Animoca Brands, a leading name in blockchain gaming, is taking significant strides in the burgeoning Web3 sphere in Saudi Arabia, following a recent memorandum of understanding with the nation’s premier scientific institution, as disclosed by Yat Siu, the company’s co-founder and chairman. The Hong Kong-based unicorn’s expansion into the Saudi market includes a collaboration with King Abdulaziz City for Science and Technology (KACST), which was formalized during the Leap conference in Riyadh. Alongside Animoca, Hong Kong Science and Technology Park (HKSTP) and Cyberport also established partnerships with KACST.
Contrary to many other participants at Leap, Animoca Brands has concentrated on capturing the nascent opportunities in Web3 gaming. The company’s investment in the Neom smart city project in northwest Saudi Arabia exemplifies its commitment to the region. Having established a presence in the United Arab Emirates, where Dubai serves as a regional Web3 hub, Animoca now aims to be a part of Saudi Arabia’s early-stage Web3 landscape.
Most of our investments are all over the world. But our priority in terms of building out infrastructure and business operations is definitely Saudi,
Siu explained, noting the substantial gaming population within the country. He contrasted Dubai’s export-driven market with Saudi Arabia’s impressive average revenues per user (ARPU) in gaming, which eclipses many Southeast Asian markets.
According to Statista Market Insights, Saudi Arabia boasted an ARPU of US$370.90 across all video game segments last year, far surpassing the global average of US$200.60. These figures starkly contrast with ARPU in Southeast Asian countries like the Philippines, Malaysia, and Vietnam.
The potential for Web3 gaming in these markets is significant. For instance, Pixels, a game from Animoca’s portfolio, has gained popularity in the Philippines, allowing players to earn cryptocurrency through virtual farming activities. Animoca spearheaded a funding round for Pixels in 2022, with a US$2.4 million investment.
Siu remains optimistic about the prospects of Web3 gaming, especially in areas like Southeast Asia where digital property rights and capitalist opportunities are highly valued. However, he acknowledged that in Saudi Arabia, the frameworks for Web3 development are still in their infancy and require careful design.
As the Web3 sector evolves, the challenge lies in convincing gamers of the transformative potential of blockchain in terms of ownership of in-game assets. Industry experts have suggested that blockchain could revolutionize gaming by enabling asset transferability between platforms. For now, Web3 gaming primarily consists of simpler casual games, a starting point that mirrors the early days of mobile gaming.
Animoca is not shying away from ambitious projects, with significant investments in AAA games, such as Phantom Galaxies developed by subsidiary Blowfish Studios. Despite mixed reviews on Steam, where Web3 elements have been omitted due to platform restrictions, the company remains committed to its vision.
The fluctuating crypto market, particularly the downturn in 2022, has posed challenges for Animoca, given its holdings in crypto assets. Nevertheless, a recent market rebound, with bitcoin reaching record prices, has been a positive turn of events for the company. Obviously 2023 was a difficult year,
Siu remarked, but values have increased dramatically this year, which is going to have a material impact.