Vietnamese game behemoth VNG eyes international growth in 2023 strategy

In its latest AGM on July 10, Vietnamese technology giant VNG Corporation has laid out an ambitious roadmap for the enhancement of its core products and an aggressive push towards global markets as part of its 2023 business development strategy.

The firm has outlined a particular emphasis on its digital transformation arm, serving its enterprise clients in the years to come.

VNG's CEO Le Hong Minh shed light on the company's direction for its gaming segment during the corporation's recent general assembly. VNG aims to boost its presence in overseas markets, primarily in Southeast Asia, leveraging its strength in online game publishing. The firm is set on rapidly expanding its market share in emerging markets while optimising its operational costs.

Part of VNG's strategy also involves fostering international collaborations and prioritising long-term investments to maintain high-quality games with extended lifespans. The company has targeted its focus on the development of AI investments.

"The results will be rewarding, and the company will never invest beyond its financial capabilities," Minh emphasised.

Regarding its popular messaging app Zalo, VNG plans to continue investing in its core product to enhance the user experience. The firm aims to deepen its AI capabilities and has set a goal to launch Kiki, its Vietnamese language virtual assistant, on television this year.

VNG's business will pivot around four main pillars of gaming, Zalo, ZaloPay, and digital transformation – which is being established as a critical business division.

When asked by shareholders about investments in unprofitable companies, Minh explained that investment decisions will be guided by market conditions. The company is looking to persistently invest in AI, underlining the need for patience in this arena.

As for ZaloPay, VNG's digital payment platform, Minh insisted that it was not designed to compete with or replace banking apps. ZaloPay primarily focuses on regular, everyday transactions. The company is working towards expanding its partnerships with banks and payment venues to achieve significant coverage.

ZaloPay continues to operate at a loss, a move that Minh justified as a long-term investment that focusses on quality. Only when this is ensured will the company explore opportunities to boost revenue.

For the fiscal year 2023, VNG is aiming for a net revenue of approximately $386.71 million, representing a 19 per cent increase compared to the same period in 2022. The company expects a post-tax loss of about $23.83 million, a significant reduction from the previous year's deficit of around $63.92 million. Due to the losses, no dividends will be distributed in 2022.

VNG reveals increased losses VNG's 2022 financial report shows significant losses amidst rising expenses.

VNG embraces technology to lead the gaming industry With recent developments in the gaming industry, VNG is quickening its digital transformation to keep its position and venture further into the international market. Giap Le Trong, head of the Game Publishing Platform at VNG Corporation, spoke to VIR’s Bich Thuy about the company's strategy and targets at the AWS Summit Singapore 2023.