Indonesia's giant video game market gets extra pandemic boost

THE biggest regional market of Indonesia is also South-east Asia's top spender on video games, with a recent boost from the global pandemic-related shutdowns.

That's the takeaway from the latest "Asean Economics: Disruption Watch" report by Maybank Kim Eng analysts Lee Ju Ye and Chua Hak Bin, which cited the Indonesian Game Industry Association's estimate that game developers' revenue could have gone up by more than 50 per cent since early March.

Beyond pandemic-related lockdowns, the Maybank Kim Eng team also noted that "improved connectivity and rising ownership of smartphones, the most popular option for gaming in Asean, have accelerated the gaming boom".

Despite challenges such as poor digital infrastructure, game and app development has been identified as a growth segment for the Indonesian digital economy all the same.

Indonesian companies such as Touchten Games, Agate Studio and Levio.id have seen business pick up during the Covid-19 pandemic, even though the most popular mobile games remain foreign publications, the Maybank Kim Eng analysts noted.

Still, they added that "Singapore-based Sea Garena's Free Fire tops the list in the region and is enjoying high popularity globally", with active and paying users surging in the second quarter amid lockdowns.

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That's even as titles by Chinese firms such as Tencent, Moonton, Lilith, and Chuang Cool were also among the top 10 mobile games in various Asean markets.

Google, Temasek and Bain & Co have estimated that the gross merchandise value of the Asean online gaming market stood at US$4.2 billion in 2019. While data from We are Social and Hootsuite put the size of the Indonesian market at US$937 million that year, another report from Niko Partners said that the top 10 Android and Apple game downloads in 2019 yielded US$75 million in revenue together.

The vast majority of Asean Internet users tapped smartphones to play video games, We are Social and Hootsuite said in January. The share was 88 per cent in Thailand, 87 per cent in the Philippines and 85 per cent in Indonesia and Vietnam.

Maybank Kim Eng also noted that Singapore-based telco Singtel and its Thai associate Advanced Info Service (AIS) "are riding on the gaming wave" in a joint venture with South Korea's SK Telecom, while global hardware companies such as Nintendo and Ubisoft are also moving production facilities into the region.