< PreviousTHE INDOOR GENERATION: THE RISE OF GAMING IN THE MIDDLE EASTarabianbusiness.com 41 The Middle East boasts the world’s fastest growing gaming market, with a whopping 25 percent annual revenue growth. But ahead of the Digital Games Conference (DGC) in Dubai, insiders tell Arabian Business the region underinvests in its gamers BY IMOGEN LILLYWHITE42 Vol. 21/06, March 2020 FEATURE / C O-LIVING SPAC E S of the rigours of traditional sport, has also meant that negative perceptions are begin- ning to change. A game far from over The sector has massive audience potential particularly in the region through smart- phone usage, which doubled in the Middle East and North Africa region between 2014 and 2019. Habib Chams, head of Digital Games Conferencing, ITP Gaming, puts the value of the regional market at up to $4bn annually, with the potential to double within the next few years, while the global AMING AND THE MIDDLE EAST might just be a match made in tech heaven. You’ve got a youthful, tech-savvy population inclined to find modes of indoor entertain- ment for a substantial part of the year when scorching hot temperatures leave little else to do. It’s no wonder the sector is experi- encing 25 percent annual growth. While gaming has its fair share of detrac- tors concerned with its addictive qualities - and the perception that it is simply a waste of time - it has only continued to grow in popularity, thanks in part to platforms like PlayStation, XBox and Nintendo, standard personal computers (PCs) tablets and of course, smartphones, with 2 billion people globally falling into the category of “gamer” according to WePC. The rise of esports, which is gaming taken to a professional standard with “athletes” who make a living playing games and experience something market is valued at $140bn, three times that of the Hollywood film industry. While some high profile games cannot be played in Middle Eastern territories due to content restrictions, most of the biggest hitters are present, including League of Legends, which pulls in annual revenues of $1.6 bn globally according to Inc, and the ubiquitous Candy Crush Saga, which took $930m between August 2017 and July 2018. Chams, who is behind DGC Dubai, says the region needs to set about strengthen- ing an eco-system so that home grown publishers and developers have the oppor- tunity to achieve the same phenomenal success as their counterparts in North America, Europe and Asia. He says he is aware that one of the world’s biggest games publishers had attempted to set up offices in the region, but had not been able to find the talent to do so. “We are having this whole growth, this u Dubai is mulling plans for a feasibility study into the possibility of setting up a free zone dedicated to gaming $821m The size of the e-gaming market in the GCC by 2021, according to consulting fi rm Strategy& Garabianbusiness.com 43 whole interest, but we are not following up with the demand of what this needs, which is a lot of skills. There is currently no univer- sity or institute that is dedicated to teach- ing game degrees. I am sure today that the younger generation would be more than happy to take that academic route, but this is part of the challenge,” he says. While the undeveloped ecosystem means homegrown game developers focus on selling within the region, Chams says global big hitters are profiting, particu- larly when they introduce locally focused content, be it culturally attuned to the Middle East, relating to its history, or, in the Arabic language, with high profile games Fortnite and Clash of Clans having recently introduced Arabic language options. This is particularly successful in the Middle East’s biggest games market, Saudi Arabia “The more games are localised, the more we have seen that they are doing better. If a game is translated into Arabic, if some games are translated into history with Arabic content or Arabic history, they are also doing better,” Chams says, with some Chinese developers such as Menamobile and Tap4Fun now developing games solely for the Middle Eastern market. Back to virtual reality While the Middle East’s population may be small in comparison to Asia, in the Gulf particularly, its high gross domestic prod- uct (GDP) per capita, means that users have the disposable income to invest in games. Meanwhile, the UAE is taking strides forward in the fields of virtual reality (VR) gaming, having already invested in making it part of its location-based entertainment offering, specifically at The Dubai Mall, home to the world’s largest VR Park. Abu Dhabi is also set to open the world’s first