the kingdom's gaming industry received new funding worth $488 million. The financing was provided by the Saudi Esports Federation, the National Development Fund and the Social Development Bank.
This month, Savvy Games announced to buy California-based game developer and publisher Scopely for $4.9 billion.
Gaming consumption in the kingdom is projected to hit $6.8 billion by 2030, growing at a compound annual rate of 22 per cent, the Boston Consulting Group said in a recent report.
Seoul-based Wemade established its Middle East headquarters in Abu Dhabi in January to focus on the region.
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UAE currency: the story behind the money in your pockets
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- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
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Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
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TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
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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