Voices in the Dubai gaming and esports ecosystem



On a recent trip to the United Arab Emirates, I absorbed some of the environment for the growing industry of video games and esports in Dubai, where there are more than 100 gaming and esports startups.

Dubai is part of a fast-growing region when it comes to young players who have a lot of money to spend on video games. It’s also a magnet for those seeking to raise money in a world where it’s a lot harder to get money for game projects.

It’s no secret how tough it can be to get funding for games or Web3 projects in the U.S. — especially with so many layoffs happening right now. Many companies come to the Middle East and Dubai in particular hoping to get quick money, said Paul Dawalibi, CEO of Holodeck Ventures and Holodeck Media, who works in both Dubai and Abu Dhabi. Too often, the funding seeker’s hit-and-run approach is flawed, Dawalibi said.

Part Canadian and part Lebanese, Dawalibi migrated from New York 2.5 years ago to Dubai to explore opportunities for venture investing and helping the government create a metaverse and gaming strategy for building new business ecosystems.

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“There is definitely money available for those companies, if you want to build the ecosystem here,” Dawalibi said. “But if you’re living in LA and getting on a place and you show up in Dubai, Abu Dhabi or Riyadh, hoping someone is going to splash a bunch of cash on you — then you can go back to LA. That doesn’t work anymore.”

Dubai’s economy is diverse and strong.

The collective goal of the region’s governments is to transform the economy from one built around natural resources, tourism and finance to one that has diverse jobs in tech, edtech, games and esports. That means they need to attract the talent to build companies with roots in the Middle East.

This vision to build a new economy persists despite the war in Gaza and the tragic events of October 7 in Israel. Dubai has its issues, of course, but it is far better off than other places like Gaza, due in no small part to the decisions of its leaders, wrote Thomas L. Friedman, New York Times Columnist.

If Dubai has an advantage now, it’s as a marketing hub as a place that can generate buzz. While Dubai is a lot less dependent on the oil economy, it knows that the region may run out of that resource in a few decades. Real jobs have to replace it, and on a pretty huge scale.

Overall, Dubai has a diverse international business district with 23,000 companies from 190 nations. Dubai develops dedicated ecosystems for potential high-value sectors, said Belal Jassoma, head of business development for the DMCC (Dubai Multi Commodities Centre), in an interview with GamesBeat.

The earlier industry incubations worked great for commodity exchanges such as coffee, gold and tea. But for the past decade, Dubai has been focusing on the tech ecosystem and it has incubated more than 800 companies in that time, he said.

Dean Takahashi with Anna Tutova
Dean Takahashi with Anna Tutova, CEO of Coinstelegram.

The region made a bet on blockchain and cryptocurrency, with policies that defined what businesses could or couldn’t do early. The DMCC Crypto Centre launched in 2021 and it has 550 Web3 businesses. That attracted expats like Anna Tutova, CEO of Coinstelegram and cryptocurrency expert from Ukraine.

She splits her time between Ukraine and the UAE goes to a lot of crypto events in the city. She speaks about the latest trends at conferences about the blockchain opportunities and takes pictures with heads of state. Roughly 88% of the population of the UAE is from outside the country. Many of those are foreign laborers who fuel the country’s construction efforts, while many others are seeking finance opportunities.

Tutova said the UAE government is quite innovative and supports tech and gaming companies, and has favorable tax treatment in an effort to diversify UAE’s economy. The country is still short on tech talent, as it has just 63,000 software developers based on reports. So most companies have developers overseas or outsource their IT needs to third-party companies.

But the government creates different initiatives to increase the number of qualified developers in the country. It is both surprising and refreshing to find government officials who are knowledgeable about the tech and gaming industries.

One such official is Marwan Al Zarouni, strategic advisor for Dubai Economy and Tourism and CEO of the Dubai Blockchain Center.

Marwan Al Zarouni of Dubai and Dean Takahashi.
Marwan Al Zarouni of Dubai and Dean Takahashi.

