Saudi Arabia heading to the next level thanks to esports gamble

Saudi Arabia heading to the next level thanks to esports gamble
In September 2022, the Saudi sovereign wealth fund earmarked nearly $40 billion for a new conglomerate aimed at transforming the Kingdom into a global hub for games and esports by 2030. (Shutterstock)
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Updated 29 July 2023
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Saudi Arabia heading to the next level thanks to esports gamble

Saudi Arabia heading to the next level thanks to esports gamble
  • Investment is part of Vision 2030 and plans to transform the Kingdom into a global hub for games and esports

RIYADH: With marquee football signings and a shake-up of the international golf tour, Saudi Arabia is making waves in the sporting world at an unprecedented rate.

Yet it is not just on the pitch or the green where the Kingdom is looking to become a global leader, it is on the console screen.

In September 2022, the Saudi sovereign wealth fund earmarked nearly $40 billion for a new conglomerate aimed at transforming the Kingdom into a global hub for games and esports by 2030 — and the move is already starting to pay off.

According to Vlad Belyanin, co-founder of True Gamers, a worldwide network of esports clubs that is launching in the Kingdom in early September, “everyone in the industry is looking at Saudi Arabia.”

Speaking to Arab News, he said: “After Ronaldo’s move to Al-Nasr and Al-Hilals €600 million ($662.06 million) offer to Lionel Messi we can expect Saudi Arabia to increase the integration of esports elements into traditional sports.

“I do not exclude that someone will assemble the best mixed team in the world, taking notable esports and traditional sports players.” 

The Middle East is a key player in the global gaming industry, with an impressive penetration rate and a strong commitment from governments to invest in the sector.

Alexander Schudey, managing director and partner at BCG

The investment by Saudi Arabia’s Public Investment Fund is part of the Kingdom’s Saudi National Gaming and Esports Strategy aimed at increasing the quality of life for egamers by improving players’ experience, providing new entertainment opportunities, and achieving an economic impact by contributing around SR50 billion ($13.33 billion) to the Kingdom’s gross domestic product by 2030.

The strategy is expected to lead to the creation of 39,000 new job opportunities by 2030.

Over $3 billion was invested in the industry by PIF last year, as part of the $38 billion commitment to be used by its company Savvy Games Group.

About a third of the announced amount will be spent on the purchase of a major game publisher, and the remaining funds will be used to acquire minority stakes in other gaming companies.

Acquisitions so far have included ESL and FACEIT for $1.5 billion in January 2022, Embracer Group for $1 billion in June 2022; VSPO for $265 million in March 2023, as well as Scopely for $4.9 billion in April 2023.

Brian Ward, CEO of Savvy Games Group told Arab News how the acquisition and merger of ESL FACEIT Group has enabled the creation of a force able to set the gold standard for esports competitions and gaming industry events. 




Saudi Arabia is attracting worldwide attention in the sector through its investments and acquisitions in cybersports. (Supplied)

“Saudi Arabia is very important for Savvy,” Ward said, adding: “It is a very exciting and rapidly growing market — the 19th biggest market globally. There are over 21 million gamers in KSA, 70 percent of the population — over 40 percent of whom are women.”

Ward stressed how Savvy’s aim is to make Saudi a global gaming hub. The company intends to do this by building capabilities and leading international and local gaming investments.

“We believe Savvy will have a significant beneficial economic impact in Saudi Arabia, both through its direct and indirect contribution to GDP, job creation and skills development,” he added.

The growth in esport is not confined to Saudi Arabia or the Middle East. Last year PwC predicted that in 2026 the global gaming industry would be a $320-billion industry, twice as much as in 2019.

Yet despite its global size, the Middle East is being seen as one of the hotspots for this growing industry.

According to a report from Boston Consulting Group released in June, more than 60 percent of the Middle East population are gaming enthusiasts, resulting in one of the highest shares of gaming mobile app downloads  — 50 percent compared to the global average of 40 percent.

“The Middle East is a key player in the global gaming industry, with an impressive penetration rate and a strong commitment from governments to invest in the sector,” Alexander Schudey, managing director and partner at BCG in a statement. 

