UAE: Why It Will Be a Future Gaming Hub + How to Invest
6 min readNov 1, 2023
On my recent trip to the Fintech SURGE conference in Dubai, I got to meet leaders from Global Ventures, Mubadala, Strategy& MENA, Dubai Future Foundation Government Initiative and more.
Representatives across these funds, private corporations and non-profits concurred that boosting the gaming sector is a focus in their strategic initiatives.
How Does Gaming Align with the UAE’s National Agenda, ‘Vision 2030’?
Under its hyper-organized, efficient monarchy, the entire nation’s resources are committed, hearts and minds, to the actualization of this grand plan.
To know what will be the next big thing out of the UAE, analyze what sectors are most in line with the 6 key items on Vision 2030.
(1) Urgency to diversify economy away from oil, and seek the highest leverage opportunities
- 30% of the UAE’s GDP is hydrocarbon-related (Brookings)
- Revenues from oil are expected to decline in the face of reductions in global demand as renewable energy usage increases and energy efficiency and storage improve. This decline will begin around 2040, if not sooner (IMF)
- In the short term, GCC countries are already tapping into $2 trillion in financial assets accumulated over decades and invested in sovereign wealth funds for future generations. Unless GCC countries undertake substantial fiscal and economic reforms, they will deplete their conserved wealth by 2034 (Brookings)
- “The National Agenda aims to transition the UAE to a knowledge-based economy by promoting innovation and research and development, strengthening the regulatory framework for key sectors and encouraging the development of high value-adding industry sectors. Some of the NKPIs that measure the progress in achieving this priority are Gross National Income (GNI) per capital, net inflow of foreign direct investment as percentage of GDP, Ease of Doing Business Index, Global Competitiveness Index and growth in the non-oil sectors of the economy” (National Report)
- Meanwhile, the Gaming Market size is poised to grow to USD $492.5bn by 2030, growing at a CAGR of 13.4% in the forecast period (2023–2030)
(2) Gain relevance and it-factor on the global stage
- Gaming attracts global attention from a fervent audience, from Microsoft’s record-breaking all-cash transaction of Activision, to companies like Netflix and Disney all naming gaming as a core strategic growth area in the past 4 earnings calls
- Nations succeeding in gaming are getting attention in business headlines (finland, turkey, canada) and grassroots celebrity perspective with Twitch and TikTok superstars (and some UAE-locals streamers finding fame and global recognition through esports)
(3) Already growing gaming market
- Gaming market revenue in the Middle East was estimated to be between $3.0bn — $3.4bn in 2021, a growth of ~19% YoY from 2020 (source)
- Adjacently, Saudi Arabia’s gaming market generated approximately $900m in revenues, but are investing heavily, with estimates as high as $15bn through the PIF
(4) Monetizable consumer population
- E-payments advancements make it easier than ever to monetize games through in-app purchases with reduced friction across money transfers, crypto and FX management
- Dubai and Abu Dhabi are essentially captive test market samples of ideal gamer demographics, representing 200+ nationalities skewing towards high-earning and young with strong wifi connectivity
(5) Events Hub as a flywheel for engagement
- Dubai and Abu Dhabi have ideal conditions for gaming and esports to flourish. Most obvious driver: temperature! It is a nation well-suited for indoor entertainment (hence indoor skiing, pools)
- Abu Dhabi has $6bn earmarked towards “media sector infrastructure” as per the Department of Culture and Tourism
- Dubai has roadmapped the media & entertainment sector to grow from 2.6% in 2020 to 5% of GDP by 2025 (E&Y MENA Entertainment Report).
(6) Futuristic Testing Ground
- From a private presentation with the Ministry of Technology & Industry, I can attest the newly built smart cities have the cutting edge IoT and immaculate infrastructure to make it uniquely suited as an experimental free zone for VR, AR, and the gamification of the real world. I’d give large incentives to invite Epic and Roblox to use the cities as experiment zones (a la Waymo x Pheonix San Francisco) as the companies explore their next stage of growth
Now that we know WHY the UAE has the vision, how are they achieving the vision?
(1) Right partnerships to bring expertise to fill in gaps
- Most GCC countries want to create high-tech knowledge economies, but this requires a level of skills and research facilities that remain in short supply (Brookings)
- The UAE is enthusiastically recruiting expats to fill in this knowledge gap and supplement their small population of ~9.6 million people (World Bank)
(2) Cultivating Internal Pool of Talent for the Next Generation of Game Developers
- Future Foundation, Dubai’s government-controlled tech accelerator initiative, is investing capital and resources to expedite growing talent pool of software engineers
- Partnerships with MIT x Dubai are bringing much needed education infrastructure and best practices, and the young population is being encouraged to be tech-savvy
*Datapoint* Unity Center of Excellence
- Abu Dhabi recently partnered with Unity, the world’s leading platform for creating and operating real-time 3D content
- Plainspeak — terrible analogy but I think of Unity : Gaming Development as the Home Depot : DIY Construction
- Impact on Developers: Unity offers comprehensive set of software solutions for developers to create, run and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices.
- Impact on Larger Ministry Initiative: Unity is providing training modules for their software to young entrepreneurs, as well as large-scale R&D guidance to the Abu Dhabi planning committee, to set the right KPIs to achieve a pipeline of successful gaming products (source)
Bonus: Manufacturing Sector Investment
- UAE is investing in building out their manufacturing sector to grow the contribution to GDP, and dedicating resources to a program to train a portion of population to be best-in-class manufacturing leaders
- The UAE has favorable CEPA agreements with Taiwan and China (source: Ministry of Industry). These are key suppliers along the value chain of gaming hardware (evidence), to potentially play in PC, console and gaming equipment hardware
- The UAE has a demonstrated ability to scale up a factory overnight (as evinced by a private presentation from the Emirates group, which achieved scaling up a food manufacturing plant in the middle of the desert to serve 1 billion meals for flights)
- The gaming industry is facing console shortages, and global supply current cannot keep up with demand, leaving room for additional suppliers
- All of these elements could help the UAE become a leader in technological equipment manufacturing to dovetail with growing gaming sector, and own another part of the value chain
How to Privately Invest as an Angel or Venture Capitalist to Jump on this Wave?
Opportunities
- Picks and shovels that will ride the tailwinds of the rise of gaming in the Levant, Gulf and North Africa, specifically around supply chain of consoles, PCs and gaming equipment to the region, and latency solutions in smart-cells and telecom technology
- Real estate and tourist destinations supporting events, conferences and play hubs to service the rise in gaming tourism (Aya Universe; Pixoul Gaming)
- LLMs for chat support to bridge global audience and enhance community and network effects (startup concept outlined here)
Risk
- Companies started here and expanding quickly (Bleeding Edge and Juego Studios) may be able to develop enough momentum to attract external investors and achieve lift-off, but attracting and retaining talent may be difficult as large established gaming companies move into the region
Further Reading
