GAMETECH REPORT INSIGHTS FROM MENAPT POWERED BY FORWARD MAHMOUD ADI FOUNDING PARTNER POWERED BY SHOROOQ PARTNERS From Fintech infrastructure, software, platforms to agritech and healthtech, at Shorooq Partners we have always believed in backing exceptional founders who are transforming the way we live as individuals, do business & interact as communities, so we have backed more than 65 startups that have become regional and global success stories such as Pure Harvest, Nymcard, Lean Technologies, Mozn, Breadfast, Retailo, Trukker & Aumet. Tomorrow’s economy and opportunities however, are driven by innovation in sectors such as Gametech, Clean & Climate tech, Cloud Security and Web3 applications. We have witnessed a paradigm shift in how frontier technologies are fueling new ways of virtual interactions, payments, social commerce and data security. However, theres isn’t a critical mass of exceptional founders in these sectors in our region. At Shorooq Partners, we are taking a proactive step in developing a new wave of founders in sectors that we believe are at the brink of transformation. And we know that for true transformation to take place, we need founders who are equipped with the knowledge and tools to grow into the leaders of tomorrow. SHFT - Shorooq House of Frontier Technologies - was conceived as an engine to drive this mission and help incubate, develop and invest in founders building in the frontier tech space and looking to leverage today’s opportunities in driving tomorrow’s economy. With a year spent engaging with founders, ecosystem stakeholders and corporates in the gaming industry, we are excited for what the future holds for the region and call upon others to join our mission in forging tomorrows’ leaders alongside global and regional partners in our uniquely crafted incubator program and accelerators. This report is a compilation of our Learnings at SHFT and our engagement with key regional and global ecosystem players over the past year. In sharing these learning we hope to empower others with the knowledge required to grow the industry in our region and to foster collaboration between government entities, corporates and investor who share a common vision of realizing the potential of the gaming industry in MENAPT. Sharjah Media City has an ambitious vision to position Sharjah as a world-class hub for media and creativity in the region, to make creative entrepreneurship more accessible to talented creative individuals, and to inspire business growth. Our partnership with Shorooq Partners on the SHFT BUILD Gametech programme has allowed us to channel our resources towards driving innovation, supporting innovative projects, empowering ambitious, passionate e-Sports startup founders, and being their partner as they make their way towards progress and success. - His Excellency Dr. Khalid Omar Al Midfa, Chairman, Shams Programs such as SHFT Build Gametech have really brought forward a high caliber of founders and startups and this goes to show that the region has a lot to offer in advancing the gaming industry. The program has been built in a comprehensive manner alongside industry experts and We are always excited and supportive of collaborations that aim to support founders in the region. - Olivier Gamayel - Senior Games Venture Capital Business Development Manager, EMEA, AWS Gametech We all know that the region is grossly underrepresented