esports academy, along with its own VR u The gaming industry is a $148.8bn global enter- prise – and is continuing its upward trajectory 112 million players Earned $727m in 2019 247 million monthly active users44 Vol. 21/06, March 2020 FEATURE / G AMING sq m VR Park, esports academy and events space for gaming and technology at Abu Dhabi’s Al Qana development. Finally, Robocom is also the VR partner for another Pixel Planet due to open at the American Dream Mall in in New Jersey in the USA. Ibrahim echoes Chams’ concerns that an ecosystem which can allow the gaming industry to develop is not yet in place in the Middle East: “If we [in the Middle East] were to compare ourselves with Europe Park and events space at Al Qana, a water- front entertainment destination currently in development and expected to be completed in December. Karim Ibrahim, CEO of Beirut-based start-up Robocom, is a proponent of VR, believing it to be the inevitable future of gaming, even though it has yet to achieve its expected status in the sector. Ibrahim, whose company specialises in both VR hardware and game develop- ment, likened the likely progression to VR in gaming to that of the rapid develop- ment of mobile phone technology, with users switching from simple voice and text enabled devices to internet-ready smart- phones within less than a generation. So it will be with VR, he says. “Give gamers 10 years, they are going to look at the PC like sticks and stones, and ask: ‘How did we play games on those?’ They are going to want a more immersive experience,” he says. Ibrahim also disagrees with the wisdom that the lack of development of VR hard- ware, with bulky, uncomfortable headsets for example, has slowed growth, saying billions are being poured into their devel- opment by giants including Samsung, meaning the technology has now reached a stage of maturity. But, the lack of growth has been caused by VR not having the community in place, he says. “The problem with VR is that it never did attract customers to location-based enter- tainment [such as arcades] for them to create a community and interact with each other, to make it mainstream enough for it to become a household product, so that people would start shifting into VR, which is the evident future of gaming. The only way I realised that that would be possible is to bring on the big brands to join forces with location-based entertainment.” Robocom has done that through partnering with the likes of Hasbro to produce a Transformers VR, in which users experience the game as Trans- former character - morphing from the car into the Autobot. Another concept in the making is based on Back to the Future, in which users will experience a time capsule-style simulation travelling through different periods of history. Ibrahim’s company is one of five VR experience providers partnering with The Dubai Mall for its VR Park, and it will be the exclusive provider for Pixel Planet, a 4,000 u Spanning 4,000 sq m, VR Park in Dubai Mall is the largest indoor virtual reality park in the world u Karim Ibrahim, CEO of Beirut-based start-up Robocom or the USA, or even Asia, they are very community-oriented, they really invest in their communities. For example, they have gaming centres where you can learn to develop games for free, they have online platforms where you can connect. They have meet ups at schools, it’s become part of the educational curriculum,” he says, adding that instead of considering time spent playing games as wasted, the region needs to understand that they must find arabianbusiness.com 45 / G AMING u The UAE is the biggest e-gaming market in the Middle East Coronavirus (Covid-19) and its impact on gaming The impact of the coronavirus outbreak is being felt across all industries. One of the region’s highest profi le games industry events, DGC Dubai, due to take place in April, has been postponed until June 22-22, following news that Game Developers Conference (GDC) in San Francisco, has also been postponed. But, gaming itself is one of the industries that seems likely to emerge not only unscathed by economic shockwaves caused by the outbreak but having experienced significant growth. When it takes place in June, DGC Dubai, an annual conference which fosters relationships between interna- tional publishers and developers with local companies and creates oppor- tunities to advance young developers, will offer a video conferencing option across its B2B meeting platforms and live broadcast of conference sessions. Annual revenue of global games markets China $32.5bn USA $25.4bn Japan $14bn Germany $4.4bn UK $4.2bn Canada $2bn