twofour54 Invests in Tahadi and Jawaker
2011 is not just a year of protests- it's the year of social gaming in the Middle East.
As global social gaming giant Zynga sits poised for an IPO at around a $10 billion valuation, MENA region deal flow is also heating up. Today, Arabic content fund twofour54 Ibtikar announced investment in social gaming sites Jawaker and Tahadi, marking the latest in a slew of investments in the emerging sector since January.
The move follows investment by IV Holdings in Wizards Productions- the creators of Arabian Mafia, the Arabic Mafia Wars- and online payment gateway Gate2Play, which brought Zynga game cards to the Middle East this month. The year has also seen Sony's partnership with Jordanian game developer Quirkat Studios to create Arabic card games, and Aranim's launch of Happy Oasis- the Arabic answer to Farmville- last month.
It's no surprise that investment is on the rise with the MENA gaming market estimated at $2.6 billion- 5% of the world's total gaming market- and rising. As 28-29% of MENA internet users cite online gaming as one of their favorite activities, and Saudi Arabia boasts the world's biggest individual spender on social games through payment platform Social Gold, it's clear the sector is ripe for further growth.
Many social gaming sites also face challenges in the region, and Jawaker and Tahadi are no exception.
Tahadi, a massive multiplayer online (MMO) game company established in 2008 by Jabbar Group, has not produced many games recently, following the launch of culturally-appropriate online role-playing game Ragnarok in 2009. It will be interesting to see if input from twofour54 kickstarts a new strategy.
Multiplayer card gaming website Jawaker has thus far generated a large online gaming community of over 500,000 registered users. By allowing gamers to use cards to purchase game features, through online payment gateway cashU, the site has worked around one of the region's biggest obstacles- low rates of banking and online cash transfer. But with Zynga also entering the game card space, it will be interesting to see if Jawaker steps up to compete, or pivots into a different market.
The investment also marks twofour54's first in social gaming, potentially a bid to make a bigger splash than they have thus far under a mandate to support Arabic content creation and media entrepreneurship- for companies that will relocate to Abu Dhabi. Successfully branding Abu Dhabi- and their incubator- as a social gaming hub would be a coup.
In a region previously dominated by giant German game developer Travian, and now dominated by the localization of global games, hopefully twofour54 Ibtikar will push developers to create more original content.