From coffee to consoles: How Ahmed Bin Sulayem is turning Dubai into a gaming hub
Ahmed Bin Sulayem follows his passions.
Running the massive Dubai Multi Commodities Centre, which was established in 2002 as a hub for the emirate’s flourishing diamond industry, Bin Sulayem channeled his deep love of coffee into creating a Middle East exchange for the caffeinated crop. The coffee division, which serves about 300 member companies, now includes warehouses for storing raw beans, industrial roasters, packaging lines, office suites, and a training institute for baristas.
Bin Sulayem, the DMCC’s Executive Chairman and CEO, is following a similar roadmap for computer gaming, an industry that has mushroomed into a $350 billion global market. Early on, the DMCC became a magnet for tech companies and now hosts firms active in artificial intelligence, cryptocurrencies, cybersecurity and digital finance.
But it’s his favorite video games such as “Street Fighter,” “Hitman,” ”Braid,” ”The Legend of Zelda,” and “Assassin’s Creed” that are fueling the current endeavor.
“I am a gaming addict,” Bin Sulayem told The Circuit in an interview. “That’s the future.”
Employing 90,000 people, DMCC is the city’s largest free-trade zone and functions as a semi-independent city within the Dubai metropolis. Its twin districts, Jumeirah Lakes Towers and Uptown Dubai, contain 87 commercial and residential buildings, with offices, apartments, restaurants, and retail stores. Starting from 28 companies when it opened almost a quarter-century ago, DMCC now counts 26,000 member companies from 180 countries.
The sprawling business district competes with the smaller Dubai International Financial Centre, which has about 8,800 companies, but contains the Gulf’s largest concentration of global banks and asset managers, including JPMorgan, Goldman Sachs and BlackRock. The DIFC is also a base for the world’s biggest hedge funds, such as Millennium and Point72.
Bin Sulayem, an intense, bearded man in his 40s, is the scion of one of Dubai’s wealthiest and most influential families. His father, Sultan Bin Sulayem, is the former Chairman and CEO of DP World, one of the world’s largest port and logistics companies.
The DMCC’s recent focus on developing computer games emerged from its burgeoning tech ecosystem and now includes more than 150 gaming companies, about 40% of the industry’s presence in Dubai. The city has set a target to create 30,000 new jobs in gaming companies by 2033, which is projected to contribute $1 billion to GDP. Analysts estimate the UAE gaming market could reach $2.4 billion in revenue over the next decade.
“I enjoy every now and then when the Arabic press covers some big news from DMCC and gaming,” Bin Sulayem said. “I call my mother. I tell her, ‘Open the newspaper.’ She looks at it and I say, ‘Remember when you were whipping me because I stayed up late playing video games? Just wanted you to know.’”
DMCC’s gaming push comes as Saudi Arabia has emerged as the region’s biggest force in the industry, with Crown Prince Mohammed bin Salman – himself an avid gamer – making gaming and esports a key part of his Vision 2030 economic program. The kingdom’s Public Investment Fund has spent a fortune on gaming companies, including the $55 billion acquisition of Electronic Arts, the largest leveraged buyout in history.
DMCC is taking a different approach, focusing on attracting game developers, startups and technology companies rather than buying major global publishers.
Mario Rizzo, co-founder and CEO of DMCC-based Artisan Studios, said he was drawn to Dubai almost five years ago by the potential to create something new. He saw the GCC’s young population, high player engagement, strong spending power, and the untapped potential of Arabic-language gaming as unique advantages.
“When I came here, actually, it was a little scary because I went and met with people, and nobody knew anything about gaming. It was like a completely blank slate,” Rizzo told The Circuit.
“If you come now as an investor, you participate in the growth. This is where you’ll get the highest return,” said Rizzo, a California native who previously worked at Sony and Electronic Arts. “If you wait, someone else will crack it first.”
In a report that Bin Sulayem wrote on developing gaming in both Dubai and across the GCC region, he points to the dearth of Arabic-language gaming and support as an important area for the region to focus on.
