[Overseas Compass] 2023 Comprehensive Analysis of the Middle East Gaming Market The ARPU is the highest in the world, the growth rate of hyper-casual games is rapid, and there is strong potential for female-oriented mobile games

The Middle East gaming market analysis shows highest ARPU worldwide, fast growth of hyper-casual games, and strong potential for female-oriented mobile games in 2023

Second Stop of “Going Global Compass”

Middle East

Recently, in the “2023 YouTube Gaming Industry Influencer Marketing Report” released on Nox Star, Saudi Arabia became the region with the highest YouTube gaming video views in 2022. The “Global Games Market Report 2022” released by Newzoo also shows that the Middle East will become one of the main driving forces of growth in the market in the coming years.

It is a Middle Eastern gaming market with both desert and blue ocean, and along with countless opportunities for going global, there are also religious and cultural traditions that are completely different from those in China. In this issue of “Going Global Compass”, we will take a look at the “Middle Eastern gaming market”, which has the highest customer unit price but is the most difficult to break through, from three aspects: “Characteristics of the Middle Eastern Gaming Market”, “Characteristics of the Main Regions of the Middle East”, and “Marketing Strategies for Going Global in Gaming”.

01. Characteristics of the Middle Eastern Gaming Market

The Middle East is a geopolitical region that typically includes 17 countries such as Saudi Arabia, Iran, Egypt, Turkey, Yemen, Iraq, and Oman, with a total population of 452.7 million. The “Middle East Going Global Guide: There Is Desert, There Is Also Blue Ocean” previously released on Nox Star summarizes the Middle Eastern market as follows:

• High internet coverage rate;
• Widespread use of social media applications, with young users and strong consumer spending power;
• The gaming and e-commerce tracks are hot, and technology finance is on the rise;

Focusing on the Middle Eastern gaming market based on the overall market, we also discovered unique highlights of the Middle Eastern gaming market.

High Paying

You can see the wealth of the Middle East from the $229 billion spent on the World Cup by Qatar. According to data from the International Monetary Fund (IMF), the per capita GDP of the six Gulf states in the Middle East ranges from $23,000 to $84,000, especially Qatar and the United Arab Emirates are expected to have nominal per capita GDP of 83,000 and 48,000 US dollars respectively in 2022, belonging to typical high-income groups. In this region with a population of 450 million, players’ willingness and ability to pay are unparalleled. According to the “2022 Middle East Mobile Game White Paper” released by Snapchat, mobile game revenue in the Middle East is expected to account for 1/4 of the global total. The strong willingness of local game users to pay is the driving force behind the rapid growth of game revenue in the Middle East.

In particular, Saudi Arabia has an average revenue per user (ARPU) of up to $270, which is the highest in the world.

SLG and RPG are the main game categories for going global in the Middle East

Focusing on the game categories for going global in the Middle East, according to the “2022 Middle East Mobile Game White Paper” released by Snapchat, Chinese mobile games going global in the Middle East are mainly RPG and SLG games, and simulation, gambling, action and other categories also have a certain user base.

SLG is one of the important tracks for Chinese mobile games to go global, and it is the same in the Middle East. According to Snapchat statistics, among the top 1000 SLG game downloads in 2021-2022, Chinese game developers account for nearly 23%. Moreover, in terms of the overall revenue of SLG games in the Middle East, Chinese game developers occupy more than 57% of the total revenue of the local SLG game market.

In addition to SLG, RPG is also one of the main tracks for Chinese mobile games to go global. According to Snapchat statistics, among the top 1000 RPG game downloads in 2021-2022, Chinese game developers account for nearly 25.7%. miHoYo’s “Genshin Impact” ranks in the top 10 of the list. The market share of Chinese game developers in the Middle East RPG game market revenue is as high as 49.5%, which shows that the competition for RPG in the Middle East has gradually entered a deep water area.

