Ø In 2022, the Middle East exhibited a considerable lead over Africa in terms of internet penetration, recording a rate of 79% compared to Africa’s 38%, according to Oxford Economics. Notably, nearly all of the GCC countries registered around 98% of internet users as of 2022. In Africa, Morocco held the highest market share with 89% of internet users, followed closely by South Africa, at 79%.
Ø Governments in the MENA region is actively promoting digital transformation and entrepreneurship through various initiatives. For example, the United Arab Emirates launched the "National Innovation Strategy" in 2014, aiming to position the country as a regional hub for innovation and entrepreneurship.
Ø The MENA region has a thriving start-up ecosystem. According to a report by MAGNiTT, a leading start-up data platform, the number of registered start-ups in the MENA region reached 1,250 in 2020, with total funding amounting to $1 billion.
Ø The MENA region has one of the highest rates of mobile phone usage globally. As of 2021, there are approximately 287 million mobile phone users in the region, which is equivalent to a penetration rate of around 75%.
Ø With over 65% of the MENA population under the age of 35, there is a large addressable target audience eager to engage with immersive digital experiences through the metaverse.
Ø In June 2022, the UAE government announced the development of new laws related to virtual assets, data protection, and intellectual property rights in the metaverse and established VARA - the Virtual Assets Regulatory Authority.
Ø The Saudi National Competitiveness Center (NCBC) released an initial framework on governance in the metaverse to enable innovation and investment including intellectual property, dispute resolution, and fraud prevention guidelines.
Ø The UAE's Metaverse market is driven by both the public and private sectors, with government entities actively crafting policies and frameworks alongside major investments in infrastructure and solutions development from leading Emirati corporations as well as global tech giants exploring partnerships within Dubai's thriving business ecosystems. Some examples to showcase the momentum from both sides include:
o Public Sector:
§ Dubai establishing the Dubai Virtual Asset Regulatory Authority to govern metaverse spaces.
o Private Sector:
§ Majid Al Futtaim (Mall Operator) announcing a "phygital" mall to combine in-person retail with technologies like VR and AI.
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According to a new report by Univdatos, The MENA Metaverse Market is expected to grow at a strong CAGR of 42.3% during the forecast period. The metaverse refers to a hypothesized iteration of the internet that blends aspects of online virtual worlds, augmented reality, social media, and cryptocurrencies to allow users to interact virtually in a shared virtual space. In the metaverse, the digital and physical worlds are brought together in a unified, real-time simulation spanning multiple platforms and devices. For example, a metaverse platform could allow a user to purchase a virtual plot of land as an NFT asset using a copyright like Ethereum. The user can then develop the land, hosting virtual events or renting out advertising space. copyright and NFTs enable new ownership models. Key characteristics of the metaverse include persistence, real-time interaction, interoperability, presence, platform convergence, blockchain integration, and hybrid reality blending digital and physical worlds. These features aim to evolve internet experiences into immersive shared virtual spaces. The emergence and adoption of blockchain technology, cryptocurrencies, and NFTs in the MENA region contributes to the demand for metaverse platforms and experiences. As virtual currencies and digital assets gain traction in MENA, more consumers are getting comfortable with the concepts underpinning copyright-enabled metaverse environments. The alignment of blockchain and metaverse innovation provides a boost to market growth potential.
Growth In Infrastructure Development
The accelerating infrastructure development across the MENA region has paved the path for the metaverse ecosystem to flourish. Governments have recognized that advanced connectivity is the foundation for unlocking emerging immersive technologies. For instance, the roll-out of 5G networks has already begun across MENA, with GCC countries leading the charge. The UAE aims to have the most populated areas covered by 5G by 2025. Similarly, billions are being invested into cloud infrastructure, data centers, AI computing power and IoT integration across Saudi Arabia, Qatar and beyond. With augmented and virtual reality platforms requiring high speeds, low latency and expansive edge computing capabilities to deliver next-generation user experiences, infrastructure enhancements have taken center stage. They enable anytime-anywhere access to metaverse environments. Equally importantly, progressive policies around digital assets ownership, data protection and digital ID systems are also driving consumer readiness and trust. As 5G, AI cloud services and cybersecurity continue rapid deployment over the next few years, they promise to unleash a creator economy around metaverse solutions. Extensive capital allocation towards R&D centers, districts devoted to simulation technologies and upskilling programs in fields like 3D animation and blockchain also provide fertile ground. With the right infrastructure ushering seamless transitions between physical and virtual worlds, the next generation internet across the region moves closer to reality.
Rising Trend of Digital-first Identities
In the metaverse, users can create and customize their own virtual representations, known as avatars, which serve as their digital identities. These avatars transcend physical boundaries, allowing individuals to explore and engage with virtual environments in ways that were previously unimaginable. The MENA region, with its tech-savvy population and strong cultural ties, is at the forefront of embracing this digital transformation. Digital-first identities in the MENA metaverse market are empowering individuals to express themselves freely and authentically, without the limitations imposed by traditional societal norms or physical appearances. Users can craft their avatars to reflect their true selves, embodying their desired traits, personalities, and even aspirations. This newfound freedom of self-expression is particularly significant in a region where cultural and societal expectations can sometimes constrain individual expression.
Moreover, the metaverse is fostering a sense of community and belonging among users in the MENA region. Virtual spaces are being created where individuals with shared interests and passions can connect and interact, forming digital communities that transcend geographical boundaries. These virtual spaces are becoming platforms for collaboration, creativity, and cultural exchange, further reinforcing the importance of digital-first identities. The rise of digital-first identities is also driving innovation in the MENA metaverse market. Businesses and entrepreneurs are recognizing the potential of this trend and are actively developing immersive experiences, virtual goods, and services tailored to the unique preferences and cultural nuances of the region's digital natives. This, in turn, is fueling economic growth and creating new opportunities in sectors such as gaming, fashion, entertainment, and education.
However, as with any emerging technology, the rise of digital-first identities in the MENA metaverse market also raises important questions and challenges. Issues related to privacy, security, and the responsible use of personal data must be addressed to ensure a safe and trustworthy metaverse experience. Additionally, the potential impact on traditional cultural values and norms should be carefully considered and navigated.
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Conclusion:
The MENA region is embracing the metaverse, with the rise of digital-first identities emerging as a notable trend. Users can create virtual avatars transcending physical boundaries, fostering self-expression and community building across shared interests. This trend is driving innovation, with businesses developing tailored immersive experiences for the region's digital natives. However, challenges around privacy, data security, and cultural impact need to be addressed to ensure a safe and trustworthy metaverse experience.
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