The UAE is betting big on blockchain and winning

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The United Arab Emirates has established itself as a global hub for innovation, and gaming is at the heart of digital transformation. In 2023, the country’s gaming market reached a value of over $420 million and recorded a steady annual growth of 8.94%. This emerging market is supported by a passionate gaming culture; Nine in ten UAE adults identify as gamers, with 23% gaming for more than 11 hours a week. These figures are unique in the MENA region and reflect a unique appetite for gaming that the UAE is using to build a blockchain-powered future.

As the gaming industry shifts towards web3, the UAE is making bold moves to ensure its leadership in this sector. We all see a significant revival of blockchain gaming in 2024, with 4.4 million daily active wallets worldwide and $110 million in funding in Q3 alone. By 2025, blockchain gaming is expected to contribute $1 billion to the UAE economy, making the country a critical player in the global web3 gaming market, which is expected to reach $4 billion.

A rising star in Web3 games

Latest research places the UAE among the top 15 countries actively driving the web3 gaming industry, alongside China and Vietnam. This reflects the UAE’s aggressive push to integrate blockchain into gaming. The UAE sees web3 as a strategic asset; a way to redefine how games are developed, played and monetized.

Last year, Dubai Games Program 2023 announced a detailed roadmap designed to attract global players and local talent. The event included major game studios such as Ubisoft, which has previously established a regional development center in Abu Dhabi. Similarly, projects like Sandbox have found a natural home in Dubai, where the regulatory environment actively encourages frictionless developments rather than hindering them.

So there is strong support from leading studios integrating web3 games in the region. Twenty years ago we saw Silicon Valley providing a leading hub for commercialized technologies and influencing hundreds of startups. The UAE is doing the same for the blockchain industry, more specifically the web3 gaming industry.

Building an ecosystem, not just a market

While other regions such as Southeast Asia and Europe have also embraced the blockchain gaming industry, the UAE has been far ahead in creating comprehensive policies to attract new projects and make the sector a part of its digital economy. It’s not necessarily trying to create a market for Web3 gaming; instead, it is building an ecosystem. The UAE wants to be seen as the central point for all things web3. This is evident in recent initiatives such as Dubai’s DMCC Gaming Center and Abu Dhabi’s AD Gaming programme.

DMCC Gaming Center in Dubai is a high-tech gaming development facility housing more than 100 gaming businesses. The center provides easy access to comprehensive resources for these businesses, including financing opportunities, incubators, commercial space and highly skilled talent pools.

These are dynamic ecosystems that bring together developers, investors and thought leaders. Animoca Brands, a heavyweight in the blockchain gaming space, has further legitimized its global ambitions by actively engaging with Dubai’s ecosystem.

Abu Dhabi’s AD Gaming initiative goes a step further by emphasizing sustainability. Building a self-sustaining ecosystem that attracts and retains talent. Local startups benefit from mentorship, funding and access to a global network, while international developers find a welcoming environment to test and scale their projects.

AD Gaming has also partnered with Unity Technologies, the gaming engine behind every AAA title, to create a development program that will help students in AI, VR and game development gain industry experience.

NFTs and venture capital: The winning web3 formula

The UAE’s passion for web3 gaming also extends into the realm of NFTs. The role of NFTs in UAE’s web3 strategy is not just a digital art or gaming asset; they are integral to creating immersive and player-driven economies.

This approach has consistently made the country a magnet for global venture capital. Sequoia Capital, Andreessen Horowitz and other major players have invested heavily in UAE-based blockchain gaming projects, confident in the region’s potential to lead the industry.

Polygon, a blockchain scalability platform, is a prime example of this synergy. Backed by MENA-based funds, Polygon has accelerated development cycles by demonstrating how the UAE’s strategic investments are pushing projects to launch more efficiently and at greater scale.

The future is bright but full of challenges

Despite the developments in this sector, the road ahead is not without obstacles. Scalability remains a critical issue for blockchain gaming platforms. As user bases grow, so does the demand for high-speed, low-cost transactions.

The UAE has a strong technology infrastructure and regulatory environment for blockchain projects but it needs continuous improvements to handle this evolving space. But these challenges are not unique to the UAE. What sets it apart is its proactive approach to mitigation. The government’s clear regulatory framework offers vital stability in an industry prone to rapid change.

It is also important to note that UAE’s goals extend beyond gaming. The country’s broader economic transformation focuses on the holistic adoption of blockchain technology in every potential sector. Lessons learned from building a web3 gaming ecosystem will likely impact other industries, from finance to real estate. This cross-sector applicability makes the UAE’s investment in blockchain gaming a strategic move with far-reaching implications.

We expect more groundbreaking projects to emerge from the UAE in the next few years. Whether through local initiatives or global companies establishing a regional foothold, the UAE’s influence on web3 gaming will only increase.

The UAE’s passion for web3 gaming is audacious. But they are strategy-driven and supported by an ecosystem designed for success. From government initiatives to VC investments, every element of this ecosystem works in harmony to foster growth and innovation. The region’s ability to attract top talent, secure significant investments, and provide a stable regulatory environment has already positioned it as a leader in web3 gaming. While challenges such as scalability and market volatility will always remain, the UAE government’s current proactive approach is actively addressing these obstacles with practical solutions.

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Ilman Shazhaev is the founder and CEO of Bitcoin shooter Farcana. Ilman is an entrepreneur with a strong scientific background in artificial intelligence, gaming and web3. It has developed healthcare technology and gaming technology solutions used by businesses and governments around the world. A United Nations-recognized expert, Ilman is the author of 46 scientific articles and holds ten invention patents. His journey in Web3 began with the founding of Oneboost in 2017, and his passion for gaming led to the creation of Farcana, a game with a Bitcoin-backed prize pool. His work reshapes the gaming landscape by integrating web3 elements into mainstream games.