Record investments are generating high expectations. Entrepreneurs who want to make money are now thinking about entering the Saudi-Arabian market.

Vlad Belyanin, co-founder of True Gamers

He added: “The region’s focus on gaming and the establishment of dedicated gaming hubs makes it an attractive destination for global gaming companies.

“The young and digitally savvy population, particularly in Saudi Arabia, where 70 percent of the population is below the age of 30, combined with higher disposable incomes and a preference for indoor activities due to the hot weather, further contribute to the region’s thriving gaming ecosystem.”

BCG’s latest report identified four major trends that will likely leave the biggest impact on the industry’s future.

These include audience growth and demographic shifts, whereby the gaming industry growth is broadening its demographic reach, appealing not just to Gen Y, who grew up playing video games, but also those entering their 30s, with an average gamer age of 31.

Another trend is innovation from players, with consumer communities playing a significant role in driving change in the industry, while mergers and acquisitions activity is leading the gaming industry to witness a surge in consolidation as major publishers, media companies and technology firms purchase studios and gaming-related assets globally. 

FAST FACTS

• Saudi Arabia’s National Gaming and Esports Strategy aims to contribute $13 billion to the Kingdom’s gross domestic product by 2030.

• PwC predicts that in 2026 the global gaming industry will be a $320-billion industry.

The final trend identified by the BCG report is new use cases, whereby the gaming industry is witnessing the emergence of the metaverse as a concept that is revolutionizing digital experiences.

The Kingdom is quickly becoming a global hub for gaming through investment and the launch of new products and technologies reflective of the above trends.

It is not just participants driving the growth of the sector, but those who wish to watch esports.

According to the Consumer Technology Association, the audience for cybersports will be 519 million viewers by 2024.

Technology and innovation play a major role in the esports industry and entrepreneurs, especially in Saudi Arabia, are capitalizing on these advancements to spur growth in the sector. 

We believe Savvy will have a significant beneficial economic impact in Saudi Arabia, both through its direct and indirect contribution to GDP, job creation and skills development.

Brian Ward, CEO of Savvy Games Group

“Cybersport is becoming an experimentation ground for artificial intelligence, chips, visualization, and big data technologies,” Belyanin told Arab News.

He added: “Games are becoming more accessible. The growing popularity of games on smartphones and tablets compared to PC gaming systems is driving game makers to release games on different platforms.

“Cross-platform and cloud-based gaming solutions promote hardware-independent games, and artificial intelligence ensures fair gameplay. Social gaming and cyber sports provide a platform for developers and players to build healthy gaming communities and improve brand reach.”

Sponsoring and hosting esports events and competitions further allows developers to build brand awareness and attract new players, he states, noting how True Gamers is developing and implementing new technologies in the user experience at its cybersports centers.

For example, True Gamers is the first in the world to use robotic dogs as waiters in clubs. Three mechanical assistants will appear in different clubs in Dubai, and by the end of 2024 their number will increase to around 20. Production of the test technology cost $100k, as well as an average $10k a month on updates and modifications of robots.

Saudi Arabia, stresses Belyanin, is attracting worldwide attention in the sector through its investments and acquisitions in cybersports.

“Record investments are generating high expectations,” he adds. “Entrepreneurs who want to make money are now thinking about entering the Saudi-Arabian market.

“They are thinking: ‘There is a lot of investment, so there is a lot of profit, and therefore I need to enter the market.’”

Belyanin added: “My point of view is different. If there are a lot of investments, the new gaming culture starts to grow there and therefore, it is interesting to work with it.

“This is huge long-term work, which will bring much more than a quick profit. We are not afraid of large-scale tasks; we are keen to create the future of gaming with our own hands.”


Closing Bell – Saudi indexes end week in green, TASI closes at 12,188

Closing Bell – Saudi indexes end week in green, TASI closes at 12,188
Updated 18 July 2024
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Closing Bell – Saudi indexes end week in green, TASI closes at 12,188

Closing Bell – Saudi indexes end week in green, TASI closes at 12,188

RIYADH: Saudi Arabia’s Tadawul All Share Index ended the week in green, gaining 30.71 points, or 0.25 percent, to close at 12,188.32.         

