Indonesia locks horns with Taiwan in an esports exhibition game at the 2018 Asian Games in Jakarta. (Antara Photo/Dhemas Reviyanto)

What Can Southeast Asia's Gaming Companies Do to Stay Ahead of Foreign Competitors?

BY : EDISON CHEN

APRIL 24, 2019

Southeast Asia is the fastest growing region in the world for the gaming industry. In particular, increasing internet penetration and rising disposable income have given rise to a rapid development of mobile games. Southeast Asia will soon become the next battlefield for mobile gaming companies from all corners of the globe.

However, the gaming market in Southeast Asia is still dominated by foreign titles due to foreign gaming companies having more experience of expansion and stronger financial backup.

Southeast Asian gaming companies are still finding it hard to survive, let alone make fortunes from the games they develop.

Tagtoo recently conducted an in-depth research on the gaming market in Southeast Asia which discovered three key takeaways on how local gaming companies should react in response to competition from more established foreign companies.  

One, gaming companies should cater to what gamers really want. There are no one-size-fits-all games for different demographics of gamers.

Creating titles that vaguely fit the taste of the majority of gamers can no longer guarantee success. Each demographical niche has developed its own unique preferences for games and a different set of user behaviors.   

For example, rather than targeting just male gamers, gaming companies should segment the population into specific groups—including female gamers—and create exclusive titles based on their individual interests.

Gaming companies can still get millions of users installing a new game app by launching titles that appeal to the lowest common denominator, but the problem is most of these users are not loyal gamers but regular users who are more than likely to delete new games after a few days. 

Gaming companies should make games for real gamers. It is a lot easier to get gamers to buy games that truly appeal to their taste. Any titles targeting a broad audience, instead of a particular group of gamers, are less likely to survive.

Two, gaming companies should include as many elements of esports as possible in new games since esports is gaining in popularity and starting to exert a stronger influence on gamers,

This will allow gaming companies to create more momentum in sales.

Take Free Fire, a mobile game developed by independent company Garena in 2017, for example. Free Fire became a huge hit in Southeast Asia after being featured in Garena World 2019, a gaming tournament in Bangkok that attracted a huge crowd of nearly 300,000 people.

Quality is key if a game is going to be esports friendly. Gaming companies should focus on producing gamer-friendly user interfaces, fair and bug-free competition and easy-to-learn but hard-to-master gaming settings.

Hosting an offline esports event still requires a large investment, but it remains one of the most effective marketing ploys, aside from digital advertising, to grow sales and attract more fans to your games.

The last takeaway from the Tagtoo survey is gaming companies must know how to monetize their titles. This has been a big problem for local companies. Indonesia has the second lowest average revenue per user (ARPU) in the Southeast Asian gaming industry, $8.28. Singapore's ARPU is $78.15 for comparison. There is still a long way to go for Southeast Asia to reach a higher level of market maturity.

Despite the growing population of gamers in Southeast Asia, the overall ARPU in the region, excluding Singapore, is simply not satisfactory. The Tagtoo survey suggest gaming companies should rely more on subscriptions to improve it. 

Subscriptions will help gaming companies earn a more predictable revenue flow. This will not only significantly lower the risks of launching and publishing new titles but also allow gaming companies to focus more on product development and make them less likely to sacrifice quality.

Southeast Asia will definitely see more subscription-based content mushrooming up. As shown by the success of Netflix and Spotify, the subscription model is gradually becoming more accepted in the region. More people in Southeast Asia will soon be willing to pay for better quality content. Gamers are no exception.

Edison Chen is a business development manager for Tagtoo, a leading ad-tech company in Asia. He launched Tagtoo's Indonesian office and is a regular contributor to Chinese tech media.

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