Southeast Asia’s gaming market presents a new way to boost the region’s economic growth in the post-COVID-19 era.
By Umair Jamal
The global video game industry is booming despite the prevalent economic hardships caused by the COVID-19 pandemic.
The latest statistics indicate that COVID-19 lockdowns globally have boosted revenues of gaming companies, with incomes of Asian gaming giants Nintendo and Tencent increasing exponentially over the last few months.
Analysis from GamesIndustry.biz, which tracks sales and revenues of the gaming industry globally, shows that across all major regional markets, game sales rose by 63% in March.
With COVID-19 lockdown measures creating a captive audience, the global gaming industry is projected to be worth US$159 billion in 2020. According to a report from GlobalData, video games could become a $300 billion industry by 2025.
“The online population in Southeast Asia (SEA) is rapidly rising, mostly due to an increase in mobile device use and almost two-thirds of the gaming population in Greater Southeast Asia are engaged in esports,” writes Guilherme Fernandes for Newzoo.
One of the key takeaways from the current spike in gaming is that the industry can play a major role in the transformation of emerging economies in the post-COVID-19 world.
In this regard, Southeast Asia’s gaming market has the potential to generate massive revenues if the industry is further cultivated regionally.
Why is Southeast Asia’s games market growing rapidly?
In recent years, Southeast Asia’s gaming industry has attracted the attention of investors, developers and analysts because of the steady revenue growth every year. In 2019, Southeast Asia’s video games market brought in revenues topping US$4.3 billion, showing growth of 13.9% annually.
Currently, Southeast Asia is the fastest-growing regional market for online games globally. This growth is reportedly driven by mobile games, which represent 69.4% of Southeast Asia’s total gaming revenues.
Individual countries in Southeast Asia form substantial national markets. For instance, 43 million gamers in the Philippines spent US$572 million on games in 2019, and US$1.1 billion was spent on games in Indonesia in 2018.
By 2021, the number of mobile online gamers in Southeast Asia is expected to grow to 250 million. This is mainly because of the rapid increase in mobile connectivity and growing internet access across the region.
Another trend that has also been driving the games market in Southeast Asia is the growth of esports, involving major competitions and financial rewards. To an extent, Southeast Asia’s flourishing economies and growing young population explain why esports have gained traction. “As populations grow, more disposable income is spent on hobbies and leisure activities which includes video games,” notes a report published in The ASEAN POST.
According to Newzoo, a market intelligence firm covering global games and esports, “The sheer size of the Southeast Asian population, its rapid rate of urbanization and its young and tech-savvy demographic, are all factors favorable for growth.”
The rise in Southeast Asia’s share in the global esports market is also due to the region’s relative familiarity with English which “makes it easier to make games that can quickly enter into the global gaming market.”
Another interesting factor explaining the industry’s growth in the region is the active participation of women gamers. “Approximately 48% of gamers in the Philippines, 47% in Thailand, 44% in Indonesia and 42% in Malaysia were women in 2017,” noted a report from Spire Research and Consulting.
The region also offers a steadily growing market space with possibly fewer barriers to entry for game developers and promoters compared to other countries in the Asia-Pacific region. Many governments in ASEAN have liberalized the gaming industry by fostering environments that are beneficial to its growth. This support structure continues to attract new talent and make gaming education more accessible to young developers.
What does it mean for the region’s economy?
Considering the gaming market’s growth rate during COVID-19, governments across Southeast Asia should be eager to nurture the industry further to boost the region’s economy.
Southeast Asia is undergoing a rapid technological transformation. For instance, going forward, the introduction of new services like 5G in the region is likely to boost game streaming in Southeast Asia. This offers the region a unique opportunity to lift the industry to a scale where it becomes a major contributor to Southeast Asia’s economic development.
However, despite the marked growth in recent years, Southeast Asia’s gaming market still faces many challenges. Impressing global and local gamers holds the key to Southeast Asia’s possible success in the coming years.
The availability and accessibility of games needs to be regulated regionally. Moreover, for gaming companies, navigating different payment options and country regulations remains a major problem. This is an issue that needs to addressed as soon as possible.
As the region offers an exciting and ever-growing user base, the future of the gaming industry appears bright and could have a major impact on Southeast Asia’s economic development.