The total trading turnover of the benchmark index was SR8.7 billion ($2.3 billion) as 108 of the listed stocks advanced, while 113 retreated.   

Similarly, the MSCI Tadawul Index also gained 6.61 points, or 0.43 percent, to close at 1,527.   

The Kingdom’s parallel market Nomu dropped 185.57 points, or 0.72 percent, to close at 25,702.34. This comes as 32 of the listed stocks advanced, while as many as 33 retreated.   

The best-performing stock of the day was Saudi Manpower Solutions Co., with the company’s share price surging 6.33 percent to SR9.41.    

Other top performers include Saudi Public Transport Co. as well as Tourism Enterprise Co., whose share prices soared by 5.83 percent and 5.06 percent, to stand at SR18.88 and SR0.83 respectively.    

In addition to this, other top performers included Saudi Industrial Development Co. and National Gypsum Co.  

The worst performer was Al-Baha Investment and Development Co., whose share price dropped by 7.69 percent to SR0.12.     

Others to see falls were Al Sagr Cooperative Insurance Co. as well as Leejam Sports Co., whose share prices dropped by 6.19 percent and 3.12 percent to stand at SR23.34 and SR230, respectively.    

AYYAN Investment Co. and B MBC Group Co. also recorded falls.

On the announcement front, Advanced Petrochemical Co. announced a net loss of SR17 million for the first half of 2024, a significant decline from the SR103 million net profit recorded during the same period in the previous year. 

The company attributed this downturn to several factors, including a 20 percent year-on-year decrease in sales revenue due to scheduled maintenance activities in 2024. 

Advanced Petrochemical posted a SR67 million loss share in its investment in SK Advanced for the current six-month period, compared to a SR43 million loss in the first half of 2023. 

In the second quarter of 2024, the company’s net profit decreased by 30 percent to SR42 million, down from SR60 million in the same period of 2023. This reduction was primarily driven by a 12 percent year-on-year increase in propane prices, despite an overall rise in quarterly revenues. 


UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars

UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars
Updated 18 July 2024
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UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars

UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars
  • Emirate’s debt capital markets outstanding are expected to reach $300 billion in the second half of 2025

RIYADH: The UAE’s debt capital market outstanding surged by 11.8 percent annually to $281 billion in the first half of this year, with 71.5 percent of US-denominated dollars, a new report has revealed.
According to data released by the credit agency Fitch Ratings, the country’s debt capital markets outstanding are expected to reach $300 billion in the second half of 2025.
“The DCM structural reforms, the implementation of the Dirham Monetary Framework, and generally resilient investor appetite have led to notable growth over the past five years,” said the Global Head of Islamic Finance at Fitch Ratings, Bashar Al-Natoor.
“However, there are still gaps to address,” he added. “The dirham market remains nascent, the investor base is highly concentrated in banks and most corporates still prefer bank financing over bonds or sukuk.”
Following the UN climate change conference COP28 in the UAE in late 2023, environmental, social, and governance debt issuance in the first half of this year fell 35 percent to $3.3 billion, with sukuk accounting for the vast majority of 67.5 percent.
The Emirates was the third-largest US dollar debt issuer among emerging markets, excluding China, with an 8.9 percent share of the total in the first half of 2024.
Al-Natoor said that despite the growth in Islamic finance, many corporates still prefer traditional bank financing over issuing bonds or sukuk due to perceived complexities in adhering to Shariah standards set by the Accounting and Auditing Organization for Islamic Financial Institutions.
The only countries with a larger percentage than the UAE were Saudi Arabia, with a 17.4 percent share, and Brazil, with 9.4 percent, according to Fitch Ratings.

Sukuk issuance in all currencies increased by 9.8 percent annually, totaling $8.4 billion, outperforming bond issuance, which decreased by 44.3 percent to $39 billion.

