Saudi Arabia, the oil-rich kingdom, is setting its sights on a new kind of wealth – the digital kind. As part of its ambitious Vision 2030 initiative to diversify its economy away from oil dependency, Saudi Arabia has been making substantial investments in emerging technologies, including blockchain and artificial intelligence (AI). These investments have also extended to the booming global gaming industry.
But the implications of Saudi Arabia’s foray into the gaming sector could reverberate far beyond the borders of the Middle East. Experts in the Web3 space, the next iteration of the internet, believe that the kingdom’s interest in this emerging paradigm could reshape the future of gaming worldwide.
Saudi Arabia’s Gaming Prowess
Driven by its young and tech-savvy population, Saudi Arabia is emerging as a gaming powerhouse in the Middle East. Together with the United Arab Emirates, it is propelling the growth of the regional gaming market. According to a Boston Consulting Group report, Saudi Arabia represents a staggering 45% of the gaming sector in the Middle East, with a total market value exceeding $1.8 billion. It is also home to one of the largest game revenues in the region.
In 2017, recognizing the potential of esports and gaming, the kingdom established the Saudi Esports Federation to regulate and develop the country’s gaming industry. Bloomberg reported a significant move in April, with Saudi Arabia’s Public Investment Fund investing a substantial $38 billion in the sector, marking its ambition to become a global gaming hub.
The Enigma of Web3 Integration
While Saudi Arabia demonstrates a high-level understanding of the principles underpinning Web3 and its potential alignment with esports, the exact nature of its integration into gaming remains unclear. This uncertainty stems from the absence of clear regulations regarding cryptocurrency and other virtual assets in the kingdom.
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Yat Siu, the co-founder of Animoca Brands, a leading player in the Web3 and gaming space, suggests that cryptocurrency’s role in gaming is still being explored and investigated by Saudi authorities. He believes that compared to places like Hong Kong, Japan, and the UAE, where there is more clarity on the use of crypto and Web3, Saudi Arabia is yet to formulate a comprehensive strategy.
However, Siu emphasizes that Saudi Arabia is not merely a passive observer in this space. It is actively seeking knowledge and best practices from industry leaders. The kingdom’s eagerness to stay on the cutting edge is unique and palpable.
In Siu’s view, the successful transition of users into the Web3 realm, whether in gaming or other domains, hinges on financial literacy. Becoming a true Web3 user requires a level of financial understanding beyond traditional banking. Siu argues that Web3 users are inherently investors who grasp the nuances of asset ownership and its potential value.
Simply providing users with a digital wallet is insufficient. The challenge lies in making them aware that what they possess is a valuable asset with various use cases and network effects that contribute to its real-world value.
Slow and Steady Web3 Adoption in Gaming
John Linden, CEO of Mythical Games, a prominent figure in the gaming industry, acknowledges that Web3 adoption in gaming is underway but proceeding at a measured pace. Players are beginning to understand the concept of buying and selling in-game assets, indicating an evolving awareness of the Web3 concept.
Linden emphasizes that the focus should not solely be on enabling income generation for gamers but on enhancing their overall gaming experience. New game models that incorporate elements of the creator economy, digital supply chains, guild ownership, and customizable in-game ecosystems are vital components of the Web3 gaming revolution.
The future is bright for Web3 gaming, with projections suggesting an onboarding of 50 to 100 million players within the next two years. With this evolving landscape, Saudi Arabia’s investments and pursuit of knowledge in the Web3 realm could significantly impact the global gaming industry, ushering in a new era of interactive, ownership-driven gameplay experiences.
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