01: China’s Esports Empire: Thriving in the Shadows of Middle Eastern Investments

Did you know? In 2024, China’s esports revenue is projected to hit an impressive US$3.8 billion. This growth is driven by the rising popularity of mobile esports, booming live-streaming platforms, and strong government support, contributing to an estimated annual growth rate of 4.61%. This makes China the second-largest esports market in the world, just behind the United States, which has led the global esports scene since its inception.

On the other hand, the Middle East (MENA) region generated around US$139.7 million in esports revenue in 2023. However, MENA is quickly catching up and is expected to contribute a larger share of global esports revenue by 2024. With Saudi Arabia leading the charge, the region's esports market is projected to reach US$835.2 million by 2030, growing at an impressive Compound Annual Growth Rate (CAGR) of 29.1% from 2024 onwards.

Both regions are shaping the future of esports in unique ways, setting the stage for a truly global competition.

Culture
On one hand, China’s esports culture is well-established and globally dominant. It has been supported by early government recognition (since 2003), corporate powerhouses like Tencent and NetEase, and a vast gaming audience. The country consistently excels in global competitions, such as the LPL and Dota 2 International, and boasts world-class infrastructure, with esports hubs in cities like Shanghai and Hangzhou. As a result, China leads in both revenue and competitive success.

On the other hand, the Middle East’s esports scene is rapidly growing, driven by a young and passionate audience, as well as government-backed initiatives like Saudi Arabia’s Vision 2030. Major investments, such as the $37.8 billion by Savvy Games Group, are also fueling the growth. Events like Gamers8 and teams like Falcon Esports and Nigma Galaxy are helping to put the region on the global esports map. With state-of-the-art arenas and localized content, the Middle East is quickly making a name for itself in the esports world.

Events

As you may already know, China has strong ties with top mobile and PC game developers around the world, backed by substantial investments in games like PUBG, HOK/AOV, League of Legends, Valorant, Fortnite, as well as smaller stakes in companies like Ubisoft and Activision Blizzard. These investments give China access to major tournaments, leagues, and circuits, such as VCT China, LPL, PMPL, ESL/IEMs in Dota 2 & CS2, and more. In 2024 alone, China had the privilege of hosting these top-tier esports events. Additionally, China played a pivotal role in the development of the World Electronic Sports Games (WESG) from 2016-2019, the world’s first truly international esports tournament, which has now evolved into the Esports World Cup (EWC 2024).

On the other hand, the MENA region is also making huge strides. Over the past few years, investment in esports has exploded, driven by Savvy Games Group, a subsidiary of Saudi Arabia's Public Investment Fund (PIF). As part of Saudi Arabia's Vision 2030 initiative, Savvy Games Group has made massive investments, including acquiring ESL FACEIT Group (EFG), which has enabled the region to organize top-tier esports events like the Esports World Cup (EWC 2024). The MENA region also hosted major events such as Gamers8 2024, PGL Major 2024, BLAST Premier 2024, and the PUBG Mobile Global Championship 2024, among many others.

Esports Teams

China has a vast roster of legendary esports talents and teams, such as EDward Gaming (EDG), Invictus Gaming (IG), FunPlus Phoenix (FPX), JD Gaming (JDG), Weibo Gaming, TYLOO, and many others. These teams have played a key role in shaping the esports scene and providing rising talent with opportunities, including high player salaries, world-class facilities, training programs, sponsorships, and cross-industry partnerships.

Historically, the MENA region has had several teams spread across multiple countries. However, recently, one team has dominated the regional scene — Team Falcons. Backed by the Saudi Esports Federation, Team Falcons has not only taken control of the local scene but has also begun making a splash in international competitions. Their success is partly due to recruiting legendary international esports players, which has also helped further develop the region’s esports scene. Besides Team Falcons, MENA is home to other strong teams like Nigma Galaxy (UAE), NASR Esports (UAE), Team RA'AD (Egypt), Anubis Gaming (Egypt), and more.

In conclusion, MENA esports teams are thriving thanks to heavy financial backing, both private and public. While still growing, these teams are starting to make their mark on the global stage, particularly in mobile and FPS games, where the region’s focus is strongest.

Game Studios

China and the MENA region have both been actively investing in game studios to strengthen their influence in the global gaming and esports industries. Each region has adopted unique strategies to expand its portfolios, build ecosystems, and secure dominance in the gaming market.

China’s gaming giant Tencent, the world’s largest gaming company, has made substantial investments and acquisitions in numerous global studios, including Riot Games, Epic Games, Supercell, Activision Blizzard, Ubisoft, and emerging gaming studios like PlatinumGames and Dontnod Entertainment. Tencent is focusing on cloud gaming and metaverse platforms. Another major Chinese player, NetEase, has made significant global investments, including in Quantic Dream, Bungie, and Nagoshi Studio. China has also invested in Perfect World Entertainment, a developer of MMORPGs and publisher of popular titles like Dota 2 and CS:GO in the region, as well as MiHoYo, the developer behind Genshin Impact, which is expanding aggressively with government-backed support.

On the other hand, MENA's investments are spearheaded by Savvy Games Group, backed by the Saudi Public Investment Fund (PIF). They have acquired studios like Scopely and SNK Corporation and have heavily invested in Embracer Group and Activision Blizzard. The UAE has also partnered with international studios to develop esports games locally and supports indie studios via incubators such as TwoFour54 in Abu Dhabi.

In conclusion, both China and MENA are making substantial investments in game studios to solidify their positions in the gaming and esports ecosystems. While China leads in global-scale acquisitions with massive stakes in AAA and indie studios, MENA is rapidly catching up with focused investments like Savvy Games Group’s acquisitions and regional development initiatives. Both regions are shaping the future of the global gaming industry, with MENA emerging as a challenger to China’s dominance.

Future?

China is expected to maintain its position as the global leader in esports revenue, with consistent year-over-year growth driven by its dominance in global esports, a strong gaming ecosystem and culture, and significant investments in infrastructure, particularly in cities like Hangzhou and Shanghai. However, the country faces challenges such as strict government regulations on gaming, including time limits for minors and content restrictions, as well as potential geopolitical tensions that could affect collaborations with global players.

The MENA region's growth is fueled by government-backed initiatives, an increase in esports events, and investments in infrastructure. Key factors contributing to this growth include massive investments from Saudi Arabia, the UAE, and Qatar, a youthful demographic, and a strong regional focus. However, challenges remain, including a limited number of homegrown game studios compared to global players and a nascent ecosystem outside of Saudi Arabia and the UAE.

India Corner: Where does India Stand?

In 2024, India’s esports market reached a size of US$200.7 million and is projected to grow at a compound annual growth rate (CAGR) of 18.1% from 2024 to 2033, reaching US$919.0 million by 2033. Key drivers behind this growth include increased internet penetration, widespread smartphone adoption, government recognition (with no more game bans), investments and sponsorships, and a youthful demographic. India's esports industry is on a strong upward trajectory, supported by technological advancements, a favorable demographic profile, and growing institutional support. With ongoing investment and infrastructure development, India is set to become a major player in the global esports economy in the years ahead.

Conclusion

To sum it up, the MENA region's rapid growth is a positive force for international esports, contributing to the overall cultural development of the industry. While there may be questions about their intentions, only time will tell. However, we should never underestimate the power of China, the esports giant, which continues to dominate the global gaming scene. Their influence deserves both respect and attention as we look to the future.