Dollar-denominated DCM issuances included a notable share of sukuk at 27.7 percent in the first half, down from 35.3 percent in the same period last year. 

Fitch has assigned ratings to $26.5 billion worth of UAE sukuk, with 94.3 percent maintaining investment-grade status.

Certain UAE banks, both Islamic and conventional, have been restricted from investing in specific sukuk unless they hold them until maturity due to guidelines from the Higher Shariah Authority of the Central Bank.

“We forecast consolidated UAE government debt at 24 percent of GDP (gross domestic product) at end-2024, well below the 49 percent ‘AA’ category median,” the credit rating agency said, adding: “Individual emirates have varied debt profiles; Sharjah stands out with a higher debt burden.”

Abu Dhabi and Dubai are expected to post surpluses, whereas deficits are projected for Sharjah and Ras Al-Khaimah, where Fitch upgraded RAK’s rating to “A+” from “A” in May 2024.


Almarai, 30Export sign deal for nearly $16m export boost strategy

Almarai, 30Export sign deal for nearly $16m export boost strategy
Updated 18 July 2024
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Almarai, 30Export sign deal for nearly $16m export boost strategy

Almarai, 30Export sign deal for nearly $16m export boost strategy

RIYADH: A SR60 million ($15.9 million) deal has been signed between food company Almarai and marketing logistics firm 30Export to boost the former’s foreign trade prospects.

The agreement, overseen by Minister of Industry and Mineral Resources Bandar Alkhorayef and Abdulrahman Al-Thukair, the CEO of Saudi Export Development Authority, was signed by Abdullah Al-Bader, CEO of Almarai Co. and Ali Al-Malki, 30Export.

According to a statement by Thamer Al-Mishrafi, the spokesman of SEDA, this memorandum of understanding will empower the brand in international markets.

This comes as SEDA aims activate all its efforts and capabilities to explore available means of support in order to enhance the penetration of national products and services into targeted global markets.

The project also increases Saudi Arabia’s import-export capacity by improving its connectivity with international trade routes, aliginng with Vision 2030 goal.

The effort aims to diversify national income sources and increase the share of non-oil Saudi exports to at least 50 percent of total gross domestic product by 2030

It also comes as part of the Export Housing initiative launched by SEDA last year, which enables licensed export houses to facilitate the export of high-quality national products to international markets.

These export houses, licensed and qualified by SEDA, play a crucial role as commercial intermediaries, offering a range of services across the export value chain.

“This effort aims to assist local factories in accessing global markets, thereby facilitating the export movement and enhancing the reach of national goods and services to targeted international markets,” Al-Mishrafi said in a statement on X.

Saudi Arabia’s non-oil exports saw an annual rise of 3.3 percent in the first quarter of 2024, fueled by an increase in the value of re-exports.

According to the General Authority for Statistics, while national non-oil exports experienced a slight dip of 5.2 percent, the value of re-expored goods surged by 31.5 percent during the same period.

In October last year, SEDA and Saudi Post, also known as SPL, signed an agreement to promote the “Made in Saudi” brand across various channels locally and internationally.

The collaboration agreement was rolled out within the framework of the National Strategy for Transport and Logistics and the National Strategy for Industry.

Both parties also introduced joint services to support the national economy’s transformational goals in light of the Saudi Vision 2030.


Trump Organization announces deal to build Dubai tower

Trump Organization announces deal to build Dubai tower
Updated 18 July 2024
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Trump Organization announces deal to build Dubai tower

