Saudi Arabia has become one of the Middle East’s most important online video game markets, combining a large, young and highly connected player base with strong consumer spending. Recent digital-market data records 99% internet penetration and approximately 34.4 million people online at the end of 2025.
The regional opportunity is also expanding. Recent video game industry forecasts estimate that the combined markets of Saudi Arabia, the United Arab Emirates and Egypt will grow from US$2 billion in 2024 to approximately US$2.8 billion by 2029. These markets included 72 million players at the end of 2024, predominantly under the age of 35, with Saudi Arabia combining substantial player numbers and comparatively high revenue per user. For foreign developers and publishers of online video games, Saudi Arabia is therefore both an attractive market and a potential base from which to test Arabic localisation and prepare for wider expansion across the Middle East and North Africa.
This article focuses on mobile, PC, console, browser-based and cloud games made available digitally to Saudi users, including downloadable and live-service games involving user accounts, multiplayer functions, communications, subscriptions or in-game purchases.
An offshore launch can create a pathway to Saudi investment
A foreign developer or publisher of online video games can, in principle, launch in Saudi Arabia through third-party digital stores serving mobile, PC and console users without first establishing a Saudi subsidiary or branch.
For many smaller and mid-sized companies, this may be the most practical first step. A compliant offshore launch, supported by a proportionate level of Arabic localisation that can be expanded as Saudi demand develops, allows the company to test the market and demonstrate traction through player numbers, revenue, retention and the commercial effect of localisation before committing to substantive Saudi operations.
The strategic opportunity extends beyond revenue generation. Saudi investment in the sector initially attracted attention through major global acquisitions, including Savvy Games Group’s US$4.9 billion acquisition of Scopely, which closed in July 2023. Savvy Games Group is wholly owned by the Public Investment Fund (“PIF”). More recent Savvy initiatives indicate a complementary focus on attracting foreign companies that can contribute to local talent development and build production capabilities. The PIF 2026–2030 Strategy reinforces this direction through its emphasis on competitive domestic ecosystems, international partners and private-sector participation.
Foreign companies are therefore increasingly assessed not only by their existing scale, but also by their willingness and ability to introduce technology, develop local skills and establish production capabilities in Saudi Arabia. A successful offshore launch strengthens the company’s attractiveness to Saudi investors by demonstrating market traction and a credible basis for deploying Saudi capital into deeper operational localisation, including local personnel, training, development teams and potentially a Saudi studio.
Regulatory framework for an offshore launch
A foreign video game company is not required to appoint a Saudi distributor merely because users in Saudi Arabia can download or access its online game through a third-party digital store. Remaining offshore, however, does not remove the game or the resulting user relationship from Saudi regulation. The applicable requirements depend less on where the company is incorporated than on how the service is structured and which entity performs each Saudi-facing function.
The legal team should identify the entity responsible for publishing the title, operating the online platform, contracting with users, collecting payments, acting as merchant of record, controlling or processing player data and conducting marketing and customer support. Each role engages a different part of the Saudi regulatory framework, including game classification, digital-content-platform regulation, data protection, consumer contracting, payments and VAT.
A third-party digital store, such as Apple’s App Store, Google Play, Steam, the PlayStation Store or the Xbox Store, may perform some of these functions without assuming all of them. Conversely, a publisher using its own launcher, user accounts, servers, communications and payment environment is likely to retain more of the relevant functions and corresponding compliance obligations.
Before launch, the legal team should therefore map what Saudi users receive, which entity provides each element of the service, who contracts with them, who collects payment, where the relevant systems operate and who controls content, player data and monetisation. That functional map should form the basis of the classification, platform, data-protection, consumer, payment and tax analysis.
The game and the platform require separate analysis
The General Authority for Media Regulation (“GAMR”) administers the Saudi age-rating system for video games. Its classification service permits an application by the developer, publisher or local agent and requires sufficient information about the game’s content to determine the appropriate Saudi rating. Distribution through a third-party digital store does not necessarily remove the need for Saudi classification. For live-service games, material new content should also be reviewed against the scope of the original classification.
