This article is part 2 of a series looking at whether Play2Live should consider expanding its streaming platform into the Asian market.
Part 1 looked at three major trends in Asia — the shift to mobile, the growth of eSports and the importance of casual and social gaming in Asia. The conclusion was that the Play2Live streaming platform was particularly well suited to these trends.
This article will look more closely at important countries in Asia, to decide where it might be best to start a marketing campaign, with a view to establishing an in-country presence.
Leading markets in Asia
1. Gaming in Asia
APAC countries generate about 52% of global game revenues. The largest markets are
· China, at approx $32 billion in annual revenue in 2017, and expected to grow to $38 billion in 2018
· Japan, $14 billion, growing to $19 billion
· South Korea, $4 billion.
Smaller markets include Taiwan, Indonesia and India (at approx $1 billion in annual revenue), Thailand, Malaysia, Vietnam and Philippines (< half a billion USD).
In most of these countries, male gamers outnumber female gamers, and the highest number of gamers of both genders is in the age group between 21 and 35.
Asia-Pacific has dominated the global market for video games for many years. It has now become mobile-centered. It is an extremely attractive market for users, developers and publishers.
A study of 40 countries, undertaken by Appsflyer shows the following:
· In Japan, Taiwan and South Korea, non-organic app installs rose by 37% in 2017. This is 61% higher than the global average. This means that gamers in these countries are responding to marketing and advertising of apps.
· These countries also have the most engaged gaming viewers, and return-on-ad-spend is 50% above the global average. Vietnam has the highest return on investment, globally, probably related to the low cost of media in that country.
· In Japan, the average revenue per user for gaming apps is more than double the global average of approximately $2 ($4.5 on Android and $4.8 on iOS). In Taiwan the figure is $3.7 on Android and $4.1 on iOS.
This means that investment in marketing, advertising and sponsorships is likely to return good ROI in Japan, Taiwan, South Korea and Vietnam.
2. Esports in Asia
South East Asia is the fastest growing region for eSports. There are nearly 10 million enthusiasts, with 2.8 million of them in Vietnam and 2 million in Indonesia, with these numbers predicted to double by 2019.
Part of this is because eSports has been accepted as a demonstration event in the 2018 Asian Games, and hopes to be fully included in the 2022 Games.
Academies to teach strategy and technique are being set up in Malaysia and Singapore. South Korea is regarded as the hub for eSports in Asia and it has been home to the best teams and training infrastructure. The number of local tournaments and competitions is increasing dramatically throughout the region and players are finding themselves with exposure to a much wider audience.
The economic value of eSports is being recognized. For example, Sea in Singapore owns a gaming platform called Garena. It also owns a financial services platform called Airpay. It has brought the user-bases of these two companies together by enabling digital payments for entertainment. It also has the backing of Tencent and is licensing their Chinese games for the Southeast Asia market. As a result, Sea is now Singapore’s largest gaming and e-commerce company.
Gaming profiles of 12 Asian countries
China’s gamer-base is known to be huge. Most of it within China’s tightly controlled internet, and therefore invisible to the rest of the world. China will account for about 28% of all global gaming revenues in 2018. Mobile will generate 61% of it, and this is expected to increase to 70% by 2020. Along with this comes increased willingness of gamers to spend on games. Until recently, the average spend per payer in China was less than half that of the USA.
Tencent is currently the market leader in China with over 50 percent market share of PC and mobile games revenue.
2. South Korea
South Korea is known worldwide to be obsessed with gaming — and often credited with being the birthplace of eSports. This is probably due to the government decision in the 1990s to invest in technology and especially in internet technology, with broadband becoming easily available. Today, over 47 million of its 51 million population are online — nearly 93%.
Government support continues. For example, there is a partnership between government and game developers at Blizzard, leading to major tournaments and competitions around the game Starcraft. Professional gamers have become celebrities, and many have huge sponsorships and all living expenses covered.
Nearly half of the country’s population are playing games — that is 25,6 million out of a population of 51 million. Up to 75% of these players are male.
In the rest of the world people tend to play games from their homes, but in South Korea gaming clubs or “PCBangs” are very popular. There are 40,000 of these clubs across the country. They are part social club, part internet café, part gaming venue, and they stimulate competition. Unfortunately, there are also numerous reports of addiction to gaming in South Korea.
The most popular form of gaming in is Massively Multiplayer Online Role-Playing Games (MMORPG). It has high download statistics and the average revenue per user is about $5.27, compared to the global ARPU of approximately $3.
Japan is the third largest gaming market in the world, behind the USA and China. This might be related to the fact that over 93% of the population are internet users. Its mobile games market is nearly the same size as that of the USA, with only a third of the number of gamers. Japanese gamers are the highest spenders. The average spend per payer is 1.5 times higher than in North America and 2.5 times higher than in Western Europe.
ESports in Japan has fallen somewhat behind other Asian countries, probably as a result of legislation that caps prize money. The Japan Esports Union (JESU) is a new regulatory body, merging 3 earlier eSports associations. It aims to help the Japanese eSports market overcome some of its regulatory challenges and to get athlete status for eSports players.