“The opportunity is one of full Arabic platform parity, i.e., right-to-left interface logic, Arabic typography, store layout, community moderation, support flows, and regional commerce,” Bin Sulayem writes.
Across the GCC, Bin Sulayem says the gaming industry is not underdeveloped, but shows a “distinct lack of parity with mature gaming markets” such as Japan, the U.S. and Western Europe.
“Players across the region already buy, subscribe, download, and stream socially at high levels of spend, and local studios are actively building increasingly sophisticated communities,” he writes.
Still, the “defining layers of the modern gaming experience, namely cloud streaming, Arabic-native storefronts, official hardware ecosystems, regional developer relations, and local payment rails, remain largely unbuilt or inconsistent across the region.”
Bin Sulayem sees lessons in institutional models elsewhere in the world, most notably in Canada and France, which became industry leaders through aggressive tax credits and developer subsidies.
”The UAE is uniquely positioned to adopt a bespoke version of these frameworks,” he said. “Where other regional markets focus on capital deployment, the UAE’s strategic advantage lies in policy innovation, regulatory stability, and ease of doing business.”
Saudi PIF closes in on $55 billion buyout of Electronic Arts
Almost a year after Saudi Arabia’s Public Investment Fund launched its bid for Electronic Arts, ardent gamer Crown Prince Mohammed bin Salman will take control tomorrow of one of the world’s largest video game companies.
The PIF’s $55 billion take-private deal for EA, backed by private equity firm Silver Lake and Jared Kushner’s Affinity Partners, is expected to formally close at the end of trading on Aug. 4, after clearing a last regulatory hurdle from the European Commission last week.
Electronic Arts oversees a large stable of gaming franchises, from “Battlefield” and “The Sims” to sporting titles like “EA Sports FC,” formally known as “FIFA.” “Battlefield 6” has been a huge hit, selling seven million copies in three days when it launched last October and even outselling “Call of Duty,” one of the Crown Prince’s favorite games.
But the deal, considered the biggest leveraged buyout in history, saddles the new owners with about $20 billion in debt, adding to concerns in the industry that it will lead to fresh rounds of consolidation, cost-cutting and layoffs.
This comes as the PIF’s willingness to pump billions into its trophy investments has been curbed since the deal was struck last September amid a broad reassessment of spending on Vision 2030 mega projects and the growing economic toll of the Iran conflict.
True Gamers wants to build a $280 million gaming island in Abu Dhabi
True Gamers is looking to up the ante on the business of video games in the Gulf.
The UAE-based gaming lounge and arena developer announced plans today for a $280 million gaming island in the Al Seef area of Abu Dhabi, providing a first-of-its-kind destination for pros and hobbyists of Fortnite, Counter-Strike and League of Legends.
The startup says it’s working with undisclosed investors for funding and discussions with developers are in the works.
True Gamers envisages a gaming-themed hotel, eSports camps for kids and a dedicated residence for professional players to prepare for major tournaments with healthy food, personal space and gaming equipment.
True Gamers was founded in 2019 and has 124 gaming halls in the UAE and Eastern Europe. Earlier this year, the company signed an agreement to open 150 clubs in Saudi Arabia with an investment of $45 million and a franchise deal with Saudi entrepreneur Nawaf Al-Bishri.
The demographics in the UAE and Saudi Arabia are supportive of the gaming push, where people skew younger and the pastime is wildly popular. Nearly half of the people in the UAE are under 35 and in the kingdom, it’s 70%.
Saudi Crown Prince Mohammed bin Salman, 38, is said to be a big Call of Duty fan. The Public Investment Fund, which he chairs, has earmarked $38 billion for an ambitious plan to attract 250 gaming companies and studios and create 39,000 video game-related jobs in the process, building its credentials in the e-arena with investments in the biggest players like Tencent, Nintendo, Activision Blizzard and Ubisoft.