“We’re in the infancy of this kind of technology. But in Dubai we see a lot of new topics being raised, because the talent is here now,” Al Zarouni said in an interview with me. “This will play a huge role not only for Dubai, but worldwide, when it comes to the next wave of gamers. They’re digital natives, number one. They understand the value of in-game assets, understand the value of the network, and understand the value of the middleware around games as well. You can exchange value. You can exchange social hierarchy. You can create influence within the gaming sphere.”

UAE sovereign wealth funds Abu Dhabi Investment Authority(ADIA), Mubadala and others are limited partners in world’s biggest VCs and sometimes as well invest directly into major tech companies. There are also private funds and tech accelerators in the UAE, including Hub71 in Abu Dhabi which launched last year with a $2 billion fund to invest into digital assets, blockchain, metaverse startups; DIFC Innovation Hub; twofour54 Yas Creative Hub (for media, entertainment and gaming) in Abu Dhabi; Abu Dhabi Gaming initiative; and the DMCC(Dubai Multi Commodities Centre) gaming centre and more.

Many of the tech startups focus on serving the needs of the region, with five unicorn companies headquarter in the UAE. Some of the world’s biggest gaming companies, such as Ubisoft and Tencent, have offices in the UAE. And there are a lot of esports tournaments held in the country.

Tutova said that because of crypto friendly regulations, the UAE has attracted a number of blockchain, crypto companies, including blockchain gaming, metaverse, NFT projects. Such industry giants as Polygon(Layer-2 blockchain, which is the most popular chain for Web3 games), Binance, Bybit, OKX etc. have their offices and activity in Dubai.

Dubai strives to be a major tech hub, create tens of thousands of new jobs and grow country’s GDP this way. In 2022 Dubai released its Metaverse Strategy to transform Dubai into one of the world’s leading metaverse economies and a global center for the metaverse community. And it also appointed a minister for AI way back in 2017. Last year the government launched “Dubai Program for Gaming 2033” to rank the emirate among the top ten gaming cities worldwide.

dubai 8
Belal Jassoma of DMCC with Dean Takahashi of GamesBeat.

Now the DMCC in Dubai has more than 100 game and esports companies (including Yalla Esports), and gaming revenue is expected to double from 2021 to 2027, according to the Future of Trade Special Gaming Edition report. What caught the region’s attention? Nearly $90 billion was invested in gaming across 4,783 deals from 2015 to 2021.

The UAE Ministry of Economy says mobile gaming is the most popular gaming platform in the UAE, as 69.1% of UAE adults play mobile games. The government forecasts AR and VR will contributed $4.1 billion to the UAE economy by 2030, boosting the country’s GDP by 1% and creating 42,000 jobs.

And the UAE has a 10-year national strategy for the cultural and creative industries to encourage gaming, including gaming localization, local game development, new offices and studios for international game companies, and esports hosting.

The larger region

Tarek Fouad speaks at Games for Change.
Tarek Fouad speaks at Games for Change.

I attended the second annual Games for Change Summit on Abu Yas Island in Abu Dhabi in December, where esports players competed for big prizes and Ferrari race cars drove around the hotel as game wonks pondered the future of the industry.

Tarek Fouad, a speaker at the Games for Change event in Abu Dhabi 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.

I also visited Saudi Arabia last year and saw how firms like Manga Productions were growing their own entertainment talent organically.

Savvy Games Group acquired Los Angeles-based mobile game publisher Scopely for $4.9 billion in April, and it bought a $1 billion stake in Sweden-based game publisher Embracer Group. It also acquired ESL Gaming and FaceIt in esports to create ESL FaceIt Group. Of Savvy’s 4,000 employees, about 200 are in Saudi Arabia.

And the Saudis have also bought stakes in Capcom, Nexon and Nintendo this year, building on stakes it acquired previously in Activision Blizzard, Take-Two Interactive and Electronic Arts. All of that has made the gaming world take notice.

Niko Partners research

mena 1
Women are a fast-growing market in the Middle East.

Niko Partners recently released its MENA-3 regional game study which focused on Saudi Arabia, United Arab Emirates and Egypt. Video game revenue is projected to add $1 billion in 2022-2027 to surpass $2.65 billion.

