In a move signaling the promising rise of Middle Eastern innovation in virtual reality (VR) gaming, UAE-based but MENA-focused Khosouf Studio has secured a $600,000 seed investment from Saudi Arabia’s Merak Capital. This injection of capital aims to accelerate Khosouf’s ambitious plans for scaling VR gaming and simulations, spotlighting the expanding technology landscape of the region and serving as a milestone in the nascent but rapidly growing Middle Eastern interactive entertainment sector.
Founded in 2020 by Ahmad Al-Natsheh, Khosouf Studio has quickly built a reputation for premium, narrative-driven games and immersive VR experiences. With more than a decade of industry experience behind the founder, the Abu Dhabi-based studio combines local cultural storytelling with cutting-edge technologies, developing games that are designed not only for leisure but also educational and simulation purposes across multiple platforms including PC, consoles like PlayStation 5 and Xbox, as well as VR devices.
Strategic Investment and Regional Expansion
The $600,000 seed round was closed on January 15, 2026, led by Merak Capital’s Gaming Fund, a venture initiative established in 2024 with approximately $81 million in assets under management. Merak Capital, licensed by the Saudi Capital Market Authority, is a crucial player in nurturing game development ventures aligned with Saudi Arabia’s Vision 2030—a strategic framework aimed at diversifying the country’s economy and positioning it as a global hub for technology and entertainment.
For Khosouf, this funding round is more than a financial milestone. It facilitates operational scaling and marks the studio’s intentional shift towards establishing a significant presence in Saudi Arabia, reinforcing the cross-Gulf collaboration that is vital to the MENA region’s growing digital economy. “Merak Capital’s investment is an absolute game changer,” said Ahmad Al-Natsheh, CEO and founder of Khosouf Studio. “It will elevate our goals and push us to new heights while helping establish our long-term base in Saudi Arabia. Having such an established and capable partner allows us to scale with confidence while publishing proudly locally developed original titles across the entire world.”
Innovative Portfolio and Industry Footprint
Khosouf Studio’s portfolio is notable for its ambitious VR projects that fuse cultural depth with interactive gameplay. Its debut title, BOX to the BEAT VR, released internationally in 2024, has garnered recognition as the first Middle Eastern game on the PlayStation 5 VR2 platform. This rhythm boxing game exemplifies the studio’s narrative-driven approach, combining physical engagement with immersive storytelling.
Beyond commercial games, Khosouf has produced educational and cultural simulations, reinforcing the studio’s mission of leveraging VR as a tool for regional storytelling and skill development. Some key projects include:
- Ocean Explorer VR (2021), developed in partnership with Discovery Channel, allowing users to dive into oceanic environments interactively.
- Asteroid Assault VR (2023), a sci-fi action title reflecting futuristic themes popular in gaming.
- A Hunter’s Journey (رحلة المقناص) (2025), an upcoming title that celebrates UAE’s hunting culture through a simulation experience.
- Jeddah Central District VR (2024), a virtual model of one of Saudi Arabia’s architectural and cultural districts, reflecting the studio’s deep regional ties.
- HOPE VR (2021), a meditation-focused VR experience emphasizing mental wellness.
The studio’s diverse portfolio—which stretches over 20 completed projects—exemplifies its capacity to serve both niche educational markets and mainstream gaming audiences. Collaborations with entities such as the Dubai Shopping Festival and the Royal Showcases in Saudi Arabia further illustrate Khosouf’s ability to blend commercial creativity with culturally relevant content.
Positioning in the MENA Tech Ecosystem
Khosouf Studio’s growth trajectory is emblematic of a broader shift in the Middle East’s technology and creative sectors. The region, traditionally reliant on sectors like oil and construction, has invested heavily in the digital economy, with gaming and VR emerging as strategic focus areas.
The $600,000 seed investment from Merak Capital not only reflects investor confidence but also aligns with Saudi Arabia’s Vision 2030 goals to stimulate a vibrant knowledge economy supported by technology startups. Merak’s Gaming Fund plays a pivotal role by targeting early-stage ventures that create original intellectual property, fostering innovation and self-sufficiency in game development within the Gulf.
Khosouf’s relocation efforts towards Saudi Arabia underscore a growing trend of regional collaboration. Saudi Arabia’s supportive ecosystem and capital influx are attracting talent and companies from neighboring countries, including the UAE, driving a localized gaming economy that integrates the cultural and technological strengths of the entire MENA region.
Challenges and Forward Momentum
Despite its rapid rise, Khosouf Studio faces industry-wide challenges that include the high costs and technical sophistication required for VR game development as well as growing competition on a global scale. The studio’s determination to publish locally developed titles on demanding platforms such as PS5 VR2 reflects its willingness to undertake calculated risks and learn through trial and error.
Market education also remains a key hurdle, as VR and immersive technologies are still new to many consumers in the MENA region. However, Khosouf’s innovative use of narratives that resonate culturally aims to foster broader acceptance and engagement.
Looking ahead, Khosouf is building on upcoming original IPs like Glitch Core—a co-op first-person shooter roguelite—and continuing to diversify its VR offerings. The studio’s capacity to attract investments and deliver culturally relevant, technologically advanced games places it at the forefront of the regional creative economy.
Significance for Regional Digital Transformation
The success and expansion of Khosouf Studio epitomize the transformational momentum sweeping across the MENA technology landscape. Supported by visionary investors like Merak Capital and aligned with strategic governmental initiatives, studios such as Khosouf are cultivating a new era of digital entrepreneurship and innovation centered on original content creation.
This funding round and strategic positioning are likely to encourage additional investments in gaming startups, fostering an ecosystem of vibrant creativity and technological advancement. As the region further harnesses its youthful population’s digital engagement and creativity, companies like Khosouf Studio will continue to drive the evolution of the Middle East’s presence on the global gaming and immersive content stage.
For more insights on Khosouf Studio and its projects, visit Khosouf’s official website.
