The MENA region has seen steady growth over recent years and with its youthful population, the high usage of mobile phones and broad access to the Internet, the region is only expected to continue to boom. For developers looking to reach even wider audiences, the MENA market could be the perfect match.
In this guest post, Xsolla president Chris Hewish shares why diverse payment options are critical to reaching players in the MENA region.
The Middle East and North Africa (MENA) games market is one of the fastest growing in the globe.
Niko Partners reports that the MENA-3 region alone - which includes Saudi Arabia, United Arab Emirates and Egypt - generated $1.8 billion in 2022 and is forecast to grow to $2.8 billion in 2026 at a 5-year CAGR of nearly 10%. The number of players across these three countries, meanwhile, is currently estimated at 67.4 million and is expected to rise to 87.3 million in 2026.
MENA’s remarkable growth is largely due to a combination of cultural shifts, improved regional infrastructure such as broadband and mobile internet access, and a growing youth demographic.
Data from Internet World Stats shows nearly 80% of the Middle East's population now has access to the Internet, rising to over 90% and 98%, respectively for UAE and Saudi Arabia - two of the countries leading the gaming boom in the region. The Middle East Youth Initiative found that 60% of the population in the Arab countries are under 25 years-old.
As a result, overseas game developers and publishers are looking to MENA as an emerging territory to expand their audience and increase profitability. The region is also emerging as a hub for the gaming industry in its own right, featuring companies including Sandsoft Games (Riyadh), Tamatem Games (Amman) and Babil (Dubai). Meanwhile, Saudi Arabia’s Public Investment Fund is set to invest $38 billion into the sector, hoping that serious backing such as this will put their country's game industry on the map.
Localisation goes beyond language
Xsolla offers User Interface (UI) localisation in more than 20 languages - one of which is Arabic - but MENA is a diverse and varied region with specialised needs. Even with the strong growth of games in general, in-game spend has yet to be maximised due to the widespread use of cash and a lack of local support for the established payment methods western companies and consumers are most familiar with, such as Visa, Mastercard or PayPal.
In Islamic finance, money is considered to have no intrinsic value. Money lending for profit and the charging of interest is forbidden, meaning the use of credit cards is limited. While debit cards are permissible, this partly explains why cash remains a preferred payment option for many in MENA, while others look to emerging payment methods such as smartphone wallets. According to Boku’s Mobile Wallets Report 2021, the number of mobile wallets in use are expected to reach 4.8 billion by 2025.
Physical currency in the digital world
With remote populations in the region not having convenient access to physical bank branches for deposits or withdrawals, cash remains a key part of Islamic compliant online payment systems. Customers often make payments via Point Of Sale (POS) systems at kiosks and convenience stores or push payments via Automated Teller Machines (ATMs).
For a more consumer-friendly alternative, yStats reports that more than half of online shoppers choose to pay cash on delivery where possible. That's where companies such as BCashy come in. Rather than going to a store or ATM to pay for a purchase, customers share their location for a driver to visit within the hour to collect payment. BCashy specifically targets gaming communities in Saudi Arabia, UAE, Bahrain, Egypt and Jordan.
One of the ways that MENA gamers can make payments from their mobile phones is by using direct carrier billing. This enables game vendors to reach unbanked players who can pre-pay their mobile network and top up their account balance before making a purchase. Another pre-pay option is AliPay. The world's largest mobile payment platform, which overtook PayPal globally in 2014 and is now partnered with well-established financial institutions in the region such as the Qatar National Bank (QNB) and First Abu Dhabi Bank (FAB).
There's no doubt that the MENA games market has surged ahead in the last decade, and is set to continue to enjoy similar growth in the coming years, further boosted by significant government investment. It's an incredible success story with unique circumstances, challenges and opportunities.
Such a rich and diverse culture deserves the attention of the global games industry at large, but it demands payment solutions tailored to regional habits - one size doesn't fit all here. That's why it's essential for game publishers to offer a more diverse range of digital payment options, such as carrier billing and pre-pay mobile processes to make the most of marvellous MENA.
Edited by Paige Cook