Southeast Asia Gaming Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Southeast Asia Gaming Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Southeast Asian gaming market is expected to register a CAGR of 8.5% over the forecast period. The increasing popularity of various sports and growing investments in internet infrastructure are the primary factors that offer immense growth opportunities to the market.

Key Highlights

• The emergence of 5G technology in 2020 was expected to increase wireless network investments in infrastructure. Global 5G wireless network infrastructure revenue was set to reach USD 4.2 billion, an 89% increase over the 2019 revenue of USD 2.2 billion.
• Additionally, investments in 5G near-radio network infrastructure were expected to account for 6% of the total wireless infrastructure revenue of communications service providers (CSPs) in 2019 and reach 12% in 2020, representing operators’ motivation to capitalize on the opportunity to provide fast and cost-effective service. 5G is predicted to enhance performance 100 times compared to 4G networks, provide a better user experience, and drive the Southeast Asian gaming market.
• A trend that has also been fuelling the games market in the region is the rise of eSports, which is essentially a competition using video games. With the rising viewership on online platforms such as Twitch and YouTube, advertising is expected to generate more revenue during the forecast period.
• Moreover, Overwatch League Grand Finals, which took place on September 29, 2019, saw a 16% increase in viewership over the previous year, resulting in a global AMA (Average Minute Audience) of 1.12 million. Growing viewership and an increasing trend toward sports have opened up new opportunities for gaming in countries other than China, such as Indonesia, Vietnam, Malaysia, etc.
• While a great form of escapism from the ongoing crisis, video games also allow players to remain connected to friends and family through online multiplayer and group chats. Unlike other industries, Southeast Asian gaming is witnessing a spike in demand. The gaming industry is progressing based on influencer partnerships, in-app advertising, innovations, and gaming partnerships. In the long run, the industry will flourish even more.

Key Market TrendsMobile Segment to Hold Significant Market Share

• By 2021, the number of mobile online gamers in Southeast Asia will rise to 250 million. Indonesia, Malaysia, Thailand, Vietnam, Singapore, and the Philippines are the six most significant countries for mobile gaming in Southeast Asia.
• The availability of a free-to-play option is one of the significant drivers of the growth of mobile gaming compared to personal computers. The advent of cloud-based mobile gaming will drive this growth even further.
• Though eSports is a relatively new concept in Southeast Asia compared to traditional games, it is growing exponentially due to the growth of the gaming market in the region. According to the All-Correct Games blog, by 2021, the number of mobile online gamers in Southeast Asia will rise to around 250 million. Malaysia, Thailand, Vietnam, Indonesia, Singapore, and the Philippines are the six most significant countries for mobile gaming in Southeast Asia.
• Additionally, over 55% of mobile gamers are around 55 years of age, and only 8% are teenagers. This is mainly because of the popularity of hyper-casual and casual games, which don't require many skills and can be played by any user. Hyper casual games mostly monetize through advertising. However, the mobile gaming market is seasonal, which means the popularity of the games will fade away soon; therefore, the demand for new games is difficult to forecast, retraining the market growth.
• On the other hand, the advent of cloud gaming has removed the constant need for hardware upgrades, and players worldwide can play cloud games on their existing devices and on future devices that may have low specs but accommodate games played on the cloud. The most significant opportunity for vendors in the segment is to access smartphone gamers, who comprise a significant share of the gaming audience and prefer to play PC and console games on their mobile devices.
• A Google survey revealed that at least one in three smartphone owners in Southeast Asian markets played mobile games at least once in seven days. Over 82% of Southeast Asia's urban online population are gamers, and mobile gaming leads by a substantial margin over PC and console games.

Increasing Internet Penetration to Boost the Market Growth

• The online gaming market has witnessed impressive volumes owing to increased internet penetration and the proliferation of low-cost smartphones among the urban and rural populations. This ecosystem is monetized through revenue streams, like in-app purchases, pay-per-download, subscription services, in-app advertisements, incentive-based advertisements, etc.
• With the rising internet penetration, major technology vendors are investing in online gaming, driving the regional market growth. For instance, in September, Amazon ramped up its expansion into the MMORPG (Multiplayer Online Role-Playing Game) gaming industry with the release of "New World." In February 2021, Google LLC shut its in-house Stadia game development studios to refocus Stadia as a platform to provide games and game streaming services from existing developers instead of developing its fun for the service.
• According to Akamai Technologies, gaming software downloads account for large amounts of internet traffic when an update is released. The software update for a modern game generates enormous traffic, roughly equal to 30,000 web pages. Thus, multiple people in the same house who try to play an online match simultaneously can affect any home's internet bandwidth.
• According to Ericsson Mobility Report 2021, by the end of 2027, there will be 4.4 billion 5G subscriptions worldwide, accounting for over half of all mobile subscriptions. By 2027, data traffic per smartphone in Southeast Asia and Oceania will be expanding at the highest rate globally, with 5G subscriptions estimated to reach 15 million by the end of 2021.
• Mobile subscriptions in Southeast Asia and Oceania have surpassed 1.1 billion. 5G subscriptions were estimated to reach up to 15 million by the end of 2021 and continue to increase rapidly over the next few years, reaching around 560 million by 2027. Data traffic per smartphone will grow at the fastest rate globally in Southeast Asia and Oceania, reaching 46 GB per month in 2027, recording a 34% CAGR.

Competitive Landscape

The Southeast Asian gaming market is highly competitive, owing to the presence of many small and large players. The market appears to be moderately concentrated, with the major players adopting strategies like product innovation, service innovation, mergers, and acquisitions to stay ahead of the competition and increase their reach.

• November 2021 - BANDAI NAMCO Entertainment released a Fast and Furious-themed game called Spy Racers: Rise of SH1FT3R on PlayStation 4, Xbox One, Nintendo Switch, and PC Digital. The game was developed in partnership with Universal Games and Digital Platforms. Further, the game uses a 3D cloud and is filled with action racing games that attract millennials across the globe.
• October 2021 - Tencent announced that its famous mobile game titled ‘Honor of Kings’ officially became the biggest mobile game globally. It became the first mobile title to break USD 10 billion in revenue worldwide.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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