• Uncategorized

Saudi Arabia Explores Blockchain Gaming and Web3 to Drive Economic Diversification

by Swati Gupta

September 11, 2023 22

Saudi Arabia is intensifying its efforts to diversify its economy, a central goal of its ambitious Vision 2030 initiative. As part of this strategy, the kingdom is embracing emerging technologies like blockchain and artificial intelligence (AI) and is tapping into thriving sectors such as gaming. While Saudi Arabia is yet to make a substantial global impact in the gaming and AI development sphere, experts in the field of Web3 believe that its investments in the gaming sector could have far-reaching consequences.

Yat Siu, co-founder of Animoca Brands, remarked on Saudi Arabia’s interest in Web3, stating, “Based on our work and communications that we have, Saudi [Arabia] is very, very interested in Web3.” Siu highlighted the kingdom’s collaborations with entities like The Sandbox and Animoca, suggesting a genuine effort by Saudi Arabia to venture into the next iteration of the internet. He emphasized that Web3 gaming or blockchain gaming, which validates ownership of assets, is likely the future of gaming. Saudi Arabia’s young and tech-savvy population has played a significant role in driving the growth of the Middle East’s gaming market, with the kingdom representing 45% of the sector in the region, valued at over $1.8 billion, according to a Boston Consulting Group report.

Saudi Arabia established the Saudi Esports Federation in 2017 to regulate and develop its gaming industry. The country’s commitment to gaming is underscored by its investment of $38 billion in the sector, facilitated by the Public Investment Fund, as it aspires to become a global gaming hub. However, despite grasping the high-level concept of Web3 and its potential alignment with esports, including teams owning stakes in the games they play, the integration of cryptocurrency and virtual assets into gaming remains unclear due to the absence of clear regulations.

Siu commented on Saudi Arabia’s approach to cryptocurrency, stating, “Cryptocurrency is something that is still to be explored. It’s being investigated. I think [Saudi Arabia is] quite forward about how to deal with it. But they haven’t come up with anything yet.” In contrast, countries like Hong Kong, Japan, and the UAE have more clarity regarding the use of crypto and Web3, allowing for the formulation of strategies in these domains.

While the specifics of Saudi Arabia’s Web3 gaming applications are yet to be determined, Siu highlighted the kingdom’s eagerness to learn and engage with other markets. Saudi Arabia seeks best practices and cutting-edge knowledge, making it a unique player in the Web3 space. Siu added, “You can feel sort of the desire to have progress and to lead in Saudi Arabia. I think that’s kind of unique.”

Driving Web3 Adoption Through Gaming

Despite resistance from traditional gaming communities and developers, Yat Siu believes that converting users to Web3, whether in gaming or other areas, requires a certain level of financial literacy. Siu stated, “You can’t really be a true Web3 user if you don’t have at least a certain level of financial literacy that goes above and beyond having a bank account.” He emphasized that Web3 users tend to have a better understanding of investing compared to Web2 users, who are primarily labor-oriented individuals.

Siu stressed the importance of making Web2 users aware of the potential value of their assets in the Web3 realm. This includes educating them about the unique network effects and opportunities associated with these assets. While the adoption of Web3 in the gaming sector may be progressing at a slower pace, John Linden, CEO of Mythical Games, noted that some progress is already evident. Linden pointed out that people are starting to grasp the concept of buying and selling digital assets, indicating a growing awareness of Web3 principles within the gaming community.