The Southeast Asian mobile games market is a huge sector with double digit annual growth, and as the market in China becomes more competitive, Chinese game developers are increasingly looking to expand overseas to their increase their income, but why South East Asia and other developing countries may be more attractive?
- High percentage of mobile users – US and other developed countries have one of the biggest markets in the world for gaming, however compared to other rapidly developing countries, mobile gaming revenue accounts for a relatively smaller proportion, where many users bypassed the console stage and directly skipped to mobile games.
- Similarities in culture – Majority of the games by Chinese developers were initially designed for the Asian market, with slight modifications made to adjust to the other markets needs. Due to the proximity and exchange of cultures over generations, Asian cultures in general are relatively more similar compared to those of Western cultures, of which the gaming habits are also reflected in the games.
- Fewer mature game developers – US and other developed European countries already have numerous mature game developer. These companies have a better understanding of the local market needs, and better resources to increase the success rate of their game, thus making it harder for Chinese developers to compete in these developed markets.
- First mover advantage – Without limited mature game developers in these markets, Chinese developers can try to establish a foothold in this market by opening up channels and creating a brand name among the local players. This is also a great learning curve to better understand the local gaming habits before revenue takes off, so that they can better seize the market opportunities when the gaming market grows.
The Problems & Potential Solutions
Problem: Lack of mobile infrastructure – mobile devices tend to be lower end or less expensive, many of these are sufficient to support basic social media, chatting and utility apps such as maps etc. However gaming requires a much strong CPU, especially for games that require real-time interactions. Game file sizes are also getting bigger, with some of them upwards of 1Gb, which would take up a significant portion of the available space on lower end phones. The same also applies to other aspects such as internet etc.
- Potential Solution – Launch a lower quality/lower resolution of the game or allow players to turn off certain non-essential animation features. Quality is just one aspect to gaming, minecraft is a pixilated game, yet it has millions of players. Google announced the release of Android Go, which is a lightweight version of Android Oreo for lower budget phones.
Payment infrastructure – many of the gamers in the developing Southeast Asian countries don’t have credit cards, which makes top-up through digital channels a hassle. As a result, various payment channels that offer physical top-up scratch cards sold through convenience stores have popped up across the countries, and sometimes can account for over 40% of a game’s revenues. As a result, for any games looking to enter this market should take into consideration cooperation with these channels, at least for now.
- Potential Solution – Games typically circumvent the Google & iOS ban on third party top-up channels by listing their game files on other platforms or even including a download link on their social media pages, where players can download a separate game file to access a variety of third party payment channels that do not require credit cards or issue their own physical top-up cards. I believe though that the future is in messaging apps, WeChat has successfully penetrated into all aspects of life in China, from taking a taxi, buying clothes, splitting the dinner bill etc. pushing it to the forefront of a cashless society. LINE is also trying to diversify into this sector via the Bangkok Mass Transit System in Thailand. As your city’s key infrastructures try to leverage these messaging apps as a step to becoming a cashless society, the outdated need for credit cards as an online payment tool and offline physical top-up cards is likely to become an eventuality.
Diverse language and cultures – As a key shipping route, Southeast Asia is a melting pot of cultures, with many people speaking different languages and believing in different faiths. English games are sufficient for some countries such as Singapore or Philippines, but localization is key to garnering greater success in Thailand or Indonesia, where English proficiency is still relatively low. In terms of cultures, games have to ensure to cater to all target audiences, such as the New Years, Chinese New Years, Islamic New Years etc. In some cases there may even be minor conflicts, such as Western cultures celebrating Halloween, while this is technically condemned by the Muslim authority.
- Potential Solution – Given sufficient resources, localization of the game is preferred and people with in-depth knowledge of local cultures should be a part of the operations team, however costs must also be taken into consideration for each case. In terms of clashes in cultures, this should be tailored not just based on the region’s composition, but by your gamer’s composition. For example, in the above scenario, where Halloween is celebrated by one culture but not encouraged by another, unless your population is 100% Muslim (even then some of them still celebrate Halloween, especially the younger generations), key festivals should not be ignored, but the size of event can be tailored according to your gamer composition.
Sources: Businessreviewasia, TechPapa, Nikkei, BBC and various other google searches
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