Localization has become the key to success

Although the Middle Eastern gaming market is full of opportunities, it is not as profitable as we might imagine.

The Middle East is a region with diverse languages, religions, and cultures. Localizing games has become the key to success for entering the Middle Eastern market, and its importance sometimes even surpasses the quality of the game itself, while avoiding religious taboos and capturing the hearts of Middle Eastern users.

For example, in the game “Vanguard” produced by COD, there is a scene where pages of the Quran are scattered on the floor, which caused dissatisfaction among Middle Eastern users and even sparked the “No call of duty” tag on the internet.

In addition to paying attention to religious taboos, incorporating elements with Middle Eastern characteristics into the game is also one of the keys to attracting Middle Eastern users. For example, setting some well-known tasks in the game to win favor, such as historical heroes from the Islamic period and so on.

For instance, the protagonist of the famous game “Assassin’s Creed” is a character created based on the real historical background of the Middle East; and the game “Revenge of the Sultan” produced by Longteng Jianhe shows the magnificent scene of the lords of various Arab countries vying for supremacy in the 14th century Arab world, which is still the highest earning SLG game in the Middle East since its launch in 2015.

However, when it comes to localizing the subject matter, it is particularly important to be careful when dealing with content related to the Crusades or conflicts between Europe and the Arab world, because historically, both sides were in opposition, and the Crusades in the eyes of the Middle Eastern people were European plunder of the Middle East. Domestic game publishers often incorporate the perspective of Westerners when making war-themed games for the global market. Therefore, when launching games in the Middle Eastern market, some adjustments to the content are necessary.

02. Characteristics of the Middle East’s Main Regions

According to a report by market research company Niko Partners, by 2025, the player base in the three key markets of the Middle East and North Africa (MENA) – Saudi Arabia, United Arab Emirates, and Egypt – is expected to grow to 85.8 million, with overall annual revenue reaching $3.1 billion.

Saudi Arabia: Highest ARPU in the world, great potential for female mobile gaming market

Saudi Arabia is the country with the highest gaming revenue in the Middle East, and its mobile gaming ARPU ranks first in the world. As the largest economy in the Middle East, Saudi Arabia is one of the fastest-growing regions in mobile internet in recent years.

Secondly, Saudi Arabia has a high degree of linguistic uniformity, with Arabic as the official language, and more than 80% of its residents use Arabic. The linguistic uniformity undoubtedly adds convenience to localization.

Unlike other Middle Eastern markets, the gender ratio in Saudi Arabia is more balanced, and there is great potential for the female mobile gaming market. According to data, under the traditional conservative religious culture, women in Saudi Arabia tend to prefer social entertainment on the Internet, and 90% of Saudi women have a habit of playing mobile games.

United Arab Emirates: High Internet penetration rate, male gamers dominate the market

With a population of less than ten million, the United Arab Emirates has an internet penetration rate of up to 98%, making it the country with the highest internet penetration rate in the Middle East. Moreover, it is at the forefront of global deployment and development in 5G technology. The excellent internet infrastructure undoubtedly provides enormous development space for its gaming market.

The UAE is different from Saudi Arabia in terms of language unification. Although its official language is Arabic, only 30% of the population actually uses it. The rest of the residents come from countries such as India, Bangladesh, and the United States, so English has become the second most commonly used language in the UAE.

In terms of gender ratio, the male population in the UAE is more than twice that of females. The main video game players are also male, and mobile games dominate the UAE market.

Turkey: The largest gaming market in the Middle East with low entry barriers

As the second largest economy in the Middle East, Turkey has more than 62 million Internet users, making it the largest gaming market in the Middle East, with a market share of nearly 40%. The industry’s annual revenue is nearly $1 billion, half of which comes from mobile games.

The official language of Turkey is Turkish, with a usage rate of 75%. The second largest official language there is Kurdish. The mainstream religion is Islam, and religious taboos need to be noted.