Russia $1.5bn Brazil $1.3bn India $819m Saudi Arabia $645m UAE $276m Egypt $205m Source: WePC ways to use games so they are beneficial. “We do not have that level of aware- ness as a Middle Eastern culture, and this is the fundamental problem with the growth here. Because people think if you are playing a game, you are wasting your time, but you are not wasting your time, this is how people in 2020 interact, this is how people consume their informa- tion,” he explains. As a VR proponent, it is unsurprising that Ibrahim cites VR content devel- opment as a key opportunity in the Middle East: “We are truly shining in this regard,” he says. “And we can highlight our success as an industry in content creation. If I were advis- ing anyone to get into anything it would be to specialise in VR content creation. Content creation via social media was the hyped thing to do, but in the future, it will be for VR, and I guarantee that.” He adds that VR as part of gaming is important for the Middle East thanks to its ability to unite. “In the gaming world, it is truly the only place in the world where your skin colour does not matter, your background does not matter, your ethnicity, religion, how much money you make, it is just about enjoying your time with the person right in front of you,” Ibrahim says. “The more connectivity, the more respon- siveness, the more interactivity there is, the more immersed, the better connection you have. I do think it’s very, very important for the region, to be able to unite us as one.” u Experts think 5 million people will call themselves esports fans by the end of 202046 Vol. 21/06, March 2020 Arabian Business shines a light on the all-important SME sector in the region, from success stories and VC news to expert insights Baby booming ENTREPRENE UR OF THE WEEK 6.45% The compound annual growth rate of the baby food market in the MEA from 2020 to 2025, according to Mordor Intelligence Mums are able to subscribe to certain products; starting from essentials (diapers and wipes) saving time and money and creating trust in the subscription e-commerce. We are the first subscription e-commerce service for diapers, wipes, baby and mum care in the region that is purely born through subscriptions. Our product is a very high premium service with a lot of added value and customisation. What is your business plan? We offer subscription bundles in which mums can fully customise and select which products they would like to receive every month and which products only occasionally. The technology is well developed to recognise how many of each product the baby at this age/size will use and we recommend certain bundles out of it. Most of the recommended box is advised from our doctors and specialists and the brands we are working with. When mums subscribe for the first time, they are given up to 25 percent off to really save money and ensure we are cheaper than any other traditional e-commerce and/or even retailers. Mums can cancel and/or put on hold the subscription any time and the system will properly advise, by SMS, email and even our customer service team by telephone, about the new box for the second month. They will be able to confirm sizes, add new products or cancel the subscription with no cost. The longer you subscribe, the more discount and benefits you will receive from Yalla Baby. Our boxes not only An online shop with a premium service for all things baby, Yalla Baby Box has a high level of customisation and aims to be the go-to solution for parents pinched for time, educating them with key facts about their little ones. Launched in September 2018, Yalla Baby Box is a flexible, monthly subscription box for all essential baby needs ranging from diapers and wipes to toys, baby care products and formula. In addition to these necessities, Yalla Baby Box drops in surprise treats for parents and their baby every month. Here, Francisco Pellegrini, CEO of Yalla Baby Box and managing partner at Eureka Labs Middle East, explains the secrets behind the successful start-up. When did you come up with the idea of Yalla Baby Box or realise there was a gap in the market for the business? At Eureka Labs we have more than 15 years’ experience in tech businesses, mostly e-commerce, with a background of three exits: Alamaula.com to ebay in 2011; in 2016, Mymarketplay to Naspers Group; and in 2017-18 Buscapé (Brazil) to Naspers Group. We believed this was a good moment to start new in the market, bringing our expertise in e-commerce, above all, subscription e-commerce. Eureka Labs is also the main shareholder in Bambox, a similar business to Yalla Baby