Yalla Group Reveals Secret to Successfully Competing in Saudi Arabia's Mobile Gaming Market

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Key takeaways:

• Saudi Arabia catches the eye of many mobile game makers, but the entry into the market is hampered by cultural differences.
• Yalla Group YALA achieved remarkable success in the region on the back of digging deep into the market. 

A report of mobile game advertisements was released at the end of last year by the Chinese service platform ‘App Growing’ revealed that over 117 million pieces of ads of this kind had been placed worldwide in 2021, with an increase of 64% YoY. In terms of regional shares, countries and regions such as the United States, Singapore, Canada, and Taiwan were the major targeted destinations.

Market share of mobile games launched in 2021, by countries and regions

Saudi Arabia as an up-and-coming market is in the limelight of various mobile game makers. In this market that reportedly has the highest per capita payment rate around the world, a wide array of game developers wrestled with each other, and a monthly average of 4,095 mobile games had been released by 1,758 game makers in 2021.

Number of mobile games launched in Saudi Arabia & mobile developers in 2021

Yalla Group's flagship product, Yalla Ludo, stayed strong throughout 2021 which the card game has long been at the front rank of the most downloaded application (app) chart in both Apple Store and Google Play Store, behind TikTok and PUBG MOBILE. While Yalla Baloot, another niche game product by the company that begins to soar its popularity in the region has also topped the poker game category in the Google Play Store several times last December.  

(Image source: Google Play Store on 12/1/2021)

Why Saudi Arabia?

Saudi Arabia is one of the richest economies in the Middle East and North Africa (MENA) region. The nation has a young population and enjoys broad internet coverage, but lacks leisure activities, making it one of the most vibrant places for pan-entertainment development. Data given by the World Bank has suggested that the average age of Saudi Arabia's nationals in 2020 is 31.8 years old, with an aging population of about 3.5%. And as of 2020, every individual in the country could easily get access to the internet as its internet penetration rate reached 90%.

Financially, it is projected that Saudi Arabia’s gross domestic product per capita would reach $23,762.42 in 2021, according to the International Monetary Fund. Their average disposable income is also very high because of decent social welfare and relatively high wages.

But in Saudi Arabia, the country’s laws take a tight rein in recreation. For example, bars are prohibited due to a stringent ban on alcoholic drinks; idolatry is not allowed by religious doctrine, thus there is a lack of movie stars or celebrities. Leisure activities are meager, and it was only in 2018 that the country's first cinema opened.

Scare leisure resources and the young demographic mix that come together have created strong demand for entertainment in this country, while policy and cultural factors have led to a supply shortage of such activities. Fortunately, changes are in sight as the internet becomes more available around the globe in recent years.

Tough land to land

Facebook FB, YouTube, Instagram, and other social media behemoths gained a big market share in the MENA regions as they were the early explorers in this market. However, as a growing number of apps foray into this battlefield, the Arab people have demonstrated their tastes among swarms of choices. Some enterprises did not get payoff even though they poured a colossal amount of money into their business in the regions.

Under the shadow of Islamic culture, many unwritten or obscure rules are hidden in their entertainment products, which puts a dent in the presence of any product in the Arab world. In the case of games, for instance, content that violates religious doctrine is never allowed — alcohol, pork, or barely clad women. At the same time, content that would be offensive to Arabs also needs to be avoided, such as crosses, tattoos, and light-yellow clothing. These seemingly insignificant details will usually determine a pick or a drop of a product by its Arab users.

So far, the internet sector in the MENA regions is in stiff competition, only companies with deep localization can survive and grow stronger in the market led by Saudi Arabia, and those who fail would be kicked out.

As the founder, chairman, and CEO of Yalla Group, Yang Tao, mentioned “the rule of survival” in an interview: “As adults, everyone should know the order in which the world works, and respect the existing order in order to survive and develop under the order.”

Yalla’s path to success 

In September 2020, Yalla Group was successfully listed on NYSE, becoming the first UAE technology company to list in the US market. On the day of the listing, several UAE dignitaries and royals attended its listing ceremony to show their support, and the Burj Khalifa, an iconic building in Dubai (where Yalla Group is headquartered), was lit up to congratulate Yalla on its smooth listing.

The company's founder, Yang Tao, has worked in Abu Dhabi for many years and is very familiar with the Middle East market. The core team of Yalla Group has been actively bringing in executives from the Arab world, as well as reaching out to other skeleton staff from world-renowned communications manufacturers. These top executives with intensive working experience in the region lay the foundation for the company’s localization.

Yalla Group’s core product line-up focuses on voice-centric networking, moving the majlis (meeting or talk) culture that prevails in the regions into online and building the feature into its first version of chatting rooms product Yalla. In the following days, the second product Yalla Ludo, an online board game combining Ludo and Domino frequently played among Arab people and families, was launched by the company.

Yang Tao mentioned that they would study the thumb size of users and design the screen area that is most convenient for them to control when they are playing the game. “The function of our product may look simple and not difficult to replicate, but it is based on the localization with our deep understanding of the local customs,” said Tao.

This in-depth understanding of the Arab world and the services it offers have not only earned the company a large number of loyal users but also marked it out in the MENA market. In its latest third-quarter financials, the company revealed that it has more than doubled its revenue and net profit year-over-year, with monthly active users of 25,946,000, an 81.9% increase over the same period. Its user paying rate surged to 30% for the quarter.

As a part of the Yalla Group’s future, the company will set up the Yalla Game section serving mid-core and hard-core game distribution. Game players in the MENA regions have a wide range of appetites, including FPS mobile games led by PUBG MOBILE, SLG mobile games Mafia City and Revenge of Sultans — popular among a vast user base. Yalla Group believes that its plans and layout in game development will significantly affect its growth.

The development of the hard-core game is technically more sophisticated and difficult, which is a challenge faced by the Yalla Group. On the flip side, it can bring more revenue to the company. Users in the MENA regions are habitual and affordable to paid offerings, and one such mid- and hard-core game could improve Yalla’s ARPPU (Average Revenue Per Paying User).

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.