Southeast Asia Gaming Consumer Economy

Southeast Asia GamingConsumerEconomy InsideGaminglandscapeGamer demographics andpreference3must-havestocapturegrowthopportunities

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting2MethodologyDisclaimerSoutheast Asia Gaming Consumer Economy is a co-authored research report by Telekom Malaysia and twimbit. The research process included a discussion with leading industry participants, a thorough review of all existing published material, a review of annual reports on major industry participants, twimbit analysis, and industry sources to derive the state of gaming economy in Southeast Asia (SEA). Specific third-party sources have been referenced. This research is conducted in Q2 2022. This report was co-authored by Telekom Malaysia and twimbit as of the date of writing. The publication is solely for information purposes over a limited period to provide a perspective on the market. twimbit does not make any warranty for the accuracy of the data as these are primarily based on interviews and therefore, liable for fluctuation. Also, twimbit does not take responsibility for incorrect information supplied by manufacturers or users.

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reportingSEA gaming consumer economy highlights3SEA has 6major gaming marketsIndonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam account for 85% of the gamer population in the region. The internet accessibility and smartphone penetration is high, which provides major growth opportunities for the gaming economy.18% of gamers view eSport tournamentseSport tournaments viewership is at nascent stages and is forecasted to grow exponentially. Governments and game publishers are taking initiatives to host open competition and tournaments in order to accelerate the growth of the community. Game streaming will be a significant revenue contributor in the region in coming years. Mobile gaming is highly preferredMobile gaming is the dominating category in SEA gaming economy. To address this, PC game franchises released hits like League of Legends, Final Fantasy and PUBG to mobile. This trend to serve mobile gamers will continue in the region.Gamers have high willingness to spendIn SEA, the more urbanisedthe population is, the more they are willing to spend to play and watch games. As of 2021, gamers in the region collectively spend US$5.57bn, a 13.7% CAGR from 2018.

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reportingSEA houses 276.4milgamers, accounting for 18.7%of the Asia gaming population4Gamer population size(million, 2021)% of total population32.042.938.220.162.0%45.8%39.2%39.1%VietnamMalaysiaThailand110.240.2%IndonesiaThe gaming industry is becoming more significant in SEA, as more than one-third of the population are active gamers. The gaming population is expanding rapidly, with an 8.2% y-o-y increase as connectivity infrastructure and smartphone adoption improves. The global average stands at 5.4% y-o-y growth.While Indonesia and Philippines are leaders in having the most gamers as a percentage of the total population; Malaysia leads in gamer population as percent of total population. Over time, the gamer population could surpass beyond 50% of the total SEA population.Philippines

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reportingx5Gamer population size forecast(million, 2021-2025f) Gaming population may exceed 50% of total SEA population by 2024SEA current population is at 640 million.The rapid growth pace of the gaming population has and will continue to outgrow the SEA total population growth. In just a few years, 1 in 2 Southeast Asians is likely to be a gamer, active on theirconsole, desktop or mobile.This pace will be more significant inyounger median age Southeast Asian countries, such as Vietnam.The average CAGR in the region between 2021 to 2025f is 7.4%.276.420212022f2023f2024f2025f296.9324.4318.8367.8Gaming populationSEA population

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting6Top 5game genres in SEA(2021)ActionRole playingCasualAdventure86% of Southeast Asian gamers are actively participating in these top 5 game genres. Generally, the leading game genre, action strategy, has a lower entry barrier and a lower time commitment. For instance, some of the leading action strategy games in the SEA region are Counter Strike and Mobile Legends. Both games run between 5-10 minutes for each round before restarting a new round .The popularity of the strategy genre is also exhibited in the SEA Games 2022,where subset of it -Multi-player Online Battle Arena (MOBA), was the main competing genre.51% of Southeast Asian gamers are active in action strategy and casual games

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting7mobileconsoledesktop102.0Gamers by gender vs. device usage(million, 2021)83.111 0 . 265.092.6The gender split among gamers is almost even, with male players accounting for 53% of the total, while females are 47% in 2021.In SEA, the ratio of male players across devices, on average, is above females, except for Indonesia’s mobile gaming market. In the country, females account for 54% of mobile gamers. In fact, Indonesian female mobile gamers are one of the most active in the region.Mobile gaming is the biggest and fastest-growing segment in the region. The supply of affordable and higher-spec smartphones improved internet accessibility and performance, and global game publishers focusing their investment in the region drives this growth even further.Above 50%of gamers are playing through more than 1 device in SEA