Box, but in Argentina and soon launching in Brazil and other South American countries. Having a playbook in how to do subscription e-commerce for mums, we decided to come on board into the Middle East with a new proposition. This is when we set up Eureka Labs Middle East and we raised seed funding to start Yalla Baby Box. Yalla Baby Box is not only a combination of other propositions, such as Bambox or Honest (in US), it is also a good and new marketplace model. Francisco Pellegrini q WE ARE EXPECTING, AFTER THE NEXT SIX MONTHS, TO START OUR OPERATIONS IN SAUDI ARABIA AND IN TWO YEARS THE REST OF THE GCC” How Francisco Pellegrini, CEO of Yalla Baby Box is helping parents in the region save time and moneyarabianbusiness.com 47 $28.5bn The estimated value of the e-commerce market in the MENA region by 2022 contain the products mums select, we offer exclusive benefits from our partners and suppliers, such as discount vouchers, product sampling, special gifts for mum and baby and more customised products. We really offer a premium customer experience delivered for free straight to the doorsteps of mums. Is the company bootstrapped or have you raised capital from investors? Can you take us through your funding? We have raised seed fund (or pre-seed fund) from Saudi investors. Saudi Arabia is our main target (for investment) for the following years. What are your expansion plans? We are planning on getting the product market-fit in the UAE, increasing the number of subscribers and at the same time our operation capabilities. Thus, we will be able to increase the value of our start-up and put it on the next level. We are expecting, after the next six months, to start our operations in Saudi Arabia and in two years the rest of the GCC. We have set up a very efficient logistics operation in which we can deliver to any GCC country even from the UAE, becoming independent won’t have any restrictions except a minimal purchase order up to AED150-200. We offer monthly bundles with everything included and more for the four weeks. Our bundles start from AED200 approximately if you are buying diapers. When you subscribe – it means you would like to receive the service every month – Yalla Baby Box immediately gives you 15 percent off the bill and if you have any other benefits, such as a discount code, credit card with benefits (such as Platinum Card) or more, you will have even more discounts (up to 25 percent) out of the sub total with the 15 percent. Our pricing is very attractive for those mums that really want to save time and money. What is the best advice anyone has ever given you? Always listen to your customer’s feelings, realise of third parties. The same applies to our technology - we will be moving from Shopify Plus to our own platform in a few months. What is your pricing strategy? Mums can subscribe to any of our products, starting with diapers as main essential products, but they what your customer’s pains are and convert them into a value proposition for them. The simpler the better. Simplicity is the ultimate sophistication. If you could go back, what would you have done differently with the company? I should have avoided taking time to set up the company and started with a friendlier, simpler and more marketplace-oriented design following our subscription model. What is your vision for the company? We want to be the first subscription marketplace in the region for different basic and essential products; starting from babies; Yalla Baby, and moving to kids, women, men, etc. Offering the same playbook with monthly/weekly bundles, very customised and with high added value. q WE HAVE RAISED SEED FUND FROM SAUDI INVESTORS. SAUDI ARABIA IS OUR MAIN TARGET FOR INVESTMENT FOR THE FOLLOWING YEARS” q WE WE ARE THE FIRST SUBSCRIPTION E-COMMERCE SERVICE FOR DIAPERS, WIPES, BABY AND MUM CARE, IN THE REGION THAT IS PURELY BORN THROUGH SUBSCRIPTIONS” u Yalla Baby Box strives to provide mums with the largest product spectrum available q WE ARE PLANNING ON GETTING THE PRODUCT MARKET-FIT IN THE UAE, INCREASING THE NUMBER OF SUBSCRIBERS AND AT THE SAME TIME OUR OPERATION CAPABILITIES”Liquid assets 48 Vol. 21/06, March 2020 From New York and London to Hong Kong and Singapore, every major world city has had its fair share of the speakeasy culture, with some claiming the concept has even become a cliché. But in Dubai, it’s really just getting started. The concept of a speakeasy – English slang for a place where unlicensed liquor sales were made - began in the 1920s as a means to continue selling alcohol when the United States banned its sale, manufacture or transportation during the Prohibition era. The clandestine entertainment venues feature hidden entrances and rules of entry including passwords required for access. But the trend made a bigger buzz in 1999, when legendary bartender Sasha Petraske opened the fi rst-of-its-kind New York speakeasy bar Milk & Honey on New Year’s Eve and simultaneously revived the then-vulnerable cocktail culture through his use of mixers and sweeteners to mask the smell of alcohol. While Dubai hasn’t had the decades – or the Petraske - that New York had to develop its speakeasy culture, here are some of the city’s own hidden concepts. 