The Middle East is a booming market for the maturing video game industry thanks to better distribution and anti-piracy measures, according to David Reeves, a former president and CEO of Sony Europe.
According to Reeves, who retired from Sony this year and now works as a consultant in the video game industry, piracy was rife in the region even a few years ago, with most game titles for early consoles, such as Microsoft's Xbox, Sony's PlayStation and the Nintendo Game Cube, being easy to copy. But today, the Middle East presents about 11 per cent of the total console market for the PAL region, which includes most of Europe, Asia, Africa and South America. In 1995, the area presented only 0.1 percent of the total PAL region.
Reeves, who was in Dubai this week for Games09, a regional industry conference, said he estimates the global video game market to be worth about $40 to $45 billion. Regionally, the market is worth between $600 million and $1 billion.
Household penetration the percentage of people who own televisions and a gaming console - are also high in the region. In Germany, console penetration is 16 or 17 per cent, but in Saudi or Dubai or Abu Dhabi could be over 40, which Reeves attributes partly to a culture that remain indoors more than their Western counterparts. That growth had caught the attention of investors and sparked hopes that Middle East could see substantial growth in regional game development.
"I get calls from private investors and venture capitalists asking all the time whether this particular company or this particular publisher is worth investing in," he said. "They are seeing that you can get rich if you get the right content and people working with the right developer."
But making money from video games isn't easy.
"You can invest in a football team either in the US or in Europe and you can double you money - I'm talking billions - in three or four years," he said. "Can you do that in the video game industry? Maybe not."
For every 200 games made in a year for one platform, Reeves said only 10 or 11 become blockbusters. He estimates that 10 per cent of the games developed represent about 80 per cent of the industry's software revenue.
Reeves also says that video has changed in other ways too, and that over the last decade the industry has become more accepted as legitimate.
"It's become legitimized in the sense that people are coming in from business schools, they're coming in from fast moving consumers goods, they're coming in from finance houses, they're coming in from the music industry, the performing arts," he said.
Reeves recalls that Sony at one point had employed two ballet dancers to help the company learn about motion control. He said a number of countries, in particular, China, Singapore and Germany, have recognized the video games industry as source of employment.
As demand for local content grows, Reeves sees the industry set for further expansion..
Having video games with local content, which can include everything from Arabic subtitles to games focusing on regional imagery and music, aren't necessary. Many gamers in the Middle East, having literally grown up with Western and Eastern media, are happy to play games developed for the American, European or Asian markets, he says, but a culturally relevant title can easily outsell one developed elsewhere.
"The rule of thumb is a game can sell three times more if it's localised," he said.
But getting good local content isn't easy and can't be imported, he says.
"It has to come from an Arabic developer who is legitimate, rather than someone from the west who is bringing it in," he said.
"You have to be sensitive to the cultural aspects."
Developing local content can also help mitigate problems with games developed outside the region that contain objectionable context, such as nudity or religious themes. A number of video games in the UAE have been banned for those reasons, but Reeves also points out that Australia and New Zealand also ban such games.
What Reeves suggests is that video game industry in the Middle East develop a screening board to help monitor content.
"The Middle East does need an authoritative industry body with statures, with teeth, which can filter these games before someone says "we ban it." They look at it first as they do in the UK and Europe."
