Economy, Investment

Gulf States See E-Sports as Growth Sector

Much like many Gulf states made a foray into traditional sports like football a couple of decades ago, these same governments are investing in e-sports as the next horizon in sports and entertainment.

 

Saudi Arabia, Qatar, and the UAE all have established power within European football and their own burgeoning domestic competitions. Enterprising public funds and private individuals now view e-sports much in the same way they used to view European football, a place for Gulf states to park their profits and purchase public relations power.

 

What was once a niche is now a booming industry that is expected to surpass a market value of $1.5 billion by 2023.

 

American and Asian firms have been the traditional powerhouses in the industry due to their large player base, but companies across the globe have stepped in the ring in recent years.

 

In 2019, the Dubai firm W Ventures pumped $50 million into E-Sports in the Middle East region. Kuwaiti telecommunications company Zain Group launched an e-sports brand in December 2020 that is planning to host events across the region.

 

And to top it all, Saudi Arabia set out perhaps the most ambitious e-sports plan in the region as part of their Vision 2030 initiative. As part of the plan, Saudi Arabia is planning for the gaming industry, including e-sports, to account for a whopping 1 percent of the country’s total economy when 2030 rolls around.

 

Factors including, the massive growth potential in the gaming industry, a population becoming more economically affluent, and economies in desperate need of diversification, are combining to jumpstart e-sports in the region.

 

But as with many trendy economic moves, there are some questions surrounding the sustainability of the industry. Is the Middle East’s move to e-sports a public relations exercise or one with genuine economic potential?

 

Taking a look at the region’s current demand for gaming, other region’s forays in e-sports and macroeconomic trends of regional economies can begin to answer these questions.

 

 

Signs of Growth

Many E-Sports have been hampered by the coronavirus pandemic and travel restrictions, but the boom in online streaming services seen across the world also has had its impact in the Middle East, opening up the potential for bigger markets.

 

Both casual and professional gamers have flourished on Twitch and other streaming platforms as viewership has massively grown during coronavirus lockdowns. In 2020, 4.4 million viewers tuned into thousands of Arabic-language Twitch streams just in the UAE, Bahrain, Oman, and Saudi Arabia.

 

And many industry insiders point to the MENA region as one of the fastest-growing gaming markets in the world.

 

Not all of these viewers are watching competitive e-sports matches, as casual gaming is also a massive sector of growth both on online platforms and in the Middle East. The two different types of gaming have some crossover and represent different possibilities for companies.

 

To meet demand in both sectors, several high-profile game publishers have opened dedicated servers in the Middle East to serve the rise in casual and professional players. Activision launched servers in Riyadh and Jeddah for Call of Duty in early 2020, and Fortnite and Valorant also received dedicated Middle East servers to cope with the increased demand.

 

While plenty of new customers have been brought on in the region, server capabilities represent a barrier to entry for professional players and tournaments. But, with recent improvements due to increased demand from casual players, the Gulf states could become a hotbed for professional e-sports.

 

Much like in Asia, Europe, and the United States, with a rise in gaming has come a rise in gaming personalities. Even professional athletes in the region have combined their traditional athletic career with a professional e-sports career. For example, the Qatari Ahmed Al Meghessib plays for Al Ahli on the real pitch and PSG on the virtual pitch in the video game FIFA.

 

Is Gaming Here to Stay?

 

The gaming industry undoubtedly saw massive growth in certain areas as more people stayed home in 2020 into the current year. But as major economies begin lifting pandemic restrictions, there is some worry about a potential collapse in player base, viewership, and interest.

 

Regardless, gaming remains a massive industry and in economies such as the Middle East, many more players are expected to contribute to the overall industry.

 

In East Asia and the United States, some of the earliest regions to have serious e-sports competitions, many viewed the sensation to be a simple flash in the pan. But, decades later the overall e-sports market was $1.5 billion in 2020. This number is only predicted to increase, and several firms in the Middle East have jumped into this growing market.

 

Both big names in the e-sports world like Red Bull and homegrown e-sports outfits are hoping to cash in on the growing market.

 

And while it may seem far-fetched to some, governments in the region are no stranger to ambitious projects. Some might find it strange to see Saudi royals launching interests into gaming, but Prince Faisal bin Bandar has been a driving force behind Saudi Arabia’s push into the e-sports space.

 

The coronavirus pandemic has only driven home the need for Gulf state economies to diversify away from the oil and gas sector and into more sustainable ventures.

 

Certainly, gaming and e-sports are no replacement for the massive oil profits many states currently enjoy, but it is clearly viewed by certain actors within the economies as a viable avenue for further diversification.

 

Just like in other sectors, states like Saudi Arabia are contesting with more conservative and traditional ideals as bigwigs attempt to further ‘modernise’ economies.

 

As Prince Faisal told Wired, “One woman came to one of our events with her father and he said, ‘no, there are too many men here, you have to leave.’ We had to sit him down and explain what we’re trying to do, and then he was fine. This is not something that is taboo. Your sons and daughters are athletes, they are the best at what they do and they should have the opportunity to thrive.”

 

With the explosive nature of social media and gaming, one thing is for sure: the Gulf states’ investment in the gaming sector will spur thousands of kids to try to make it as a professional gamer. Whether or not that leads to economic prosperity on a broader scale is another story waiting to be told.