The gaming market in Asia is changing a lot and becoming more competitive. Investors, developers, and analysts from different countries are interested in the gaming industry in Southeast Asia. In 2022, the mobile gaming industry in Asia made more than USD70 billion in money from countries like the Philippines, Indonesia, Malaysia, Thailand, Vietnam, and Singapore. People wonder if the gaming market in Asia will continue to be successful in the future.
Mobile gaming market in Southeast Asia (SEA)
The mobile games market in Southeast Asia is getting bigger and it’s a good opportunity for investors and game developers. In the next few years, there will be 250 million people in Southeast Asia who play mobile games. Indonesia, Malaysia, Thailand, Vietnam, Singapore, and the Philippines are the most popular countries for mobile games in Southeast Asia. Mobile games are growing faster than computer games because people can play them for free. Soon, cloud-based mobile gaming will make this market even bigger.
Gaming Market Size and Growth
The overall gaming market is booming in the Asia Pacific region and it will remain the world’s largest gaming market by revenue, with over 26 per cent growth in 2022 from 2021 to reach USD70 billion.
The Asia Pacific market is expected to reach revenues of USD87 billion by 2025 with India, China and South Korea offering the greatest growth opportunities due to internet and smartphone penetration coupled with large, increasingly tech-savvy populations.
Growth drivers that will shape the gaming future
Southeast Asia is one of the most lucrative markets for investors, publishers, developers and gamers because of the steady revenue growth every year.
The Southeast Asian region is projected to grow gaming revenues to USD4 billion by 2022. This is dwarfed by domestic market revenue in China, which is expected to grow from USD27 billion to USD35 billion. Nevertheless, Southeast Asia offers a large and steadily growing market space with arguably fewer barriers to entry for international game developers and resellers as compared to China.
What technological factors are driving changes in the gaming industry?
Several technological factors are driving changes in the gaming industry. Some pull factors driving changes in the gaming industry include:
Adoption of AR and VR
Augmented Reality (AR) is able to enhance the gaming experience by combining the virtual and physical worlds, while Virtual Reality (VR) embeds the gamer in an artificially created world.
With cutting-edge technological advancements like Samsung Gear and Google Daydream, by 2025 Virtual Reality’s (VR) adoption is expected to deliver about USD45 billion in profits.
Cloud Games
Cloud-based games, referred as Gaming-as-a-Service or GaaS, is a new way of playing games using the power of servers on smartphones with reliable internet speed. Players play the live games via a cloud server accessed through their mobile devices without installing or downloading the game.
LiquidSky, Plagiga, GeForce Now and LoudPlay are the few top cloud game applications.
Adoption of mobile eSports
Electronic Sports or eSports is growing rapidly. ESports are multiplayer electronic games played competitively by professional or semi-professional players in a public place, with live streaming to fans usually accompanied by sports commentary , modelled along the lines of other sports like football, baseball and basketball.
The global eSports market size is expected to grow to USD589 million by 2020 with the Asia-Pacific region and China as the major contributors.
Cross platform PC and Mobile games
Tablet and smartphone games together contribute 42 per cent of total global gaming revenue, which is higher than PC games revenue.
Think that women are not gamers? Think again
Approximately 48 per cent of gamers in the Philippines, 47 per cent in Thailand, 44 per cent in Indonesia and 42 per cent in Malaysia were women in 2017.
Jobs in AR, VR and eSports
With technological advancement in VR and AR, new job opportunities are being created. Since 2015, the AR and VR industries have seen a 93 per cent increase in job postings. Also, job postings related to eSports have increased 18 per cent in 2022 from 2021 and 57 per cent since 2018.
Booming gaming markets in Asia
The Asia-Pacific region is now the fastest growing gaming market in the world. China, Japan and Korea are the major players, but the Southeast Asian games market remains attractive to developers and publishers.
Key countries of interest include:
China
Over half of China’s 600 million gamers play online PC games . With a rising number of female gamers, the mobile audience is expected to reach a total of 720 million mobile gamers by 2022.
Currently 36 per cent of the world’s gaming market is made up of mobile phone games, with 183 million mobile gamers in China alone.
Japan
Japan is the most mature market for mobile games in the gaming industry . Gaming revenue has increased from to 17.5 billion Japan Yan in 2022. Japan has also achieved unique success in exporting its games.
Gaming brands such as Sony, Sega and Nintendo are some of the most prominent gaming brands in Japan – and the world.
South Korea
South Korea’s online gaming market grew 25 per cent in 2022. With an increase in development of games to compete globally, the country now has a 15 per cent share of the global gaming sector.
Taiwan
Taiwan’s mobile games account for a substantial share of total global revenue and is expected to grow by 60 per cent.
Taiwan is the 15th largest mobile and PC games market globally. More than half of the population is expected to play online games by 2021.
Local investment in technology, good internet infrastructure and fan enthusiasm is responsible for this growth.
Indonesia
Indonesia’s gaming market is expected to exceed USD100 million by 2019. Despite being the largest market in 2017, the country has the second lowest Average Revenue Per Paying User (ARPPU) which is the average revenue received per unique paying user. This is due to the availability of low-priced options and lower income per capita. However with the fourth largest population in the world, Indonesia will likely continue to be the largest gaming market in Southeast Asia.
India
The Indian digital gaming sector is growing rapidly due to internet and smartphone penetration, a healthy economic outlook and favorable demographics.
Between 2014 and 2016, gaming downloads doubled with 35 percent of women and 40 percent of men play mobile games five days a week. The Indian gaming market will be worth 153 billion Indian Rupees by 2024 with over 700+ million gamers.
Challenges ahead
Some obstacles in the way of healthy market growth include:
Augmented Reality / Virtual Reality
‘Pokémon Go’ is the famous AR game which brought the much-loved Pokémon characters from the virtual to the real world. However, the game failed to deliver the revenues and profits that were expected. Even though VR and AR games can deliver a high-quality visual experience, some limitations exist . Developers need to overcome challenges related to AR and VR devices, consumer technology, daily life integration, mobile connectivity and the price of manufacturing, to name a few.
To deliver value to customers, enhance gaming experience across platforms and generate high-demand engagement, strong analytics and sound data-driven methods are required.
Optimize advertising
Casual gamers spend more time playing games, making it easier for advertisers to push advertisements. Gaming companies and developers should focus on providing more targeted modes of advertising based upon players buying behaviour.
Raising funds
Profitability may be elusive in the early stages of a game’s release, while the life of games is also becoming increasingly short, creating a high-risk, high-return industry where profits need to be made during a compressed period of time in the middle of a game’s life.
To win gaming revenue, having access to funding and investment are very important.
Profitability may be elusive in the early stages of a game’s release, while the life of games is also becoming increasingly short, creating a high-risk, high-return industry where profits need to be made during a compressed period of time in the middle of a game’s life.
To start a project and bring it to fruition, developers need access to generous and patient capital.
Future of the gaming industry in Asia
The gaming industry is growing at a very fast rate, driven by internet and smartphone penetration. New technologies like AR and VR have completely transformed the gaming experience worldwide . Southeast Asia’s gaming market has been growing at a steady 22 per cent a year from 2013 to 2017.
The eSports category is of particular interest, and may be the leading category within the gaming industry. Southeast Asia already has a successful business eco-system around European football viewership, one that generates a great deal of revenue. If it can apply the lessons from that experience to eSports, it may be able to create a globally significant market and spawn a few a globally significant companies in the process.
