On a bit of a lark, Klaus Kajetski wanted to live somewhere it was warm. He grew up in the cold and dark of Finland, and he wanted to move by the equator. That was the beginning of his journey to start Yalla Esports in Dubai in the United Arab Emirates.
Twelve years later, he is firmly planted in Dubai. At first, he was a DJ. But gaming was always his passion, and he was always excited about esports. He spent time in internet cafes and got to know a lot of people in the local gaming community. He was a semi-pro playing Counter-Strike.
He started Yalla Esports (the company spells it YaLLa) in 2016 and it has been growing ever since, pivoting when necessary. He had met talented players who could have been esports stars, but they didn’t think they could make a living at esports. Yalla Esports started as a way to build a platform where gamers could go pro. With each new popular game, the potential for esports as a market grew.
Dubai’s fortunes also took off, and now it’s a center of tourism and finance that draws people from around the world. It has its issues, of course, but Dubai is much better off than other places like Gaza, wrote Thomas L. Friedman, New York Times Columnist.
“Once I’d learned about the culture, the place, the opportunity — no place is perfect — but this is a great place to be,” Kajetski said in an interview with GamesBeat.
During that time, Kajetski saw attitudes toward gaming change, both among the masses and the government. In 2019, the company raised a small funding round. The company morphed to being an esports marketing agency and B2B consultancy. Yalla is also building its own media business and event, Compass, around the Counter-Strike community, on an Arabic-only platform.
Here’s an edited transcript of our interview.
GamesBeat: How did you choose to come here?
Klaus Kajetski: It wasn’t very sophisticated or planned. Finland is cold and dark. I wanted to live somewhere by the equator, because when I was young, in my head I thought that meant it had to be warm. We spanned the globe, ended up in the Indian Ocean, and then Dubai was the closest. That’s the real story.
When I moved here the plan was to just visit and check it out. Now it’s 12 years later. Once I’d learned about the culture, the place, the opportunity–no place is perfect, but this is a great place to be.
GamesBeat: Was it always gaming and esports that you planned to do here?
Kajetski: Back in the day I was in the music industry. I was a DJ. But gaming has always been a passion. That’s how esports brought me in. As a DJ I worked around nightlife, and then during the day, well, what can I do? I spent a lot of time in internet cafes. I started to talk to people, get connected to the gaming community. I met some amazing people, very talented people.
GamesBeat: How did all the gaming companies get started here? Was there something that drew them at first?
Kajetski: Yalla Esports was–not an accident, but let’s say opportunistic. We officially founded the company in 2016. For a couple of years before that it was unofficial, community-driven. I met some amazing people, gamers and talent from the region, and I asked them, “Why don’t you go pro? Why don’t you take this more seriously?” In 2015 and 2016, people didn’t yet think it was an opportunity. Try to tell your parents as a young Emirati in 2015 that you wanted to go pro in gaming, it wouldn’t fly.
Yalla Esports started as a way to build a platform and build a platform where gamers could go pro. Professional gaming was the beginning, but from there it grew to include streamers, influencers, other kinds of talent. It wasn’t only about pro players.
GamesBeat: What do you think is unique that you could bring?
Kajetski: Back in 2016 we were pretty much the only one in the region. There were no government initiatives, no support. If I compare it to the Nordics and Finland, back then if you were a talented esports athlete you could just tell your school, “Hey, I’m going to take a gap year because I’m pursuing this career. If it doesn’t pan out, I’ll come back.” Schools in the Nordics would completely understand what you were doing. Here, parents would say, “Stop wasting your time.” Obviously there were also certain games where their takes on culture and religion were not allowed here. God of War is an example. That wasn’t available in the region, for understandable reasons.
But all these things have slowly changed. If I compare 2016 to now, things have changed tremendously for the better in gaming. Localization is a hot topic. There are publishers that do it very well, like Ubisoft. They take it very seriously. Some others don’t take it very seriously. But it obviously helps.
GamesBeat: What were the popular games in esports in those early days?
Kajetski: I’m an older gamer, so Counter-Strike 1.6 is how I started, back in the good old days. By Nordic standards you could say I was semi-pro. But remember, this is about 20 years ago. Pro meant somebody gave you a free mouse or paid your entry to an event. You still had to pay for your own travel and things like that. Sometimes I feel like I was born too early.