on a global stage in esports and game development. It’s programs such as SHFT that will help accelerate the industry in the region and help address that so we are able to see more content, IP and talent from the region. -James Hartt - Strategy Director, TwoFour54 POWERED BY SHOROOQ PARTNERS VOICES FROM THE GAMING ECOSYSTEM As value investors, we have always been committed to being founders’ partners and developing ecosystems around industries that we believe will be shaping tomorrow’s economy. SHFT Build enables us to provide support, guidance and know-how for founders in their earliest stages, accelerating their growth. As well as supporting governments and corporations in leveraging opportunities within these sectors. - Tarek Fouad, Head of Growth, Shorooq Partners VOICES FROM THE GAMING ECOSYSTEM POWERED BY SHOROOQ PARTNERS The MEA region is the largest gameplayer region globally and the fastest growing. Given the national agendas and strategies focused around building the gaming industry in countries within the region, founders today are stepping into an era where game development and IP development is in high demand and will continue to be in the future. We are committed to raising the bar and developing the industry in the region on all levels. Our partnership with Shorooq Partners allows us to build world-class talent from the region through technical and business coaching. - Fasieh Mehta - UE Business Lead, MENA, Unreal MAIN HIGHLIGHTS GAMETECH REPORT STRONG GROWTH FOR THE GAMING INDUSTRY IS ENABLED BY ADVANCEMENT IN INFRASTRUCTURE AND ACCESSIBILITY WITH 77% OF GAMING REVENUE COMING FROM IN-GAME MONETIZATION 77% POWERED BY SHOROOQ PARTNERS GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 06 POWERED BY SHOROOQ PARTNERS 60% EVEN WITH 60% OF GAMERS IN MENAPT BEING FEMALES, FEMALE PARTICIPATION IN STARTUPS CONTINUE TO BE LOW GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 07 POWERED BY SHOROOQ PARTNERS MULTIPLAYER INTERACTIVITY AND CONNECTIVITY IS THE # 1 FEATURE AMONGST ALL TOP GROSSING GAMES ACROSS ALL PC, MOBILE AND CONSOLE GAMES 1 ST GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 08 $600M KSA LEADS THE GAMING INDUSTRY IN GAMING SPEND CONTRIBUTING MORE THAN 30% TO MENAPT GAMING REVENUE GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 09 INDUSTRY FOCUSED INCUBATION PROGRAMS SUCH AS SHFT BUILD CAN BE SUCCESSFUL IN ENHANCING FOUNDER COMPETENCIES BY MORE THAN 54% 54% GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 10 THE MENAPT REGION’S DOMESTIC MARKET IS THE FASTEST GROWING IN THE WORLD, TOUTING OVER 377 MILLION ESTIMATED PLAYERS 377M GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 11 STARTUPS IN THE MENAPT REGION ARE CONCENTRATED AROUND IP CREATION WITH 48% OF STARTUPS BEING GAME STUDIOS 48% GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 12 A GLOBAL OVERVIEW GAMETECH REPORT STRONG GROWTH FOR THE VIDEO GAME INDUSTRY ACROSS ALL PLATFORMS ENABLED BY INFRASTRUCTURE AND ACCESSIBILITY 2016 WAVE 1: SURGE OF MULTIPLATFORM AND MOBILE GAMING WAVE 2: SURGE OF SOCIAL GAMING, CLOUD AND SUBSCRIPTION SERVICES 2022 2024 E MOBILE GLOBAL CONSUMER VIDEO GAME REVENUE BY PLATFORM ($B) PC/MAC CONSLE 14% 5% 5% 9% 9% CAGR 50+% 26+% 24+% 6% 6% $43M $28M $30M $74M $103M $50M $45M $36M $36M 8% CAGR POWERED BY SHOROOQ PARTNERS CLOUD ADOPTION AND SUBSCRIPTIONS BEING THE MAIN DRIVERS OF GROWTH GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 