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The GCC gaming market is expected to hit US$ 821 million by 2021


  • Global games devised by international developers have so far dominated the GCC market 
  • Video gaming can unlock massive business potential for GCC telecom operators
  • Saudi Arabia is expected to expand rapidly and become the largest market from 2019 onwards
  • Investments in eSports will unlock additional rewards
  • Strategy& outlines steps for GCC operators to master the smart gaming ecosystem

Video gaming is an exciting opportunity for telecom operators who can tap into this rapidly growing market and diversify their business using their existing capabilities, according to a new study titled Skin in the Game published by Strategy& Middle East, part of the PwC network.

According to industry data, the gaming industry is now worth a whopping US$129 billion-a-year. That is bigger in terms of revenue than annual worldwide box office, annual music streaming and album sales, and major sports leagues all put together. There are close to 2.5 billion gamers worldwide. “The GCC gaming market has followed the rapid expansion and is expected to hit US$ 821 million by 2021 from US$ 693 million in 2017”, said Hicham Fadel, Partner with Strategy& Middle East. “Global games devised by international developers have so far dominated this regional market. This makes it a particularly attractive proposition for operators in the Gulf Cooperation Council (GCC) region, where more than half the population is under 25 years of age and there is a strong opportunity to create localized gaming content”, continued Fadel.

Opportunities for extra credits for telecom operators in the GCC

According to the Strategy& report, GCC telecom operators who successfully enter the gaming industry would improve their brand positioning and increase the loyalty of their customers.  Gaming would also increase data usage and bring the welcome extra revenue for telecom operators. Significantly, this would allow telecom operators to generate more data about their customers, which in turn will help improve customer experience and increase monetization.

Telecom operators can reach the next stage by delving deeper into the gaming world cautiously

Telecom operators should stay on the same path - make a rash decision, a leap into the unknown, and the result could be bad. There is an alternative, however. A wily gamer knows when to explore a new path. Video gaming represents precisely that alternative approach for telecom operators.

First they should explore distribution of games, and once their gaming ecosphere is operational, GCC operators can begin by localizing simple games at first, or by making games relevant to the local audience. If this resonates with the players, they can then take the next step, develop their own games, and take the fight to global game publishers. Caution is key here – it’s a step-by-step process to gaming greatness and the next level.

Saudi Arabia to become the largest gaming market from 2019 onwards

In line with the overall global trend, the GCC gaming market has grown. Although the UAE was the largest gaming market in the region in 2018, Saudi Arabia is expected to expand rapidly and become the largest market from 2019 onwards. As elsewhere in the world, the mobile gaming segment in the GCC dominates the region’s gaming market when it comes to revenue and penetration.

Market research indicates that global games devised by international developers have captured the lion’s share of opportunity in the GCC. The top mobile games played in the GCC today are PUBG Mobile, Intikam Al Salatin, Fortnite, and Rise of Kingdoms. However, the demand for localized content remains strong and to an extent unfulfilled.

This creates a potential for global players to modify their content to satisfy GCC users, or for GCC users to adapt global content themselves. Indeed, regional players such as gaming studio Falafel Games and Arabic mobile games publisher Tamatem Games have started to emerge through building on their culturally relevant content.

Jad El Mir, Principal with Strategy& Middle East said: “It’s no secret that video games are a global cultural tour-de-force. To fully understand the magnitude of its significance, take the video game Grand Theft Auto V – it achieved seven Guinness World Records after its release in 2013, including a world record for US$1 billion of sales within three days of its launch”. It is therefore no surprise that today online streaming services such as Netflix concede that online games such as Fortnite pose a bigger challenge to them compared to their competitors in the same space.

Investments in eSports will unlock additional rewards

Another way for telecom operators to associate with gaming is through investment in eSports, which are spectator events in their own right. Operators can launch events and form eSports teams to compete worldwide.  It is no surprise that the eSports market is likely to see a substantial boost from its currently low base. The unlocking of sponsorship, advertising, and media rights is projected to increase its annual global revenue to more than $1.7 billion by 2021, around 1 percent of the total gaming market.

Johnny Yaacoub, Manager with Strategy& Middle East said: The opportunity eSports represent is phenomenal, and that is compared to some of the biggest sporting events in the world. Take the example of Kyle Giersdorf, known online as “Bugha”. The gamer won the Fortnite World Cup and took home $3 million – that’s more than the money awarded to the male or female winners of the Wimbledon tennis championship. That’s the scale of this industry”.

Walkthrough to win the game and unlock achievements

According to the Strategy& report, the video gaming industry, just like an actual game, involves multiple, different players. GCC operators need to understand these players so that they can build their own ways to accomplish their quest, and their own ways to unlock achievements in this growing market.

Providing enhanced connectivity through infrastructure is the simplest way to play for operators. It is also the safest and least ambitious. Operators can supply data packages offering better quality of service for gamers, potentially bundled with gaming hardware, content, and online platform subscriptions.

The next stage would involve creating partnerships with leading gaming companies, giving customers access to exclusive game releases or introducing in-game advertisements for the operator’s own products. Such partnerships would also facilitate direct carrier billing for popular games, with users able to carry out in-game purchases through charging payments to their phone bill.  As cloud gaming develops, operators are partnering with cloud gaming service providers to distribute their platform. For example, Etisalat joined forces with Gamestream to offer cloud gaming services to its customers.

The next level involves close partnerships with developers. The goal is to make gaming content more relevant for GCC players. That can mean Arabizing games, or adapting images and the storyline to the GCC culture. As some top games are not currently allowed in some markets, this could be a particularly beneficial approach for operators. When the operator gains confidence and feels ready to take on the major players, it can even contemplate developing its own games and products.

Another option is to venture outside the core of the video gaming industry by entering eSports. For this play, the operator will need to invest heavily by launching its own events and building its own eSports teams to compete worldwide. This would position the operator at the forefront of the gaming ecosystem and the minds of the players.

Hicham Fadel, Partner with Strategy& Middle East concluded: “The video game industry is a massive opportunity for GCC telecom operators. Like a video game itself, it needs the players to exhibit skill, patience, and use the right strategy”.

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