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting8SEA is home to 5,574 mobile game publishers. Together, Vietnam and Indonesia account for 55% of them at 1,600 and 1,466, respectively. Despite a vibrant environment, only one publisher, Garena, made it into the list of top mobile games in 2021, according to the iOS App Store and Google play store. The market is extremely competitive. As seen, many international publishers have targeted SEA and continue to yield excellent results. This is because, with 17.4% growth, SEA is the fastest-growing mobile games market in the world.Thus, differentiated experience in-game is needed to compete effectively in the region.Source: iOS App Store and Google PlayStoreTop mobile games andpublisher(2021)Legends: BangBangShanghai Moontoon Technology Co.Ltd.Ni no Kuni: CrossWorldsNetmarbleCorp.StumbleGuysKitkaGamesRobloxRobloxCorporationClash ofClansSupercellOySubwaySurfersSYBOGamesGenshinImpactmiHOYO Co.Ltd.Free FireMAXGarenaIntl.Candy CrushSagaKing.comLtd.CoinMasterMoonActiveInternational publishers dominate SEA’s top mobile games list

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting, Campaign Asia Pacific, Nielsen IQVideo games are fuel to eSports expansion in the regionThe preference for video games in SEA are similar across countries. In fact, games like Dota has been a regional favorite for almost two decades –the longest streak. The characteristics that capture Southeast Asian gamers are strategy and first-person shooter (action) games. Also, the gamer population exhibits willingness to purchase games with Call of Duty and Minecraft topping the list for 4 countries while Final Fantasy, a subscription model game, leads in Thailand. The popularity of these games are the reason for eSports growth and acceptance in the region. This led to eSports being sanctioned by theInternational Olympic Committee during the SEA Games 2022. League ofLegendsinVietnam#1MinecraftinSingapore#1OverwatchinVietnam#4The WalkingDeadinVietnam#3FinalFantasyinThailand#1Call ofDutyin Malaysia,Indonesia,Philippines#1inMalaysiaDotaTop videogames andranking in SEA countries(2021)in SingaporeinIndonesia9

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reportingeSports and gaming are going mainstream In 2021, 3 eSport tournaments hosted in SEA made the global most-watched list. One of which is a global tournament with rosters dominated by SEA teams.The Covid-19 pandemic has accelerated eSports viewership in SEA. Fans have grown accustomed to watching live tournamentsonline throughYouTube, Twitch and Facebook.Developers, publishers, service providers and event organisers in the eSports industry are now expected to use new technologies and broadcast tactics to deliver immersive and differentiated experiences. Many are increasing their investment to enhance the gameplay, competitiveenvironment and tournament experiences to capitalise on the growing demand.Additionally, mobile eSport tournaments takecentre stage in online fans’ viewership and are likely to be the mainstay of gaming in SEA. As the roll out of 5G networkscontinue in the region, it will open more avenues for gamers across platforms and through cloud gaming.Global most watched eSport tournaments by hours watched(million, 2021)The International 10MPL Indonesia S8PGL Major StockholmLCK SpringM3 World ChampionshipMid-Season InvitationalMPL Indonesia S7VALORANT ChampionshipLCK Summerhosted in SEA174.8107.276.971.367.562.661.260.554.346.0Source: eSports CHARTS10

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting11SEA is a leading contributor towards Asian gaming revenue. Since the beginning of the 2010s, the revenue from mobile gaming and online gaming in the region have been growing and stabilising. Mobile games accounts for approximately 70% of in-game revenue in the region.Urbanisationand the younger age populationhave positively impacted this willingness to spend for entertainment in the region.For example:•49%of Indonesian mobile gamers spend more than US$9/annum/person on items and in-game packages•50%of Thai gamers spend more than US$27/annum/person annually on their favorite genre•60% of Singaporean gamers spend on average US$189/annum/person •87%of Malaysians gamers are willing to spend on average US$40/annum/person on gamesAlso, Vietnam and the Philippines are experiencing over a 50% and 55% increase in consumer spending on mobile gaming, respectively, compared to 2020. Importantly, governments in the region are enabling the growth of spending by championing initiatives for game development and game exhibition –Indonesia and Vietnam in particular.Total game revenue from gamer spend(US$ billion, 2018 and 2021)3.79+13.7%64% of SEA gamers are willing to spend but amount differs due to economic disparity