The platform through which the game is provided requires separate analysis. The Communications, Space and Technology Commission (“CST”) Regulations for Providing Digital Content Platform Services (“CST Regulations”) apply to companies providing in-scope digital-content-platform services, whether established in Saudi Arabia or abroad, and expressly cover online game and e-sports participation platforms.
A publisher distributing a title through a third-party digital store may have a different regulatory profile from one operating its own launcher, user accounts, servers, communications, community functions and payment environment. Under the CST Regulations, online game platforms are not subject to a licence, registration or notification requirement. They must nevertheless comply with the substantive requirements of the CST Regulations and with other applicable Saudi laws and regulations, including those governing the content of the games. By contrast, an “e-sports participation platform”, meaning a platform that enables users to participate in organised online e-sports tournaments, must notify CST once it has 100,000 or more users in Saudi Arabia.
Arabic localisation can be phased
GAMR’s published classification requirements do not require every video game made available online in Saudi Arabia to be fully translated into Arabic. Applications for game classification may be submitted in either Arabic or English.
A proportionate initial launch should therefore consider Arabic information concerning the game, its age rating, pricing, subscriptions, in-game purchases, refunds, complaints, online safety, personal data and customer support. The company can later introduce Arabic menus, tutorials, subtitles, dialogue, community moderation, voice acting and culturally adapted content as Saudi demand develops.
The company should also review the game’s content for compliance with applicable Saudi media and content requirements, particularly where it may be inconsistent with Saudi cultural, religious or social values. Greater care is required where the game is directed at, or reasonably likely to be used by, children. Where the game or associated service includes chat functionality or user-generated content, the company should implement appropriate moderation and reporting controls consistent with applicable Saudi content, platform and child-protection requirements.
Saudi law governs the user relationship offshore
The Saudi Personal Data Protection Law (“PDPL”) applies to the processing of personal data relating to individuals residing in Saudi Arabia even where the controller operates offshore. The Saudi Data and Artificial Intelligence Authority (“SDAIA”) confirms this extraterritorial reach in its official guidance for controllers and processors.
Before launch, the company should identify the entity controlling player data and ensure that the processing purposes, legal bases, retention periods, security arrangements and procedures for exercising data subject rights are properly documented. Greater care is required where the game is directed at, or likely to be played by, children.
Transfers of personal data outside Saudi Arabia must also be mapped and supported through an available transfer mechanism. Depending on the circumstances, this may include SDAIA’s published Standard Contractual Clauses. Remaining offshore does not remove the need to comply with Saudi data-protection requirements.
The Saudi user relationship may also fall within the Kingdom’s e-commerce framework. The company should therefore review its user terms, subscription conditions, refund policy and complaint procedures rather than assume that its standard global terms are sufficient.
The analysis should reflect how the game is monetised. Subscriptions, virtual currencies, randomised rewards and user marketplaces may raise different issues concerning pricing, recurring charges, refunds and transactions involving minors. Not every virtual currency is a regulated payment product, but transferable value, stored-value functionality or payment services for third parties may require separate consideration under the Saudi Central Bank’s payments framework.
Advertising and promotions should also be consistent with the game’s Saudi classification and intended audience. This includes storefront descriptions, trailers, influencer campaigns and promotional competitions.
VAT follows the supply chain
Remaining offshore does not eliminate Saudi VAT. The position depends on the distribution arrangements and on which party is treated as supplying the electronically delivered service to the Saudi user.
Where a third-party digital store is treated as an electronic marketplace performing the relevant supply functions, it may be responsible for accounting for VAT on the supply to the customer. Where the publisher supplies and collects payment directly, it may need to assess non-resident registration and compliance under the framework administered by the Zakat, Tax and Customs Authority (“ZATCA”).
The current VAT rules for electronic marketplaces consider factors including who sets the supply terms and price, invoices or charges customers, collects payment and handles complaints or compensation. The distribution agreement, user terms, invoices and receipts should therefore present a consistent account of which party supplies the service to the Saudi customer.
From online video games to digital skills and technology adoption
The importance of online video games to Saudi Arabia is not confined to their value as consumer entertainment. The sector also supports the Kingdom’s wider transition towards a digitally skilled and technology-enabled economy. Developing and operating online games requires capabilities in programming, artificial intelligence, digital design, simulations, content production, data analysis and intellectual-property creation.
