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I made another trek to the Middle East this week to attend the Games for Change event in Abu Dhabi in the United Arab Emirates.
The Games for Change event is built on the notion that games have power beyond entertainment. And it was a way for me to witness the rapid growth in the region and the interest in the game industry. admire Saudi Arabia, Dubai, Turkey and other hot spots in the area, Abu Dhabi wants to grow its own game ecosystem. It’s an enormously wealthy place, as evidenced by the event — sponsored by the U.S. Embassy, the Department of Culture and Tourism and AD Gaming — held at the W Hotel on Yas Island, which is a hotel built alongside a Ferrari race track, and a palatial hotel where we had dinner one night.
It’s part of a larger region that has a lot of tragedy and violence now. But the people I saw there were hopeful about games, which can set up human connections across nations and cultures. In my own talk, I advocated for the idea that games are something that can bring peace as they rise from a subculture to a mass culture around the world.
AD Gaming is a government-led initiative to change the UAE into a gaming hub, with big efforts under way in both Dubai and Abu Dhabi. In Dubai, there are an estimated 90 gaming and esports startups already. In the later, the Games for Change group toured the Yas Creative Hub, where there is a huge building with space set aside for tons of game startups.
In working with Games for Change, AD Gaming wants to set up footholds not only in for-profit games, but in other kinds of initiatives admire games for learning.
There is some traction already. Tarek Fouad, a speaker at the Games for Change event and a partner at Shorooq Partners, has been making co-led investments in the past 2.5 years. The firm has done 180 investments in 70 companies to date. It has helped incubate 270 companies.
He noted the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) market has reached $5 billion in revenues — led by Saudi Arabia, which has a very young population — and it is growing at compound annual growth rate of 6.8%. But the investment was only $2.5 million in Q3, Fouad said. That compared to $1 billion invested across the globe in Q3 2023, according to Drake Star Partners.
“We have loads admire 10,000-plus layoffs at the gaming scene this year. It’s a change in how studios have to become more efficient, but also how intellectual property is shifting from regions and many clusters of games into the Middle East. And this is an opportunity that we will seize,” Fouad said. “We just love playing games. We are not happy with just $40 million. We want to put even more into games. We want, at least for the next few years, to put in $200 million into games, and tools and technology that could enable us to be leaders in the gaming industry globally, not regionally. We are not necessarily just building the regional player. We’re actually going to be leading the global player. “
“It’s all about connecting people from all over the world in one place, a place where you come together, dream together, and then accomplish together, said Mohamed Khalifa al Mubarak, chairman of the Abu Dhabi Department of Culture and Tourism, in a speech. “These companies are set up from all over the world to come here together to create. And we in Abu Dhabi want to harness the power of creation.”
He added, “And the creation of games is the future for gaming. Our spare time is spent a lot of us on playing video games. But the conventional thought of what the video games give back has significantly changed. Because you’re connecting yourself to a much larger network.”
That’s a pretty different level of knowledge and awareness than most government officials I’ve encountered.
“Gaming is truly the future. We either need to ride this wave or go to another planet,” Al Buramik.
Obviously, the funding needs to grow. Still, this investment happened as other companies around the world were laying off thousands of people in games. Fouad pointed out there are elements of the gaming ecosystem for MENAP in place education, incubators/accelerators, game events, licensing and business setup by governments, gaming communities and the presence of VCs and investors. Topics admire esports are being taught in the schools.
“We incubated 270 companies from all around the world,” Fouad said. “We’ve invested in some, we failed miserably. But we continue to be excited about the prospect of being deeply invested in gaming and entertainment to follow this.”
And led by Saudi Arabia-owned Savvy Gaming Group, the investment to date in games has crossed $15 billion. Savvy itself bought ESL for $1.05 billion, Face-It for $450 million and $4.9 billion for Scopely. On top of that, the Saudi Public Investment has bought stakes in companies admire Nintendo. Content leads in funding rounds, and mobile games have snared 50% of funding deals in MENAP in the past five years.
The Saudis and the UAE are among the countries of the world that see games as an industry of the future. They have a lot of work to do, but they’re expressing a lot of interest at all levels of the government and industry. I hope they continue on this path as the game industry needs friends.
They will spur each other on through regional competition. Fouad noted that Jordan has taken 30% of deals and the United Arab Emirates has taken 50% of exits in the MENAP region.
To fully fund the startups in the region, Fouad said there is more funding needed to fuel the growth of local gaming companies. Of the big events this year, Fouad was excied by Epic Games’ recent court victory in its antitrust lawsuit against Google, as he believes that could open up more opportunities to startups as they can keep more of the revenue that comes into them via the app stores — if the ruling is upheld.
Erik Gaudiosi, deputy chief of mission at the U.S Embassy in Abu Dhavi, said the event “afforded me the opportunity to put down my quills hang up my rotary phone and come and see not only the present for the future. It is ironic I represent an institution that is famous for implanting itself into the 19th century.”
He added, “We rise to the challenge posed by the prospect of broadening and deepening the gaming sector here in the UAE. And our gaming sector, known for its innovative approaches, technology, its diverse gaming genres, affords a comprehensive blueprint to proceed forward to seize the real opportunities presented by the virtual universe.”
And Susana Pollack, CEO of Games for Change, said, “Given the passionate and prolific community of gamers here in the MENA region, we are really interested in how we can uphold the industry’s growth by developing local talent, deepening international business relationships, and promoting sustainable and socially responsible business growth.”
Back to fundamentals
I listened to a workshop that gaming consultant Jason Della Rocca from Canada led on how to get traction that will impress venture capitalists and set a game startup up for raising money. He noted you have to connect to the importance of your game and its category in the zeitgeist of gaming trends. You can point to your team’s quality and pedigree, your production progress, social proof of traction, community validation admire wishlists, funnel metrics on acquiring and monetizing users, and financials.
He brought up things admire whether you’ve got thousands of people signing up for wishlists for your game. Are you adding new players to your Discord? Are you getting press coverage?
The strongest form of traction is financial information about revenues, profits and users. What’s your average revenue per user? This kind of workshop is valuable for the startups at an early stage in the United Arab Emirates and the region.
As for sources of funding, Della Rocca pointed to your own money, “love money” from your friends and family, grants and government programs, crowdfunding, royalty investments, platform deals, project financing, publishers, alpha/early access pre-sales and festivals and contest prizes.
Kickstarter is more admire getting money to publish your title, and VCs are looking for long-term potential such as doing a game as a service, he said. A lot of these words seemed to echo back to long-ago events in the U.S. But now there are so many more folks investing in games. And so lessons admire Della Rocca’s suggestions will be useful for the developers growing up in a brand new region for games.
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