But here, Counter-Strike was already big, and still is. It’s a forever game. Obviously you had DOTA, League of Legends. Fortnite had a huge boom. In 2016 we started mainly around Blizzard titles. I’m a huge Blizzard fan. I’ve played World of Warcraft almost all my life. Overwatch was huge in 2015 and 2016. In 2017 and 2018 it started to get a bit worse. Hearthstone, those kinds of titles. Then you had the Fortnite wave. Now PUBG Mobile is massive. It’s the same games, more or less. Valorant is picking up here now.
GamesBeat: When would you say the attitudes around gaming became more serious here?
Kajetski: It wasn’t as if one day the government woke up and announced, “Now this is a legitimate business.” It was a combination of publishers starting to see, hey, this is a real market with a lot of players–the GCC especially, they have many devices. Most gamers have a console, a PC, and a mobile phone. Publishers started to set up remote offices at least. Companies like Riot don’t have production here, but they have offices to make sure the community is taken care of.
Then the government support started to come in. It’s an industry. It creates jobs. It creates GDP. They realized that there’s a young audience here, a young population, and if they double down on gaming, maybe in five to 10 years they can nurture the athletes in esports. And then of course companies like Yalla Esports, whether it’s teams or platforms, all the support ecosystem started to pop up. That started just before COVID, though, and then COVID shook everything up.
GamesBeat: Were you able to become part of any kind of accelerator, or otherwise get support from the government?
Kajetski: Yalla Esports has never been part of any official accelerator program. It’s more like we’ve been the ones doing the accelerating. We had quite the rough first few years. Sponsorship money in the Middle East – I was talking to channel marketing in the Middle East. They have global esports budgets separately, and they invest from there. It was very tricky. But around 2019 we raised a small round. It became a bit more serious. VCs were looking into it. Then the sponsorship started to come in. The government became more interested. They looked at Yalla Esports and saw that we had been around for a while, and we started talking.
GamesBeat: What does Yalla Esports do today?
Kajetski: As I say, the company’s been around since 2016. We have done quite a lot. But I’ll take you through the shortlist version. We started as a team. We basically wanted to be Ninjas in Pyjamas for the Middle East, something like that, the Fnatic of the region. We realized that was very tricky. The few sponsors we had wanted us to do even more content, more than just doing the team. We started to realize we could operate as a creative agency, a marketing agency, to help these brands enter gaming, doing other activations and initiatives around Yalla Esports as a team. We also became a kind of B2B consultancy when people wanted to enter the gaming space in the middle east.
What we’re focusing on now is building our own IP. We realized that building this white label is good and all, but then you’re tied to other people’s brand guidelines. They steer the ship. Now we’re building our own event and the ideas around it, called Compass. It’s a big Counter-Strike tournament, with plans for a long-term league, a circuit you might say. We went from a team to a creative agency to a tournament operator. Obviously you can understand the whole spectrum. It helps to have a holistic view.
GamesBeat: Similar to something like ESL?
Kajetski: ESL is purely a tournament organizer. That’s their goal and they’re very good at it. We’re different in that we take pride in the creative agency side of things, this local understanding. Yalla Esports is an Arabic-only company. We don’t do tournaments in Finland. We focus only on the GCC. We do tournaments that are so big and impactful that they have global reach and top teams want to compete here, but that’s our niche. We focus on the middle east market.
GamesBeat: How many tournaments have you run now?
Kajetski: We’ve done a lot of tournaments as a white label, all the way to running the publishers’ own local circuits, or just running tournaments for brands. We have our Ramadan tournament, our own community cups. That’s always been happening. But we’ve never run anything at this scale. We have $450,000 in the prize pool for this upcoming event. We’ve grown the team and hired people that have done these kinds of events to combine the creative and community and regional understanding with this ESL-esque tournament organizing. That’s the secret sauce.
GamesBeat: Are there regional sponsors, or is it more built around global sponsors?
Kajetski: We do both. For example, we have IMG. We’re selling them our global media rights, and we have global broadcast sponsors who are focusing on the global reach. For this first event we’re expecting 5 million views on Twitch as a global audience. But then we’ll also have a LAN event in the UAE, and that will be more for the local sponsors. Floor space, like any physical event, an Arena Finals type of thing. It’s a combination. Then obviously there are some brands like airlines or these multinationals that are present in both the middle east and globally. They’re perfect products to take hold of 360. But then you can also just do local if you’re a local brand and you don’t really care if a person from Europe is watching the stream.
