As part of its ambitious Vision 2030 plan to diversify its economy away from oil dependence, Saudi Arabia has embraced emerging technologies, including blockchain and artificial intelligence (AI), while tapping into the flourishing gaming market.
While Saudi Arabia has yet to establish a significant global presence in the gaming and AI development sectors, experts in Web3 (the next iteration of the internet) believe that the kingdom’s investments in the gaming industry could have far-reaching implications.
Yat Siu, the co-founder of Animoca Brands, noted Saudi Arabia’s keen interest in Web3, emphasizing its potential significance. Siu stated, “I think Saudi [Arabia] understands the principle that Web3 gaming or blockchain gaming — the one that we actually prove the owner assets — is going to be the future of gaming.”
Saudi Arabia, along with the United Arab Emirates, is driving the growth of the Middle East’s gaming market due to its young, tech-savvy population. A Boston Consulting Group report revealed that the kingdom represents 45% of the region’s gaming sector, with a value exceeding $1.8 billion. Saudi Arabia also boasts one of the largest game revenues in the region.
In 2017, the Saudi Esports Federation was established to regulate and develop the country’s gaming industry. In a significant move, Saudi Arabia, through its Public Investment Fund, invested $38 billion in the sector to position itself as a global gaming hub.
While the Saudi government understands the high-level concept of Web3 and its potential alignment with esports, it remains uncertain how it will integrate cryptocurrency and virtual assets into the gaming sector due to a lack of clear regulatory guidelines. Siu explained, “Cryptocurrency is something that is still to be explored. It’s being investigated. I think [Saudi Arabia is] quite forward about how to deal with it. But they haven’t come up with anything yet.”
In contrast to regions like Hong Kong, Japan, and the UAE, which have more regulatory clarity regarding crypto and Web3, Saudi Arabia is in the learning phase. Siu noted, “That’s why they’re talking to us. Because they want to know what the best practices are and how they can learn,”
Siu highlighted Saudi Arabia’s unique eagerness to lead and progress, stating, “You can feel sort of the desire to have progress and to lead in Saudi Arabia. I think that’s kind of unique.”
To spur Web3 adoption, Siu emphasized the importance of financial literacy among users. He stated that true Web3 users should possess a certain level of financial literacy beyond having a bank account. Siu argued that Web3 users tend to be more investment-savvy compared to Web2 users, who are predominantly labor-focused.
John Linden, CEO of Mythical Games, also sees Web3 adoption in the gaming sector, albeit at a slower pace. He stressed the need for Web3 to enhance user experiences and not just provide a means to generate income. Linden believes that Web3 gaming could onboard 50 to 100 million players in the next two years, with their titles targeting 10 million players by the end of 2023.