Trump Organization announces deal to build Dubai tower

DUBAI: The Trump Organization on Thursday announced a deal to partner with a Saudi developer to build a high-rise tower in the UAE business hub of Dubai, its latest project in the Gulf.
Trump Tower Dubai will target “the Dubai luxury market,” real estate developer Dar Global said in a press release, adding that the location and design would be unveiled by the end of the year.
The development will include a Trump hotel and branded residential units, said Dar Global, the international subsidiary of Saudi developer Dar Al-Arkan.
The announcement came a little over two weeks after Dar Global announced a separate deal with the Trump Organization to build a high-rise tower in the Saudi coastal city of Jeddah.
It is also developing a Trump hotel and luxury villas in the capital of neighboring Oman, with completion expected in 2028, according to the firm’s website.
Former President Donald Trump entrusted the management of his real estate empire to his sons after taking office in 2017, although he held onto his shares in the Trump Organization.
His foreign business dealings prompted critics to sound the alarm about possible conflicts of interest, including in a 2022 Congressional report that found the foreign governments of six countries — the UAE among them — spent more than $750,000 at a Trump-owned hotel in Washington while trying to influence his administration in 2017 and 2018.
Trump, the presumptive Republican nominee in this year’s presidential election, cultivated close ties with Arab Gulf states during his term, choosing Saudi Arabia for his first foreign trip.
“We are proud to expand our presence in the region further through the launch of our iconic Trump Tower Dubai,” Eric Trump, the former president’s son and executive vice president of the Trump Organization, said in a statement.


UAE energy startups secure $30m in H1: IEA data

UAE energy startups secure $30m in H1: IEA data
Updated 18 July 2024
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UAE energy startups secure $30m in H1: IEA data

UAE energy startups secure $30m in H1: IEA data

RIYADH: Investor confidence in UAE’s energy startups surged as they secured $30 million in the first half of 2024, surpassing the $24 million raised throughout 2023, an analysis showed.

In its latest report, the International Energy Agency revealed that companies in energy storage and batteries received the largest share of total financing, accounting for approximately 33.3 percent, followed by solar energy firms at 25 percent.

This increase in funding for startups in the renewable energy sector highlights the UAE’s efforts to accelerate its energy transition journey, aligning with its goal to achieve net-zero emissions by 2050.

The IEA report revealed that UAE wind energy firms accounted for 8.3 percent of the overall financing received in the first half of this year, while companies operating in other renewable and clean energy technologies collectively made up the remaining 33.3 percent.

The report also noted that the total number of startup companies operating in the UAE’s energy sector reached about 54 by the end of 2023.

Of these, 21 companies are in the renewable sector, followed by 12 firms in energy storage and batteries.

The IEA added that nine startups in the UAE are working in the energy efficiency industry, while another 12 are operating in other energy-related sectors.

Beyond energy initiatives, UAE startups are also focusing on developing technologies to tackle critical challenges such as water security.

In May, Airwater Co., an air-to-water technology firm, announced a strategic investment from Abu Dhabi-based venture capital firm Tau Capital, for an undisclosed amount, indicating sustained investor interest in innovative solutions from the region.

The investment will enable Airwater Co. to expand its manufacturing, infrastructure, and distribution capabilities, with a particular focus on scaling large-scale commercial and industrial atmospheric water generation facilities, as stated in a press release.

Bill Murray, managing director of Tau Capital, stated: “Airwater Co.’s tech-focused approach to water security exemplifies the type of transformative innovation which we at Tau Capital believe is essential for sustainable global development.”

This followed another investment in December 2023, when UAE-based Zeroe secured seed funding from the VOYAGERS ClimateTech Fund, bringing the total raised to $2.3 million.

The funding was aimed at enabling Zeroe to expedite the development of its AI-integrated SaaS platform, which optimizes carbon emission calculations, aiding companies in their transition to net-zero in a more efficient and cost-effective manner, according to a press release.

“We’re excited to be VOYAGERS’ second investment in the region, and we believe this investment confirms our push to be a leading solution in supporting organizations to measure emissions and access sustainable finance,” said Farouk Jivani, co-founder and CEO of Zeroe, in a statement release at that time.

Overall, the UAE was the top-funded ecosystem in the region in the first half of 2024, with 91 startups raising $455.5 million across different sectors, according to a report by Wamda released in July.

In terms of the energy sector, the IEA report noted that US startups received a total funding of $2.29 billion in the first half of this year, closely followed by China at $1.98 billion during the same period.

France received $633 million in funding for startups in the first six months of this year, while companies in India were financed with $248 million.

The IEA revealed that its analysis is based on data from Crunchbase, which references about 3.5 million startups worldwide, including 72,000 energy-related companies.