1 Cartel Speakeasy nightclub Cartel is, as its name suggests, designed with infamous drug lords like Pablo Escobar in mind. A bright red neon sign even reads “Pablo was here”. Located above popular Mexican hotspot La Carnita in the Intercontinental Dubai Marina, Cartel requires a password for entry, but you can message them on Instagram and try your luck. We recommend you grab a bite at the La Cartina restaurant before heading upstairs. Their churros are to die for – even Pablo himself would agree... 2 Storyteller by Baba It claims to be the smallest bar in Dubai with a seating capacity of just 25 guests. Located behind a hidden door at the Westin Dubai Mina Seyahi, Storyteller by Baba customises drinks for each guest based on their personal story, giving each visitor a unique experience as they lounge in the intimate, dimly lit space adorned with archived images of famous faces including Ernest Hemingway. 3 KnoX The password’s in the name as all you have to do to get in is give two “KnoX” at a large metal door (if you can tell which one) to get into this speakeasy bar at the newly-opened Andaz Dubai The Palm. Calling all guests to “leave their inhibitions behind,” it promises to immerse them in a world where “rules could be broken and the underground becomes the only place you want to bring your tribe”. 4 The Luggage Room As it name suggests, this bar was merely a luggage room in the Millennium Place Marina before the hotel transformed it into a swanky, cosy hideaway with 1960’s décor and a hand-crafted cocktail menu. Pop in if you’re in the mood for some solo time or tell a few friends and enjoy old u Cartel is a speakeasy Dubai nightclub that requires visitors to provide a password for entry Can you keep a secret? The speakeasy culture is making its way into Dubai as demand rises for exclusive experiences 1arabianbusiness.com 49 school classics and even board games. Hint: you can fi nd The Luggage Room tucked away near the lobby. 5 Poppy This place was opened by one of the students of the fi rst masters of speakeasy bars. David Myers, also known as the Gypsy Chef, was taught by Sam Ross, a master mixologist at Petraske’s original Milk & Honey in New York. It gets busy on the weekends but it’s relaxed on weekdays, making it the perfect spot for an intimate drink or two. Poppy is located above Myers’ Italian restaurant Basta! In the Renaissance Downtown Hotel. 6 Flashback It’s located behind a secret door at Hollywood-themed hotel Paramount in Downtown Dubai. Ask the front desk for its location and enjoy a 1920’s Prohibition era-style theme complete with retro barstools and record players. It gets better: the secret bar has a secret room within it that’s used for private meetings and events 7 Nyx It’s located below Chef Izu Ani’s famous Greek restaurant Gaia in DIFC. Named after the Greek goddess of the night, secret club Nyx has hosted celebrities including rapper 50 Cent. But you won’t fi nd much about it online, or any pictures in fact. And if you’re not on the list, you’re not likely to get in. 8 Shoreditch The entrance is not your typical one, as guests need to walk through a dim-lit bathroom and down a fl ight of stairs to get to his hidden bar located near underground nightclub Industrial Avenue in The Westin Mina Seyahi. It’s where everyone heads for pre-drinks before the clubbing begins, so make sure you get in early. 9 Nippon Bottle Company It’s one of Dubai’s best-kept secrets and among the city’s fi rst speakeasy bars. Situated in the Dusit Thani hotel on Sheikh Zayed Road, it’s inspired by Japan’s whiskey and beer manufacturing scene, presenting a unique blend of drinks infl uenced by the Japanese drinking culture. 10 The Unlucky Cat It’s designed to transport visitors to the low-lit backstreets of Asia. Located inside popular Asian restaurant Miss Tess, which is known for its lively atmosphere and funky entertainment, The Unlucky Cat in Taj Dubai is relaxed and intimate, embodying the original laid back speakeasy style. 2 5 8 3 6 9 4 7 10Next >