We try to bridge the gap and invite the community to look at what’s happening in the middle east. The middle east gaming world is cool. Everybody’s interested in what’s going on here. We’re trying to build a platform where you can enter the region in an efficient way.
GamesBeat: Do you think Counter-Strike 2 is going to be popular?
Kajetski: It was perfect timing. Counter-Strike, a new title after a decade, and also Valve themselves saying, “We don’t really like this model.” The ESL, closed circuit, franchise model. They want to open up the ecosystem. For us it’s a perfect entry point to build Compass around Counter-Strike 2 for now. That said, we’re not looking at Compass as purely a Counter-Strike event. There will be more events. There might be events in other titles. We’ll take one step at a time.
GamesBeat: How many people are in your company now?
Kajetski: In this office we have about seven people, plus our freelancers who come here and use it. We have freelancers locally and regionally, for instance in Egypt. We have a lot of freelancers across the Arab region. If you add up all our talent and influencers and everything, the organization has perhaps more than 50 people.
We’re not actively running teams. Now that we’ve made the decision to work on the tournament side of things, you can’t be both a referee and a competitor. Back in 2016 and 2017 we had to do that, because there were no TOs in the region. We had this amazing team, but we also needed a platform to let them showcase their talent. If nobody else is going to run the tournaments, we had to. But we were open about that, and the tournaments were on a very small scale anyway. Everybody was just happy that somebody was doing something. But now that we do tournaments on a global scale, we have to pick a side.
Yalla Esports has always been, for me–we want to pave the way for gaming to thrive in the Middle East. Right now I feel that doing this tournament series around IP from the region–it’s kind of an export product, is how I like to see it. Currently it’s more about how we try to import everything to the middle east. It’s a good strategy, but it always feels a bit out of place. Now we want to build something of the same size, but homegrown. We want to make it so impactful that it wants to be exported.
GamesBeat: How much has the company raised so far?
Kajetski: We’ve only done the one round I mentioned, and that was back in 2018. It was under half a million. Nothing major. We have a great support network, including government support. The team size has always been quite small. I’m an entrepreneur for life, ever since I was 18 years old, and I’m all about bootstrapping. It has to make financial sense. In the middle east they always celebrate how much money a company raises, but then the question is, did they use that money in a profitable way, a smart way? It’s all, “$10 million, $100 million raised!” What about the guys who make $100,000 profit a year? That’s worth celebrating. I’m not saying this is right or wrong, but it’s my personal approach to running a business.
GamesBeat: Did you consider going into Web3 and decide against it?
Kajetski: I’m a complete Web3 degen on a personal level. When play-to-earn and Web3 gaming, owning all your skins came up, I said, “Finally!” I’ve been in crypto for a long time. But Web3 and gaming, it came across in the wrong way. It attracted the wrong kind of cowboys. But I’m a big believer. We want to find the right elements of Web3 for us that give the community and the players and the projects value. I’m all about underpromise and overdeliver.
Web3 will come along. All the big publishers now are at least dipping their toes in. But there’s no need to force it. Just like how Yalla Esports was looking into gaming and esports in the middle east in 2016, before it was cool, the same goes now. I want to be ahead of the curve in tech. I know it is web3 in some shape or form, but no need to force it. Just be there and see what’s happening.
GamesBeat: I do think that if you had taken $10 million to do Web3 esports, it probably would have been a bad choice.
Kajetski: It’s a good point. There were offers and discussions, especially in the esports gold rush. There was a lot of money going around. People wanted to invest in Yalla Esports. But we were just trying to build a sustainable business. It wasn’t about trying to just burn money. Now it’s different, because that was when we were in the team business. Now we want to run a big IP. When the time is right and we have this first event as a proof of concept, maybe we should raise a bit of money to scale up faster and do more events. In event businesses you can build a stage for $100,000 or for $1 million, depending on how many fireworks you want to set off. Maybe we want to make it very flashy. That might require some investment. But there has to be a logic to it. Don’t just take the money with no idea what to do. That’s not good for the investors or the company.
GamesBeat: When is your first big event? Do you know the schedule?