Education and training can therefore form an important part of a foreign company’s Saudi proposition. In February 2026, the Ministry of Education announced three memoranda of understanding with Savvy Games Group addressing educational games, integration of game development into curricula, teacher development, artificial intelligence, simulations and a games and innovation laboratory.
A foreign online video game publisher does not need to convert its title into an educational product. It may instead contribute through internships, technical training, mentorship, developer or creator programmes, online-safety initiatives or co-development opportunities for Saudi talent. These capabilities can strengthen the company’s investment proposition by demonstrating how its Saudi presence would contribute not only to consumption, but also to skills, technology adoption and domestic production capacity.
Programmes involving children require additional safeguards concerning parental involvement, age-appropriate content, personal data, participant safety and ownership of content created through the programme. Those matters should be incorporated into the programme design from the outset.
From offshore launch to Saudi investment and localisation
A compliant offshore launch allows the company to demonstrate Saudi demand through player growth, retention, revenue and the commercial effect of Arabic localisation. This evidence can support discussions with Saudi investors, distributors and publishers by showing that the company has established a tested basis for Saudi market entry.
To convert that traction into an investment or partnership opportunity, the company should have a clear record of its ownership of the game and any Arabic or Saudi-specific content, together with an organised regulatory file covering classification, CST, data protection, consumer and tax matters. Diligence should operate in both directions. A foreign company appointing a Saudi distributor or publisher should assess its licences, financial standing, market coverage, regulatory capability and Arabic support before granting exclusivity or control over regulatory submissions, player data or localised content.
The company should also prepare a realistic Saudi localisation and capability-building plan. This should identify the functions that could be established in the Kingdom, the required capital and personnel, the role of any local studio and the support expected from the investor or government. It should translate the company’s proposed training, education and talent-development contributions into defined programmes, budgets and implementation milestones.
Saudi investment can support the transition from offshore distribution to Saudi operations. Establishing a Saudi company becomes more relevant when the foreign company intends to employ local personnel, establish a studio, contract directly with Saudi commercial or government counterparties, act as merchant of record or undertake substantive development and production activities in the Kingdom. The investment documents should define and fund the localisation commitments, establish realistic milestones and address the ownership and permitted global use of intellectual property created through local development.
How Bird & Bird can help
Bird & Bird combines one of the world’s leading international Games practices with a Tier 1 Saudi TMT team and an established regional presence across Riyadh, Abu Dhabi and Dubai. Our international Games practice is ranked Tier 1 by The Legal 500 UK, while our Riyadh TMT practice is ranked Tier 1 by The Legal 500 Saudi Arabia 2026. Three of our Riyadh partners, Simon Shooter, Nick O’Connell and Bandar Alhamidani, are recognised as Leading Partners for Saudi TMT.
Our experience advising PIF-backed companies on intellectual-property matters in the video game sector gives us direct insight into the importance of IP ownership, protection, localisation and commercialisation within Saudi Arabia’s developing ecosystem. We understand what foreign developers and publishers need to launch, localise and protect their products, as well as the legal and commercial issues that arise when seeking Saudi investment, strategic partnerships and long-term participation in the Kingdom.
This combination of international sector knowledge and on-the-ground Saudi capability enables us to support the complete progression from offshore launch to Saudi investment and local operations. Our capabilities include regulatory advisory work, intellectual-property protection, data and consumer compliance, distribution, publishing and other commercial arrangements, joint ventures, investment structuring, capability-building commitments, corporate establishment and the development of Saudi teams and studios.
Our team
For further information on launching online video games in Saudi Arabia from offshore, please contact Simon Shooter, Nick O’Connell, Saarah Badr and Peter Koh.
Disclaimer
This publication provides a general overview of the issues affecting foreign companies launching or offering online video games in Saudi Arabia from offshore. It does not constitute legal advice. Specific advice should be obtained for each title, platform, distribution model, localisation programme, data-processing activity, consumer arrangement, tax position, investment or Saudi operating structure.
For further information, please contact:
Simon Shooter, Partner, Bird & Bird
simon.shooter@twobirds.com