14 [Source 01] Activate analysis, Newzoo, PricewaterhouseCoopers IN-GAME CONSOLE SUBSCRIPTION FULL-GAME DIGITAL FULL-GAME BOXED GLOBAL GAME REVENUES PER STREAM - FORECAST TOWARDS 2023 77% OF GAMING REVENUE COMES FROM IN-GAME MONETIZATION ACROSS ALL PLATFORMS IN-GAME REVENUES CAGR +9.6% 2018 12% 13% 70% 3% 2019 10% 13% 73% 3% 2020 9% 12% 74% 4% 2023 7% 11% 77% 4% POWERED BY SHOROOQ PARTNERS CONSUMERS ARE MOVING FROM BUYING BOXED GAMES TO MOBILE AND SUBSCRIPTIONS GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 15 [Source 02] Newzoo - 2020 Global Gaming Market Report GAMING IS BECOMING THE CENTRAL HUB FOR PEOPLE’S VIRTUAL LIVES, AND INCREASINGLY THEIR REAL LIVES 40% 35% 80% MUSIC, TV, VIDEO LIFESTYLE SPORTS & E-SPORTS GAMERS HAVE PARTICIPATED IN NON-GAMING ACTIVITY 38% POWERED BY SHOROOQ PARTNERS GAMING IS THE NEW MULTIMEDIA DIGITAL EXPERIENCE GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 16 COMMON BETWEEN ALL TOP MOBILE GAMES IS THE OPPORTUNITY FOR PLAYERS TO CONNECT WITH THEIR FRIENDS AND THE WIDER COMMUNITY ABILITY TO COMPETE AGAINST ONE ANOTHER IN TEAMS MADE UP OF FRIENDS OR STRANGERS ABILITY TO PLAY MATCHES AND COMMUNICATE WITH FRIENDS THROUGH MESSAGING AND VOICE CHAT ABILITY TO GAIN POINTS BY INTERACTING WITH FRIENDS ABILITY TO COMPARE SCORES AND RECORDS WITH FRIENDS ABILITY TO TRADE POKÉMON, BATTLE WITH FRIENDS, AND SEND GIFTS ABILITY TO PLAY CO-OP WITH UP TO THREE OTHER PLAYERS HONOR OF KINGS $1.6B PUBG MOBILE $1.3B FATE/GRAND ORDER $1.1B CANDY CRUSH SAGA $1.5B POKEMON GO $1.4B MONSTER STRIKE $0.9B POWERED BY SHOROOQ PARTNERS GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 17 [Source 03] Activate analysis, Company filings, Daily Esports, Game i-Sensor Tower, Super Data ... AND IT IS ALSO HAPPENING ACROSS ALL TOP EARNING PC AND CONSOLE GAMES FIFA 19 CALL OF DUTY GRAND THEFT AUTO FIFA 20 CALL OF DUTY BLACK OPS III NBA 2K19 TOM CLANCY’S THE DIVISION 2 TOM CLANCY’S RAINBOW SIX SIEGE $786M $645M $595M $504M $487M $370M $370M $358M PLAYSTATION PC XBOX NINTENDO POWERED BY SHOROOQ PARTNERS TOP-EARNING PAID PC AND CONSOLE VIDEO GAME TITLES, GLOBAL, 2019, $M MULTIPLAYER GAMEPLAY IS A COMMONALITY GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 18 [Source 04] Activate analysis, Company filings, Daily Esports, Game i-Sensor Tower, Super Data PUBLIC GAMING COMPANIES INVESTED 4X MORE CAPITAL IN ACQUISITIONS IN COMPARISON TO 2021, SEIZING THE CURRENT MARKET CONDITIONS POWERED BY SHOROOQ PARTNERS VC CORPORATE PE, OTHERS TOTAL 4.8B 45% 34% 21% TOTAL VALUE OF 2.2 BILLION DOLLARS IN 23 DEALS GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 19 [Source 05] InvestGame - 2022 H2 Report EARLY-STAGE INVESTORS GROWING TO BE MORE SELECTIVE AND ADOPTING A “SAFE ACCESS’’ APPROACH TO INVESTING IN GAMING POWERED BY SHOROOQ PARTNERS 96 Q1’20 DEAL VALUE ($M) Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 76 183 89 260 307 169 413 379 65 377 NUMBER OF DEALS • 2022 Q3 IS NOTICEABLY THE WEAKEST PERIOD IN EARLY-STAGE VC GAMING PLACEMENTS TIMELINE, WITH ONLY 22 DEALS OF $65M DISCLOSED VALUE • INVESTORS ARE BECOMING MORE SELECTIVE, THE SIZE OF THE DEALS MADE IN 2022 ARE COMPARATIVELY HIGHER THAN IN 2021. THERE IS MORE DRY POWDER RESERVED FOR FOLLOW ONS TO SUPPORT COMPANIES WITHSTAND CURRENT MARKET CONDITIONS GAMETECH REPORT MAIN HIGHLIGHTS | A GLOBAL OVERVIEW | THE MENAPT LANDSCAPE | LEARNINGS FROM SHFT | ABOUT SHFT PAGE 20