The MENA-3 video game market generated total revenue of $1.92 billion in 2023, up 7.8% YoY, rising to $2.65 billion in 2027 at a 5-year CAGR of 8.2%. Games markets in all 3 countries we track grew in 2023.
Total number of gamers reached 68.4 million in 2023, up 2.9% YoY, rising to 79.6 million in 2027 (5-year CAGR 3.7%).

There are lots of young folks who like gaming in the Middle East.
There are lots of young folks who like gaming in the Middle East.

About 71.5% of gamers in MENA-3 engage with esports in some capacity such as watching esports content, playing esports games or competing in amateur or professional tournaments. Government support for esports is a major growth driver in the region, Niko Partners said.

“There are over 420 million Arabic speakers globally, which makes it the No. 5 most spoken language in the world. Paying attention to and participating in the games industry in MENA will help companies succeed globally as well,” said Lisa Hanson, CEO and president of Niko Partners, in a statement. “It is imperative to recognize the growth in the MENA games markets, study the local players and ecosystems, and implement a localized strategy to take part in the growth that governments are planning for and supporting, particularly in Saudi Arabia, UAE and other GCC markets.”

mena 2
There are lots of young folks who like gaming in the Middle East.

Fueled by increasing public and private investment in the games industry, high disposable income, and rising demand from its young population, MENA has quickly emerged as a key region to watch in the global video games industry.

Niko Partners also found in the study that 32.6% of gamers in Egypt, Saudi Arabia and the UAE are women. And they found that 53% of women gamers in those countries use social media to get information on gaming.

The Dubai community has regular meetups, game jams and networking events as well as investment meetups, said Klaus Kajetski.

Years ago, Kajetski wanted to live somewhere it was warm. He grew up in the cold and dark of Finland, and he wanted to move by the equator. That was the beginning of his journey to start Yalla Esports in Dubai in the United Arab Emirates.

Twelve years later, he is firmly planted in Dubai. At first, he was a DJ. But gaming was always his passion, and he was always excited about esports. He spent time in internet cafes and got to know a lot of people in the local gaming community. He was a semi-pro playing Counter-Strike. He started Yalla Esports (the company spells it YaLLa) in 2016 and it has been growing ever since, pivoting when necessary.

“Once I’d learned about the culture, the place, the opportunity — no place is perfect — but this is a great place to be,” Kajetski said in an interview with GamesBeat. “If I compare 2016 to now, things have changed tremendously for the better in gaming. Localization is a hot topic. There are publishers that do it very well, like Ubisoft. They take it very seriously.”

To get support from Dubai, the companies need to have at least one person with residency. It’s more important that the companies show growth and develop skills — quality matters a lot more than the quantity of new hires or offices in Dubai. And while esports is strong, Dubai wants the makers of console and PC games to have a strong pool of talent in the region as well.

It’s not easy to do this in a region where people didn’t grow up playing video games. But the Middle East and North Africa are now among the fastest-growing regions in the world for games and esports, according to a recent briefing by Niko Partners.

Not everything is a success, as the recent failure of Fenix Games, which raised $150 million from Dubai investors but then came to a halt after it got hit with a lawsuit.

Al Zarouni, the government adviser, said that the Dubai announced an initiative around esports for the next 10 years. Previous to that, it also announced the Dubai metaverse strategy.

“We realized that the first go to market for the metaverse will be gaming, especially web3 gaming. We’ll see a lot of adoption and an easy go to market with this industry. As well as esports, being fully digital, will create a new kind of economic model. Not only play-to-earn, but also competitive, based on statistics that can be captured on chain and game assets that can exchange between games,” Al Zarouni said.

He added, “Many other things are up and coming that will disrupt the game industry as we know it, and disrupt the social fiber around it as well. We’re in the infancy of this kind of technology. But in Dubai we see a lot of new topics being raised, because the talent is here now. This will play a huge role not only for Dubai, but worldwide, when it comes to the next wave of gamers. They’re digital natives, number one. They understand the value of in-game assets, understand the value of the network, and understand the value of the middleware around games as well. You can exchange value. You can exchange social hierarchy. You can create influence within the gaming sphere.”

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