Strauss Zelnick’s Take-Two buys Mark Pincus’s Zynga in $12.7 billion deal
Video game company Take-Two Interactive has reached a $12.7 billion deal to acquire rival company Zynga, catapulting the “Grand Theft Auto” creator into one of the industry’s most formidable game publishers.
The deal, one of the largest in video game history, was announced on Monday by Take-Two CEO Strauss Zelnick and Zynga CEO Frank Gibeau. Expected to be finalized later this year, the merger will unite Take-Two, which specializes in PC and console gaming, with Zynga, a free-to-play mobile-game behemoth.
The two executives, which described the purchase as a “hand-in-glove fit” in a Monday morning conference call, anticipate the merger will result in an annual cost savings of $100 million and an additional $500 million from improved collaboration between the two firms.
Under the terms of the deal, Take-Two will buy all outstanding shares of Zynga’s stock for $9.86 a share, a 64% premium on the company’s share price as of Friday afternoon. The acquisition will be paid in both cash and Take-Two’s stock, granting Zynga’s shareholders one-third ownership of Take-Two.
Zynga was founded by Mark Pincus in 2007 when it piloted an online poker game played on Facebook. Since then, Zynga has grown into a large company with $2.3 billion in sales in FY2020.
In a Medium post discussing the deal, Pincus described the “bittersweet moment” and thanked his colleagues over the years for his business’s success. “We’re seeing games expand in every direction from hyper casual to entire persistent worlds,” wrote Pincus. “I believe the company will have the franchises and scale to lead in every category.”
The different specializations of the two firms will complement each other as they now work together. Take-Two, which boasts hits including “Grand Theft Auto,” “NBA2K” and “Borderlands” produces games designed for PCs and consoles, but does not have free mobile versions. Zynga’s business model, which offers free mobile entertainment with in-app premium purchase options, has pioneered successes including “FarmVille” and “Words With Friends.”
With mobile gaming ascendant, Take-Two will benefit from Zynga’s mobile development team, which is expected to develop mobile options for Take-Two’s offerings. Under the planned acquisition, more than half of Take-Two’s projected bookings in Fiscal Year 2023 will come from mobile, diversifying Take-Two’s offerings and making it competitive with other developers as mobile gaming gains traction.
Zelnick called rolling out mobile options for Take-Two games a “high-priority initiative,” saying, “We see tremendous untapped potential to bring Take-Two’s renowned console and PC properties to mobile.”
Take-Two will also benefit from Zynga’s in-house advertising team, removing the added costs of outsourcing advertising operations.
The deal comes after the gaming industry enjoyed a boom during the pandemic, as social distancing interventions and lockdown restrictions pushed consumers to spend more time gaming, a trend that translated to large share price increases for both Take-Two and Zynga over the past two years. Yet Zynga’s stock tumbled last summer amidst societal reopening following COVID-19 shutdowns and after Apple instituted privacy reforms restricting how advertisers can track consumers on its devices, which made gaming less profitable.
Zynga has consistently maintained that its stock downturn from reopenings and Apple’s new privacy policy are transitory, and has remained optimistic about a stock rebound. On the Monday call, Zynga’s Gibeau said that these factors will not contribute to long-term drags on gaming, and explained that Zynga accepted a deal despite a feeling that its stock is undervalued because of the growth opportunities afforded in the new partnership.
“We saw incredible strengths available to us with regards to scale, data, audience expansion into new categories and product capabilities that would help us aggressively pursue cross platform. So from our perspective, we would be able to grow faster together. And the deal that was constructed in the framework with a 64% premium really put us into a position where we felt that this was the right course of action for our shareholders,” explained Gibeau.
The mammoth merger was evaluated by a strategic committee of independent directors from Zynga’s board and decided with unanimous approval from Zynga’s board of directors. Combined, the two companies reach over one billion users and employ 8,000 developers.
Zelnick will continue serving as Take-Two’s CEO, with the rest of Take-Two’s management remaining intact, while Zynga’s leadership team will assume responsibility for Take-Two’s mobile operations. Take-Two will also expand its board to accept two new directors from Zynga’s board.
