An article by Kirill Gurskiy, Managing Director at GEM Capital.

Today, the Middle East and North Africa region stands at a unique and powerful inflection point. While traditionally strong in other sectors, MENA's most compelling venture capital opportunity now lies in its booming games industry.

Driven by a perfect storm of demographic trends, tech sector growth, and government support, MENA is on the cusp of becoming a global gaming powerhouse. The region is home to a community of hundreds of millions of gamers. This explosive demand, accelerated by visionary policy, marks the gaming sector as MENA's next defining investment frontier.

Young, digital-first population

MENA's most significant asset is its people: a remarkably young population, with over 60% under the age of 30, that views games not as a pastime, but as a primary form of entertainment and social connection.

This deeply engaged, tech-savvy audience represents a massive, ready-made gaming market of an estimated 559 million players – a figure that is nearly as large as that of North and Latin America combined (~599 million) and larger than Europe's (~454 million). Crucially, this represents only a fraction of the region's demographic potential, ensuring fertile ground for sustained growth and community-driven success in the years to come.

High monetisation potential

Beyond the sheer number of players, the market is distinguished by its exceptional spending power. Gamers in the key MENA markets, like Saudi Arabia and the UAE, are not just active, they are highly valuable customers. Buoyed by a high disposable income, a growing middle class, and the cultural importance of games, they exhibit a strong propensity to spend.

This high monetisation potential creates a commercial opportunity that is too compelling to ignore.

Unprecedented government support

The unprecedented government support for gaming in the MENA region is a fundamental changemaker, creating an environment unlike any other.

The UAE is actively positioning itself as a global gaming hub. Dubai's Program for Gaming 2033 aims to attract international companies and cultivate local talent, boosting the sector's economic contribution. The Emirate supports this vision with specialised licensing, tax exemptions in free zones (e.g., Dubai Internet City), and robust talent programs. Abu Dhabi complements this with initiatives such as the twofour54 hub, AD Gaming, and wide support from government institutions such as Abu Dhabi Investment Office and the Entertainment & Gaming Cluster.

Saudi Arabia is pursuing a similarly ambitious path through its National Gaming and Esports Strategy. With over 80 initiatives, the Kingdom is driving cutting-edge technology development and cultivating a lucrative ecosystem that empowers both local and international game developers.

This strategic, top-down approach, embraced across MENA, de-risks the market and provides a significant competitive advantage for companies operating in the region and for their investors, not only through reduced operational hurdles and access to talent, but also by offering long-term support in one of the fastest-growing global markets.

Abundant capital availability

MENA's gaming ecosystem is experiencing a massive capital influx from a broad range of investors, including dedicated VC firms like Impact46, Merak Capital, and GEM Capital, who are actively backing early-stage innovators, and larger late-stage investors seeking strategic opportunities.

This vibrant activity is evidenced by a flurry of recent deals. Just this past August, five deals with local gaming companies were announced – Fahy, Starvania Studios, Kammelna, Sheba Joy, and DaFluffs Games – raising over $56 million. And this is merely the opening act.

The investment pipeline is robust, with vast amounts of capital poised to enter the market from various sources. The scale of this upcoming wave is exemplified by Saudi Arabia’s Public Investment Fund (PIF). It has committed to investing $38 billion to the sector, most of which remains available for future investments, through Savvy Games Group.

This dynamic investment landscape provides local companies the fuel to develop world-class titles and scale. This financial advantage is a critical moat, allowing them to out-execute international competitors, secure follow-on funding, and maximise returns for their investors.

Balancing the opportunity

While the opportunity is clear, there are challenges that must be addressed for the sector to reach its full potential. The region faces a shortage of experienced game developers and creative talent compared to established hubs in Asia, Europe, and the US. Building original IP that resonates beyond the region will take time, and overreliance on government funding could create risks if policy priorities shift. High user acquisition costs and intense competition from global studios mean that local developers must focus on quality, differentiation, and sustainable business models.

The time for gaming is now

From an investor’s perspective, MENA's gaming revolution is underway. It’s about more than just games – it's about building a new, diversified innovation economy for the region. Gaming and creative tech are poised to become fundamental pillars, creating high-value jobs and engaging the youth with a dynamic, future-proof sector.

MENA's gaming sector possesses all the key elements for venture success: strong end-market demand, accelerating market size, and increasing institutional support. The same pattern emerged before in other regions, and MENA’s boom is most likely still in its earliest innings.

The region is playing to win – and so are investors.