E-gaming and the $6bn Middle East opportunity
During Capacity Middle East 2021, six panellists from across the telecoms, tech and gaming ecosystem discussed the biggest trends in the space.
Moderated by Lisa Hanson, president of Niko Partners, a market research and consulting firm covering the Asia games market.
Many would question the decision to select Hanson as the person to spearhead a session on Middle East gaming, but as she put it, “why would Asia be part of a middle East panel one would wonder, but actually this is a panel about esports, telecoms and technology moving forward, and Asia is the heart of esports globally.”
“As we look at the middle east opportunity, it's helpful to frame it in comparison to Asia and the rest of the world. The technology, games and trends that we watch in Asia will surely be important and already are emerging as important, in the Middle East.”
Setting the framework of what the Middle East gaming opportunity looks like, Yousef Buhazza, founder and vice chairman of Unreal Bahrain / Bahrain Internet Society, says that ”when it comes to e-sports and gaming in the middle east it's a growing sector. By 2022 it's expected that spending or should I say the size of the gaming sector in the middle east would reach about $6 billion.”
“What I really find interesting is that you have a young generation that actually grew up on games and that will always look for better services to enjoy those games,” continued Buhazza.
“A good example would be that certain require a lot of data and a lot of bandwidth that are provided by the telco companies. Fortnite alone has been averaged around 40 to 100Mb of data per hour so that's something that the next generation is always looking for and I believe that the telecom sector in this region is trying to fill those gaps that are required by its customers.”
As far as challenges, Malek Hammoud, chief investment and digital officer at Zain Group, recognised that it is both a private and public sector effort, so to meet those challenges requires a collaborative approach, even at times creating a competitive environment.
Once such example he shared is an announcement by the public investment fund the of Saudi Arabia, committing to invest up to $3.3 billion in the gaming industry.
“So as a private sector or anybody in the private sector competing with the government in Saudi, is going to be very difficult so we have to play a role where we will align, complement and work together with the public sector in order to ensure that we're building and creating the value,” says Hammoud.
Another challenge he points to is latency, explaining that “some of these issues that some of the gamers and regions are facing are because most of the servers of the big gaming companies are not based here in the region”, but work is already under way with these companies to have their servers hosted in the region.
Interestingly the last challenge presented was the lack of diverse cultures in the region, saying “within the ecosystem here you will see a big disparity in terms of income levels, ability to play and even the development of technology.”
So, in markets like Saudi, Kuwait and Bahrain you will find fibre and even 5G, by comparison somewhere like Iraq only saw 4G launched last month.
Additionally, taxation is various countries across the region is very high, so the cost of buying and playing a console can be a major roadblock.
“So, when you look at the Middle East, because it's so diverse, the challenges are multiple and it really depends on the maturity level of the market itself,” added Hammoud.
Looking ahead, 5G technology will resolve many of the latency-based issues and vastly improve the gaming experience for users across the continent.
“5G together with edge computing, inherently enables greater access to high performance connectivity which is central and key to a data hungry and latency sensitive industry like gaming,” said Ricardo Rodrigues, head of business development Americas at Telstra Broadcast Services.
“5G is able to provide internet speeds that are more than 20 times faster than 4G and ensure mobile games provide HD and 4K image quality. 5G can also reduce ping from over 100 milliseconds on 4G to less than 20 milliseconds on 5G.”