Game developers and publishers looking to expand their market reach throughout Asia should evaluate the expected ROI increase associated with emerging markets. While analysts continue to cite mobile opportunities as a significant area of growth across the region, PricewaterhouseCoopers also claims that "console gaming companies will target emerging markets," citing India, Indonesia, the Philippines, and Thailand just behind Brazil as countries with significant revenue growth for console games between 2013 and 2018. Each of these 4 countries are expected to range from at least a 9% anticipated compound annual growth rate (CAGR) in Indonesia to up to 14% CAGR in India.
Due to current and anticipated growth in Southeast Asia, game localization for the region has picked up, with chief executive of Singapore-based game company Gumi Asia Pte Ltd. David Ng stating, "The growth has been quite staggering. That is what's fuelling the localization business because more and more people are starting to realize it's worthwhile" (Reuters). A 2012 Newzoo report reveals telling statistics about the Asia-Pacific in contrast to the rest of the global game industry – the region ranks just below Europe and North America in terms of the overall global market size ($19.3 billion versus $21.3 billion and $20.7 billion, respectively), yet has one of the highest CAGR globally (at 13% versus Europe’s 3% and North America’s 1%). Niko Partners, a leading market research firm for Asia's video game market, anticipates the Southeast Asian games market to reach $1.2 billion by 2017, rising from the current 85 million gamers in 2013 to over 130 million in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Not only are countries like Indonesia considered “a place to be” for Facebook game developers, but game developers and publishers can (and should!) jump on the opportunity to establish their brand and develop brand recognition now. Companies such as top social gaming company Peak Games are already entering Southeast Asia, and lack of market fragmentation means greater profit before the region becomes fragmented. By not exploring the widespread opportunity of game localization across all of Asia, developers and publishers may be missing out on an incredible increase in revenue and profits.
Indonesia is a highly attractive market, considering the 114% penetration rate of mobile devices with over 60 million mobile phones in 2013. In addition, Indonesia has over 240 million people with each owning at least one mobile phone (97% feature mobile distribution and 78% smartphone). Due to recent and anticipated growth in Indonesia, some companies are even stating, "The future of game localization in Southeast Asia is going to be decided by the Indonesian market" (Reuters). This is supported by the fact that Rovio localized Angry Birds for the Indonesian market, launching it on Facebook in Indonesia. CEO of Finnish company Rovio, Peter Vesterbacka, sees significant benefit to full culturalization of games in the region:
"We will build an Indonesia specific version and we will produce and we will work with Indonesian people to do that...as a company we want to be more Indonesian than the Indonesian companies. That's what we have been doing in China. We have worked with Chinese designers, developers, and that's how we make the game Chinese specific. We want to put more depth into the Angry Birds Indonesian experience and then we will take it to the world."
Indonesia has long been heralded as the market for Facebook games, since Indonesia surpassed the UK back in 2010 as one of Facebook's largest markets worldwide. Indonesia remains highly connected in the social media space with 96% of Indonesians using social media (more than any other country in the word), standing at Facebook's 4th largest market in 2013 and Twitter's 4th largest country. Brands like Arsenal Football Club even have Indonesian Twitter feeds in English and Bahasa due to the brand awareness Indonesians generate in worldwide Twitter trends.
Indonesian game studio Altermyth states that there is “ample opportunity for the creation of a large game market” in Indonesia, due to the composition of the market and the fact that “the market is still untapped and far from saturated.” Plus, market analysis organizations and leading game developers/publishers have kept a close watch on the region, predicting its emergence as a key emerging market. As such, experts cite the Indonesian market as a prime candidate for the localization of Facebook games. LAI recommends localizing Facebook games into Bahasa Indonesia to reap the advantages of the Indonesian game market.
