Saudi Arabia leads MENA in VC investments and games market growth in 2024

• The government has launched the National Gaming and Esports Strategy (NGES) to capitalise on the county’s video games potential

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Saudi Arabia led the MENA region in investment volume after securing 51% of the $429 million invested across 163 deals in Q1 2024. 

This is according to a 2024 State of Web3 in Saudi Arabia report by VC firm and accelerator Adaverse which also shows that the Kingdom of Saudi Arabia has become the largest component in the MENA games market with a projected regional value of $6 billion by 2027. 

With 21 million active gamers, accounting for 58% of the country’s population, the KSA has a strong foundation for industry growth, making it an ideal region for Web3 startups seeking funding opportunities.

The role of investors

Saudi Arabia’s startup ecosystem is organised into four layers: user-facing applications, tools for developers, infrastructure, and foundational protocols. 

While there is a strong focus on consumer-facing applications like DeFi, GameFi, and SocialFi, indicating rising local interest, there is a noticeable lack of startups in the infrastructure and protocol layers. 

This gap presents significant opportunities for entrepreneurs and investors, both local and international to develop and support foundational elements of the ecosystem.

Video games opportunities 

Saudi Arabia’s government has launched the National Gaming and Esports Strategy (NGES) to capitalise on the county’s video games potential as it aims to create 39,000 jobs and contribute $12 billion to the economy by 2030. 

The Kingdom now holds nearly a 45% share of the Middle East’s games market which is valued at over $1.8 billion. However, while Saudi Arabia dominates the regional games landscape, the adoption of Web3 games remains slow.

This leaves the door open for young entrepreneurs to lead the development of blockchain-based games and integrate emerging technologies like NFTs, AI, and play-to-earn models into the market.

The government’s active support

Saudi Arabia is taking a proactive approach to regulating and supporting Web3 technologies, with key government bodies like the Communications, Space & Technology Commission (CST) providing guidelines and financial backing for blockchain projects. 

Since October 2022, CST has issued important guidelines and reports to promote best practices and explore blockchain applications in sectors like government, media, and real estate. 

The King Abdulaziz City for Science and Technology (KACST) has also partnered with Animoca Brands to create a Web3 Hub focused on research and education in blockchain, AI, and the metaverse. 

“Since 2021, we have been actively building in the Web3 space across Asia and Africa. In 2023, we were excited to expand our efforts to the Middle East, with Saudi Arabia being an obvious choice to set up shop in, due to several factors, such as the country’s young, techsavvy population and supportive, forward-looking government,” said Vincent Li, investor and founding partner of Adaverse. 

You can read the full report here.