The Turkish government has some support for the gaming industry, and the market entry threshold is low. Coupled with Turkey’s high mobile payment penetration rate and unsaturated gaming market, it is an ideal testing ground for game exporters.

Egypt: With a population of over 100 million, there is a strong demand for gaming socialization

Although Egypt’s Internet penetration rate is not as high as top countries such as Saudi Arabia, the UAE, and Turkey, Egypt has a population of over 100 million, making it one of the important markets of mobile Internet in the Middle East and one of the emerging markets for game exports.

According to Statista data, the coverage rate of mobile games among Egyptian game users is as high as 73%, much higher than console games and PC games. Additionally, 98% of game users have a strong social demand.

In the Egyptian game player population, the male to female ratio is relatively balanced, mainly composed of young users, with 16-34 year-olds accounting for as much as 77%.

03. Game overseas marketing strategy

In recent years, the Middle East, as an emerging market, has become a priority region for Chinese game overseas expansion. Although the Middle East has not yet become the primary area for Chinese overseas expansion, judging from the continuously rising user volume and income growth rate this year, the Middle East has already become a huge potential destination for emerging mobile game overseas expansion.

Regarding the marketing strategy for Chinese game overseas expansion in the Middle East, it mainly involves online traffic acquisition and offline channel marketing. Due to geographical restrictions, online traffic acquisition is the main focus.

The buying platforms for Middle Eastern overseas expansion mainly include YouTube, Facebook, WhatsApp, Instagram and other major social media platforms. In terms of material production, SLG and other heavy games materials can be integrated with casual elements to broaden the audience and improve the user base. Meanwhile, casual games can focus on gameplay fun, and when marketing, highlight the social attributes of the game and use social scenes to attract young users.

The mature social media market in the Middle East has created a very good development foundation for influencer marketing, with Instagram, YouTube, Snapchat, and TikTok being the most popular influencer marketing platforms in the Middle East.

The Middle Eastern influencers mainly come from Saudi Arabia and the United Arab Emirates. A survey shows that 85% of millennials in the UAE and Saudi Arabia follow at least one social media influencer. Therefore, cooperating with different categories of KOLs in various stages of the game can quickly promote game localization, and combined with KOL live broadcasts, can have a deeper conversation with player users.

However, it should be noted that due to religious and cultural constraints, the scale of internet celebrities in the Middle East is relatively lagging behind compared to the development level of European, American, and Southeast Asian countries, and the development environment for internet celebrities is also relatively closed. Many Middle Eastern internet celebrities will sign with corresponding MCN companies, but the prices of internet celebrities contacted through MCN companies are generally higher. In addition, according to Nox Polaris’ experience in first-line internet celebrity marketing, Arabic-speaking internet celebrities have poor credibility, and their drop-out and breach rates are much higher than those of Southeast Asian and European and American internet celebrities, so extra attention is needed.

In addition to online traffic acquisition, offline promotion is also a good way. In recent years, the Saudi government has strongly supported the game esports industry, and there have been hundreds of esports cafes in Saudi Arabia. This unique commercial form undoubtedly provides valuable opportunities for offline marketing.

04. Summary

In the short term, localizing well for the Middle East can bring relatively large benefits, but in the long term, innovation in subject matter and gameplay is the important condition for winning in the Middle East. Whether it is SLG+ match-three or match-three + second dimension, every innovation in gameplay and subject matter can bring new breakthroughs.

Secondly, faced with the strong social needs of Middle Eastern players, the growth rate of Middle Eastern super casual games is very rapid. Since the outbreak of the global epidemic, the social elements in games have gradually become important. For the Middle Eastern market, the conservative and repressed social atmosphere offline undoubtedly breeds a greater desire for online socializing.

Finally, for the early stage of the development of the Middle Eastern gaming market, both market size and revenue growth rate need to be further explored. In addition to the stable development of male users, female users have also shown great potential. Data shows that female users perform well in heavy-duty gaming and super casual gaming fields.

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