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TERRITORY REPORT: MIDDLE EAST THE FACTS
MARKET OVERVIEW by Chris Stanton-Jones
The region is still recovering from the economic recession.
The United Arab Emirates have
[SAUDI ARABIA] Population: 27,137,000 Currency: Saudi Riyal GDP (Per Capita): $23,701 Capital City: Riyadh Languages: Arabic
[UNITED ARAB EMIRATES] Population: 4,798,500 Currency: UAE Dirham GDP (Per Capita): $36,175 Capital City: Abu Dhabi Languages: Arabic
[EGYPT] Population: 79.089,650 Currency: Egyptian Pound GDP (Per Capita): $6,347 Capital City: Cairo Languages: Arabic
OTHER TERRITORIES: Afghanistan, Algeria, Armenia, Azerbajin, Bahrain, Comoros, Cyprus, Djibouti, Iran, Iraq, Israel, Jordan, Kazakhstan, Kuwait, Lebanon, Mauritania, Morocco, Oman, Pakistan, Quatar, Tunisia, Somalia, Syria, Tajikistan, Turkey, Turkmenistan, Uzbekistan
KEY RETAILERS Al Aqsa Computers, Bahrain Duty Free, Carrefour, Dubai Duty Free, Euphoria, Falcon, Games Centre, Geant, Geekay, Jarrir, Modern Home, Plug-Ins, Sharafs, Sored, Tokyo Games, Toys R Us, Virgin, Yusuf
DISTRIBUTORS Alesayi United Company (UAE)
DC GamesGroup (Iran)
Gibareio (Cyprus)
Goodtones Grat Games (Cyprus) Hed-Arzi (Israel)
Modern Pluto Trading (Saudi Arabia) NXT Global (Dubai)
Pluto Derinton Games (Egypt) Red Entertainment Distribution (Dubai)
been worst affected but most observers believe that this market’s issues have bottomed out, with mild growth expected this year. Other Middle Eastern territories have been affected to a lesser degree, and rising oil prices and a global economic recovery has created a more optimistic outlook for 2010 and beyond. The video games market has enjoyed even better news over the past year or so. In 2009, both hardware and software revenue grew by around 10 per cent year- on-year.
With the decline of trading in UAE and the more robust economy and growth of PS3 software business in Saudi, the latter has now emerged as the single largest software market in the region with over 40 per cent of all software revenues. Region-wide, trading was tough, particularly in the first half of 2009 and consumer spending, particularly in UAE was severely hit. However, business seems to have stabilised since.
Chris Stanton-Jones is the head of emerging markets specialists
Catapult Business Solutions.
www.catapultbusiness
solutions.com
SOFTWARE SALES
All software formats have seen a sales increase – except PS2 and PC, which are in decline. PS3 continues to be the main source of revenue, thanks to it being the only format that has not been pirated. There is also some potential on Xbox, PC and PSP but PS2, Wii and DS sales are negligible.
www.mcvuk.com MARKET VALUE €750m Total market value 2009 €150m Total Software
€600m Hardware
THE LATEST estimation for 2009 puts the market value at €750m. The region is primarily hardware-driven, with software accounting for just 20 per cent or €150m. Industry sources estimate that both hardware and software grew year-or-year at around 10 per cent. By comparison, the region’s film market declined by 15 per cent year-on-year.
As further testament to the impact games are having on the overall market, the PlayStation business became the strongest category for Sony’s local distributor Modern Electronics.
INSTALLED BASES
0 1 2 3 4 5 6
5.2m PS2
8,495m
Total console and handheld installed base
5.2m PSP
850k NDS 450k PS3
315k Wii
The PS2 still leads the way with an installed base of over five million, supported by sales of over 800,000 for the year to March 2010. Its successor has fared particularly well since Sony’s price drop last September 2009, with the PS3 now outselling the Xbox 360 in
180k 360
the Middle East by approximately 3:1.
However the 360’s market share is still growing, having doubled its sales in both 2008 and 2009. It now accounts for eight per cent in terms of the market in terms of units, but suffers from the lack of a local Xbox Live service.
GREY IMPORTS Like many territories, the Middle East is dogged by the rise of grey imports. It is estimated that roughly 30 per cent of the software market is imported. The US and Asia are the main sources of these titles, with the latter responsible for an estimated 120,000 PS3 games entering the market.
CENSORSHIP
The cultural sensitivities of the region makes releasing games such as Call of Dutydifficult. However, the nature of censorship is not the biggest issue. “There is very little communication between the relevant bodies and the industry, especially on the retail side,” says ACN Magazine’s Ben Furfie.
November 12th 2010 31
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