Saudi Arabia Explores Web3 Gaming Potential as Part of Diversification Efforts

Saudi Arabia Seeks Web3 Opportunities

Saudi Arabia is actively embracing emerging technologies and booming markets as it strives to diversify its economy away from oil dependency. While the country has yet to establish itself as a global player in the gaming and AI development sectors, experts in the Web3 space believe that the kingdom's investments in gaming could have far-reaching effects.

According to Yat Siu, co-founder of Animoca Brands, Saudi Arabia is "very, very interested" in Web3. Siu sees efforts from Saudi Arabia to venture into the new iteration of the internet through partnerships with entities like The Sandbox and Animoca. Siu believes that Saudi Arabia understands that Web3 gaming, which utilizes blockchain and proves ownership of assets, is the future of the gaming industry.

Gaming Takes Off in Saudi Arabia

Thanks to its young and tech-savvy population, Saudi Arabia is playing a significant role in the growth of the gaming market in the Middle East. With a value of over $1.8 billion, the kingdom represents 45% of the region's gaming sector, according to a Boston Consulting Group report. Saudi Arabia has also established the Saudi Esports Federation to regulate and develop its gaming industry.

In April, it was reported that Saudi Arabia's Public Investment Fund had invested $38 billion in the gaming sector with hopes of becoming a global gaming hub.

Challenges in Web3 Integration

While the Saudi government understands the concept of Web3, there is uncertainty surrounding its integration with gaming due to unclear rules on cryptocurrency and virtual assets. According to Siu, cryptocurrency is being investigated, but no regulations have been put in place yet. In contrast, countries like Hong Kong, Japan, and the United Arab Emirates have more clarity on the use of crypto and Web3, allowing them to develop strategies.

Despite the challenges, Saudi Arabia is actively learning from other markets and seeking best practices. Siu noted that the country has a strong desire to be at the cutting edge of technology and progress.

Financial Literacy Key to Web3 Adoption

To achieve mass adoption of Web3, Animoca co-founder Yat Siu believes that users need to have a certain level of financial literacy beyond just having a wallet. He argues that Web3 users should be capital investors who understand the potential value of their assets and how to maintain and use them effectively.

Meanwhile, John Linden, CEO of Mythical Games, acknowledges the slow adoption of Web3 in the gaming sector but sees progress in terms of understanding the concept of buying and selling assets. He believes that Web3 should enhance user experience and introduce new game models, ultimately attracting gamers to embrace the creator economy, digital supply chain, and ownership within games.

Linden projects that the Web3 gaming segment could onboard 50 to 100 million players in the next two years, with their own titles targeting 10 million players by the end of 2023.