Industry 4.0 gives rise to meteoric gaming industry

September 15, 2020 | 09:00
Capitalising on ASEAN’s booming online gaming scene, many companies are stepping up presence with Vietnam a potential target.
industry 40 gives rise to meteoric gaming industry
Flappy Bird game - illustration photo

Vu Nam Hung, head of Publishing at Vietnam-based mobile game group Amanotes, told VIR that the ASEAN gaming market is growing at an unprecedented rate in recent years, predicting that growth would be even stronger in the near future.

Hung explained that over 80 per cent of the region’s urban online population are gamers, while Southeast Asia’s mobile-first gaming initiatives far surpass the PC and console segment – and Vietnam is not excluded from the trend.

“In addition, a young and skillful workforce with very affordable costs are maybe the most attractive factors that draw the attention of foreign gaming companies looking to stay competitive in this fierce market,” Hung said. “They are looking for either a more affordable workforce with adequate skills to keep their cost structures low, or to leverage the growing game makers’ community with lots of raw diamonds to put their bets on. Vietnam is such a place, with an early-born and fast-growing gaming community since the day of the legendary Flappy Bird game.”

Vietnam has become more attractive to IT and gaming companies, as its national strategy for Industry 4.0 has put a strong emphasis on the huge potential in IT infrastructure and large smartphone penetration as the key enablers for the development of its digital economy, according to Hung.

The latest “ASEAN Economics: Disruption Watch” report by Maybank Kim Eng cited that the bloc’s online gaming market was already rising rapidly before the pandemic, jumping by over 28 per cent compound annual growth rate to $4.2 billion in 2019 from $1.6 billion in 2015. Improved connectivity and rising ownership of smartphones have accelerated the gaming boom.

According to the report, Indonesia and the Philippines are the top spenders on video games in ASEAN. While top mobile games are largely dominated by Chinese firms, Singapore-based Sea Group-owned Garena’s Free Fire tops the list in the region and is enjoying high popularity globally. Garena’s active and paying users jumped by over 25 and 40 per cent in the first two quarters of 2020, driven by government lockdowns. Gaming hardware firms are also moving production into the region, particularly to Vietnam.

French video game publisher Ubisoft set up a new studio in Vietnam’s central city of Danang, focusing on creating original mobile games and instant games for social media platforms. The studio plans to recruit about 100 employees over the next three years to collaborate with Ubisoft’s mobile teams around the world and create games based on established franchises in an exciting new step into a booming city.

According to Ubisoft, Southeast Asia’s gaming market is one of the fastest-growing worldwide. Internet cafés in Vietnam are popular social hubs where people come to play, and mobile gaming is increasingly popular due to the recent tech boom – putting Ubisoft Danang at the centre of a fast-expanding market.

Meanwhile, Japan’s Nintendo moved some of its Switch manufacturing to Vietnam. The videogame behemoth sells about 40 per cent of its Switch consoles in the US. Nintendo makes almost all of its Switch consoles in China through several contract manufacturers including Foxconn. The company had been considering diversifying its China-heavy Switch production before the US-China trade tensions flared. Earlier reports by The Wall Street Journal suggested that the production in Vietnam was for two new Switch models.

Cekiel Danielson, director of Consumer Sales at Intel Asia, told VIR that the PC is the most powerful gaming platform, with 1.3 billion users globally. This makes gaming a top priority segment for Intel’s client computing business.

“Our leadership in gaming and e-sports creates opportunities for our manufacturers, software vendors, and retail partners, and we’re committed to consistently delivering a wide-range of technology solutions for gamers everywhere. Part of this effort comes from leveraging our stewardship of the gaming and e-sports industries to invest in the future, and we are continuously pushing the performance boundary to deliver even more amazing PC gaming experiences for all,” Danielson said.

“This ethos is at the heart of the launch of our latest 11th Gen Core processors, which offers up to twice the game performance over the previous generation, and we are excited to bring the ultimate gaming experience to more thin-and-light form factors in Vietnam and beyond,” he noted.

By Olivia Bui

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