Abu Dhabi is sinking a small fortune in venture capital investment into two regional online gaming companies to bolster the fledgling digital sector in the Middle East.
Twofour54 ibtikar, an Abu Dhabi government-sponsored capital investment firm, announced yesterday that it has inked two separate deals to provide more than Dh9.2 million in seed money for Tahadi Games as well as Jawaker.
Wayne Borg, deputy CEO and chief operating officer at twofour54, said the investments fit well with the company?s vision of making Abu Dhabi ?the centre of excellence of Arabic content across all sectors.
?In essence, we?re very keen on the digital sector as a massive area of growth,? he said.
In its infancy
Borg said capital investment is helping to create the skill set, knowledge base and employment needed for a modern cultural industry that is relatively still in its infancy.
?Creative entrepreneurship is a fundamental aspect of what we?re doing,? he said.
By all accounts, growing internet penetration, a tech savvy younger population and coordinated plans by telecoms to upgrade to fourth-generation broadband services in the UAE and beyond have set the burgeoning digital online industry on a path to high growth in coming years.
Borg said the time is ripe for capital investment noting the combination means ?the growth is there?.
Technology research firm Gartner estimates global online spending this year of $11.8 billion (Dh43.34 billion) will balloon to some $28.5 billion revenues by 2015.
Estimates by established global gaming companies have pegged the annual spend on gaming in the Middle East between $750 million and $1 billion.
Steve Tsao, CEO of Tahadi, said new venture capital investment ?will allow us to do more in terms of content and people.
?We want to look for talented passionate people about games and interactive media,? he said.
Tahadi was forged several years ago and is enjoying roughly 100 per cent year-on-year growth in the early stages of the company, an online games publisher for multiplayer online games in the Middle East.
Since its formation in December 2008, Tahadi has released four online games of the role-playing genre and will release a new first-person shooter online game in coming weeks.
High demand
The offerings answer high demand for online games in the Arab region where the majority of games being played are pirated by gamers because prices of licensed software are either too steep or the access threshold is too low, he said.
Tahadi has a different approach to meet both demand and to build revenues.
?Our business model is that we give games away for free. You create an account. We generate revenue through in-game purchases and advertising,? Tsao told Gulf News.
In-game purchases represent about 95 per cent of Tahadi?s revenue while the remainder comes from online advertising, he said.
The new capital injection will help the company spread its wings by doubling its staff in Abu Dhabi to about 40 by 2012 which will provide more hands to build a growing stable of games, Tsao said. The company also employs a further 25 staff in its Egypt offices.
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Source: http://www.digitalnewsme.com/?p=377
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