Kajetski: That will be in June 2024. Today, actually, is the finals of the first online qualifier season. That’s been going on for a couple of months now. We’ve been streaming the playoffs on Twitch, and we have half a million views already just yesterday and today. I’m looking forward to having this first season done. We can regroup over the Christmas break and then in January the next season starts. We’ll have the local qualifiers at some point, because of course we want to have an Arab team in the main event. There will be another Compass after that, but we’ll share those details when the time is right.
GamesBeat: Does Saudi Arabia seem like the biggest market opportunity as a country, or are there some others that you think are in the running?
Kajetski: The Middle East is booming overall when it comes to gaming. Saudi Arabia is obviously a larger country, a larger population, and so you have larger investments. The ESL acquisition and Vision 2030 and so on. That said, the UAE also has very big plans. I was just yesterday at an initial meetup around the Dubai gaming program. It’s a focus group of some very talented people, a mix of the government and private sector looking at how Dubai will do things. Then Abu Dhabi has a great track going on with different kinds of gaming initiatives. Even Qatar. It’s the whole GCC.
The way I see it, everyone wants a piece of the pie. When a new industry expands, whether it’s web3 or gaming and esports, the key to success is to make investments in a smart way. We’ve been quite fortunate with Yalla Esports. Since we’ve been here for so long, we’ve gotten into a bit of an advisory or consulting role with many of these projects. It’s helped grow the pie as a whole for the industry in the middle east.
We’ve had interesting discussions. The worst thing that could happen is that the government or the private funding sector comes in with a lot of money and makes the wrong decisions. Then they don’t see any return and they stop after a couple of years. Obviously I want to be there and try to–we don’t know, but I’m hoping that we’ve made the right decisions, and this becomes sustainable.
GamesBeat: Do you get the sense that the UAE is diversifying in the way that the Saudis are, or is it a different vision for the government?
Kajetski: It’s definitely a diversification plan. Dubai especially depends very much on tourism and sectors other than oil. It’s aligned with the overall goal of being this technology hub. The UAE is also very proactive when it comes to crypto and the AI narrative as well. It goes hand in hand with gaming. Maybe I’m biased because I am from the gaming space, but it seems like a very logical thing to look into for the future. Maybe you don’t want to go all in, but having it as part of a wider portfolio.
GamesBeat: Silicon Valley has very important companies, very big companies, but not as much of the frontier enthusiasm. It’s not the fastest-growing region of the world anymore when it comes to new players.
Kajetski: I’ve never been to the Valley, but obviously as an entrepreneur I read about what’s going on there. I do feel like there’s quite a small circle. The same main people create companies over and over again. They don’t even need to go to VCs. They just self-fund over and over again. On the other hand, I see a lot of similarities to the game development scene in Finland. For a small company like Finland, the amount of amazing mobile games that they’ve shipped, everything from Angry Birds onward–that’s a very small circle that just went on to found different teams. This guy from that studio and that other studio, they split off to make a new studio. It’s almost a zero-sum game of some really talented people. It’s a similar kind of thing. We don’t really have that here.
GamesBeat: The interesting thing was, when mobile gaming came along, the whole world could participate. Before it was just Japan, the U.S., and Europe. Now there’s an opportunity for all these new regions.
Kajetski: These days, you can have more computing power in a mobile device than a PC from three or four years ago. It’s insane. But still, I feel like the mobile industry is so focused on these lazy games, just cash grabs. We can literally make triple-A games on these devices now. Why aren’t we? It’s a weird industry to me.
GamesBeat: The one area where more funding is starting to come in over in the U.S. is the Roblox-Minecraft-Fortnite game studios. Kids who’ve been making Roblox games for 10 years, they’re now 23 and they can run a company of 30 people.
Kajetski: It’s amazing how smartly those games have created what are basically open-source map editor tools. They have this army of essentially free devs. If somebody creates something that really takes off, you can either hire the guy or just take the idea. But that’s beautiful. Let the creative people loose.
I had an interesting discussion the other day about the future of game development. Someone was saying that soon AI will be writing all the code. We’ll just need to create a small piece of forest and it will multiply that 100 times. But my thinking is, someone still needs to come up with a creative concept, an idea, storytelling. Maybe one day AI can do that, but I see that being a very long path. Game developers might become more like creative storytellers. They imagine the worlds that then the AI needs to build. I’m not a coder, but sometimes I have crazy ideas. Maybe in a couple of years I can start developing those.