According to the Singapore Cybersports and Online Gaming Association, there are 500,000 gamers in Singapore, and that number is growing. There is focus on using gaming and eSports as a way to engage with the youth in Singapore. An eSports tournament, combined with a music festival, will be hosted in Singapore in August 2018, as part of the National Youth Council’s YOUTHx programme. An eSports academy has been set up to teach strategy and technique to competitors. Sea, Singapore’s largest gaming and e-commerce company, is hosting numerous tournaments in the region.
Taiwan has been slower than other Asian countries to recognize gaming as a sport and players have tended to earn less. Nonetheless, according to Newzoo, there were at least 13 million gamers and 600 000 competitive players at the end of 2016. Games owner Blizzard opened an eStadium in Taipei early in 2017. It holds 500 fans and will be used for events for the Blizzard games like Hearthstone, Starcraft2 and Overwatch.
Thailand had over 18 million gamers in 2017, with nearly the same number of female as male gamers. Games revenue was nearly $600 million.
Indonesia is the 2nd largest market in Southeast Asia. It contributes nearly 2% of Indonesia’s GDP. There is strong support for games developers from Indonesia’s Animation and Creative Industry Association, with a drive also for a reflection of Indonesian culture to be represented in games. Internet penetration is relatively low for Asia, at just 53%.
The cost of data has gone down by a factor 4 in the past year in India. This might push up the number of internet users in the country from the current 34% and open a huge market. It is already home to a tenth of the world’s gamers and has the second-largest smartphone user-base in the world. In 2017, there were 222 million mobile gamers in India and 89% of revenue was from mobile games. Both competitive and casual games are played.
The projection is that mobile revenues will grow from $1.1 billion in 2018 to $2.4 in 2020 — a CAGR of 49%. This figure is based on a relatively low spend per individual. If mobile payers in India were to pay as much as those in Indonesia, the market could be $5.2 billion by 2020.
9. Hong Kong
What is interesting in Hong Kong is that, despite the mass adoption of online and console gaming, arcades are still very popular. This has become part of the tourism industry in Hong Kong.
Hong Kong has lagged behind other Asian countries in adopting eSports, but it now plans to become an eSports hub and has set aside HK$100 million (approx 13 million USD) to create an eSports venue. There are plans to include eSports in the Hong Kong games held every 2 years.
New World Development is a Hong Kong-based retail conglomerate. It has teamed up with Beijing-based Hero Entertainment, an eSports brand, to develop a network of eSports stadiums in shopping malls in 9 cities across China. It aims to change the retail experience of millennials and young online games fans.
Internet cafes have been the base for the growth of gaming and eSports in the Philippines. In a country that has high levels of poverty, these cafes have enabled gamers to play for a few cents, without having to invest in their own hardware. Slow internet speeds in the Philippines remain an obstacle to the real growth of the sport.
The Games and Amusements Board in the Philippines officially recognized eSports in 2017.
Vietnam sees the video gaming industry as a major employer in the games production industry, well suited to the young, dynamic engineers and artists in the country. The number of gamers rose to nearly 40 million in 2017, from 13 million in 2013.
Education for gaming and eSports has prominence in Malaysia. A really interesting development has been the establishment of an eSports Academy, attached to the Asia Pacific University. Classes are held over weekends and students are taught by coaches with eSports backgrounds. Another programme is the year-long Riot Games Student Ambassador Program which is available in 28 Universities across Malaysia. The Garena student programme is similar to the Riot Games one. Both teach real-world skills such as Public Relations and Event Management.
Gaming is seen to be part of the country’s creative industry, and it contributed $700 million to the economy in 2017. As for other Asian countries, mobile is the dominant medium for play. The annual Malaysia Cyber Games are designed to attract amateurs into digital gaming, while the Malaysia eSports League targets professional gamers.
Play2Live in Asia — considering approaches to gaming
Play2Live (P2L) is the first decentralized streaming platform for streamers, gamers and eSports fans. The P2L platform moves beyond just these three primary participants to include tournament organizers, advertisers, bookmakers and suppliers of games into their ecosystem. Revenue will be shared with everyone in this ecosystem.
It seems fairly obvious that Play2Live should establish itself as a presence in Asia, where there is such growth in all elements of the Play2Live ecosystem: fans, players, game developers, tournaments, advertising and sponsorship.
All of the 12 countries profiled hold out promise for Play2Live. China may be difficult but Japan, Taiwan, South Korea, Singapore, Indonesia and India may be the easiest to penetrate, given the strong growth in numbers and governmental support for gaming.
Play2Live is, however, looking further than just penetrating the gaming and eSports world. It is also looking to use blockchain and the LUC cryptocurrency token as underpinning features. In addition, it wants to include the facility for betting to happen from within the platform.
The next parts of this series will, therefore, look at the acceptance of cryptocurrencies in these countries, and at attitudes towards betting and gambling in Asia.