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reportingSoutheast Asian game monetisationstrategies are aligned with rest of Asia3 popular monetisationstrategies Free-to-play (F2P)Hybrid monetisationGrowing in popularitySubscriptionMaking a comebackHighly successful monetisationmodel. Accounts for >86% of mobile games revenue in SEA. Common tactics: 1.In-app purchases is the monetisationmodel of top game titles in SEA.2.In-game ads help to capture revenue from gamers who typically do not spend in-games.Allows developers to build multiple revenue streams in 1 game. A mix of different monetisationmodels, such as a combinationbetween in-app purchases and in-game ads.Commonly, game developers collaborate with commercial marketers to create branded items and skins for gamers to differentiate between each other. Essential to build a complementing combination to win over different types of gamers.Traditional subscription model where the gamer pays a monthly fee to access additional content. An improved model has been showing a successful streak–battle passes. This model runs by seasons decided by thedevelopers. Gamers who purchase a battle pass will be given an opportunity to unlock exclusive rewards based on theirperformance. It is a paid-for positive reinforcement strategy that incentivizesbetter gameplay.12

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reportingCloud gamesCloud games, otherwise known as Gaming-as-a-Service (GaaS) is likely to grow in popularity. GaaSleverages on cloud servers and internet connectivity. Penetration and reliabilityhave improved significantly in the region. This service is most likely to witness a parallel growth with mobile games.Mobile eSportsOver the last 3 years, there’s been an influx of video games that haveextended into the mobile platform. PC franchises like League of Legends, Apex Legends and Final Fantasy have all created a mobile version to capture the gamer segment. The dominance of mobile gaming in SEA prompts prevalent opportunities to build successful mobile eSport titles that can capture the community.Future is female Female gamers are a key growth driver in the Southeast Asian gaming economy. The gender split of gamers in each country is even, especially in mobile. Also, females are more willing to spend in F2P games. As gaming becomes mainstream, female gamers is a group that all industry participants stakeholders need to strategiseand address to remain competitive.Southeast Asian gaming landscape presents growth opportunitiesas the market expands13

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting3must-haves for gaming industry participantsThe SEA gaming landscape providesimmense growth opportunities. Industry participants should leverage technologies to capitalisethese opportunities.Deliver an uninterrupted gaming experience with edge computing#1Provide flexibility for gamers to play and watch#2Equip with the ability to scale up or down instantly / on-demand#314

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting#1 Deliver an uninterrupted gaming experience with edge computingEdge gaming facilitiesNetwork edgeEdge GatewayISP networkLow latency is the key demand of gamers in SEAand globally. Delivering latency-sensitive digital media that can achieve peak performance, regardless of location and device type is the foundation to a successful game.Given the nature of SEA, adopting edge computing for an uninterrupted game experience is important.How edge computing delivers an uninterrupted gaming experience? Edge computing reduces the distance data must travel. With it, compute power is pushed closer to the network’s edge.Ultimately, gamers can enjoy the lower ping and reduced lag in games.An example would be delivering real-time strategy games, where Artificial Intelligence (AI) is involved. When computer processing is conducted locally, there’s an upper limit to its performance. If this is offload to a server placed on an edge infrastructure, gamers can play the real-time strategy game with an elevated, low-latency experience.Edge computing can deliver the uninterrupted gaming experience, without needing top-notch internet infrastructure, a common issue in less urbanised towns. 15

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting16Flexibility to streamGamers should be able to stream game content seamlessly and be given options to watch online and offline. Give users choices to watch in order to promote viewership growth.#2 Provide flexibility for gamers to play and watchPlay across deviceWith more than 50% of gamers playing through multiple devices, games need to have the flexibility to allow a transitional experience.Options to spendProvide gamers with more creative options to spend through collaborations, partnerships or new tactics. To convert non-spending gamers, developers need to look beyond in-game ads and think towards credit earning.Flexible user experienceGames should repurpose into platforms, allowing a flexible range of user experiences. While many might still simply want to shoot guns, some may want to find room to socialise.

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reporting17Cost-effective developmentAs gaming demand grows, so does supply. It is important for developers to build a game architecture that is scalable, reliable,and agile in order to address traffic bursts, server merges, in-game bugs and more.Edge cloud-native solutions allow developers to leverage capacity on demand to scale up and down with the amount of gamers. It is more reliable than guessing the server demands and potentially over-purchasing or under-purchasing hardware. It is important for modern game developers to equip themselves with this ability to ensure economies of scale and that they do not suffer from overpaying for unused server capacity. With tough competition in the industry, building a scalable architecture should be the primary priority. Performance at scaleGrow with resiliency#3 Equip with ability to scale up or down, instantly3 benefits of a scalable architecture

Southeast Asia GamingConsumerEconomySource: twimbit analysis, industry reportingTM Edge Gaming is a holistic edge gaming ecosystem that leverages TM’s edge facility located closer to the end user to provide ahigh quality, low latency, reliable, stable, and immersive digital gaming experience. TM Edge Gaming is compatible with all devices and operating systems and also provides API integrations with ISPs for a smoother end-user experience.TM Edge Gaming: The Game Changer18

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