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Analysts continue to watch Vietnam's game industry as the country's smartphone penetration rates are on the rise, coupled with a population of over 92 million (Appota). Vietnam is 2nd to China for smartphone growth with 4 million iOS devices in 2012 and a penetration of roughly 6 million iOS devices since 2013 (GamesinAsia). Mobile penetration is expected to leap to 17.22 million smartphones in 2014, 82% of which are new users, making Vietnam among the top 10 countries worldwide for smartphone consumption (Appota). According to Vietnamese mobile content distribution platform Appota, nearly half of iOS downloads and 44% of Android downloads in 2013 were game downloads. (Free games with in-app purchases remain the top monetization method in Vietnam.)
Online gaming is still a popular platform in Vietnam. Curfews set forth by the Vietnamese government remain in place for online gamers as online games continue to captivate audiences in Vietnam, and the number of paying online gamers is roughly the same as mobile gamers.
The Internet & Mobile Association of India estimates, "50% of India's mobile users have access to gaming content on their devices," posed to become the world's largest mobile market, currently the 2nd largest (after China). By 2017, India's game industry is expected to reach about $776 million at a compound annual growth rate (CAGR) of 22%, with $351 million reached by the console market at a CAGR of 19%. While mobile games in India are currently funded primarily through ads, it is expected that monetization will shift to other revenue models as mobile penetration increases.
India is a promising country for game developers and publishers. Neeraj Roy from Hungama Digital Media Entertainment Pvt. Ltd. has stated that, “India will have transitioned from 2G to 4G in a matter of a year. With nearly 1 billion people on mobile and an estimated 600 million Internet users in the next four years, India is one of the most exciting emerging game markets. With over 200 million devices sold annually and over 54 percent of the population below the age of 25, what can gaming companies do to tap into this fascinating opportunity?” According to local game developers, the mobile penetration in India has had significant influence in the region, since it “brought gaming culture into India,” and the influx of mobile gaming is something gaming giants took notice of. On numerous occasions, Indian developers met with Rovio, Zynga, and EA in addition to other industry giants, all keen on targeting mobile consumers in India.
India (and the Philippines) have the distinct advantage of English being spoken widely as a second language. However, when marketing games to those countries, developers should not assume that their U.S. English version will be well-received without also considering cultural issues to make sure the game is appropriate for the respective market. Furthermore, games localized into Hindi and Tagalog will reach the largest gaming audience since those are considered the official languages of their respective countries.
While game localization not only consists of language but also of cultural differences such as taste in art, it is critical to keep in mind that Southeast Asian gamers prefer a Japanese-style art to Western art (Reuters). At LAI, we keep cultural taste in mind and adapt game art, the UI, etc. to ensure each aspect of your game retains elements that will resonate with local gamers. (Read our blog post on the internationalization of game art to find out more.) It is important to work with specialists knowledgeable of regional taste since, for example, gamers in Thailand and Vietnam may prefer Chinese outfits, while gamers in the Philippines may prefer a more Western flavor (Reuters).
Southeast Asian game markets are defined by the sheer magnitude of young people pouring an incredible amount of time and money into mobile, social, and online games. Given current mobile penetration rates and expected growth within the region, coupled with the fact that the market remains largely unpenetrated, Southeast Asia is a prime area to target in the localization of your games. By focusing solely on the highly fragmented “big 3” of the Asian video game market – China, Japan, and Korea – game developers are missing a key opportunity to establish themselves within Southeast Asia before the market inevitably becomes saturated.
Now is a prime time to enter the Southeast Asian market, as the brand recognition you build now will go a long way in securing your share of the market before companies like Peak Games enter the market. (Peak Games established themselves as one of the top 3 social gaming companies in just 1 ½ years by producing games exclusively for the MENA/Turkey region and now eyeing Asian markets.) Localize your games for the region now, and begin building your brand before your competitors.
LAI strives to keep game developers and publishers updated on key markets for localization. If you find any errors or have additional information to add, please let us know at firstname.lastname@example.org. You can also stay informed of our new webpages by subscribing to LAI's monthly e-newsletter. Please check back soon on LAI's Global Game Markets page as we frequently update our web content to reflect new industry statistics and market projections. Latest page update: July 2014.