Like the mobile payment industry, China’s gaming market is a highly cleaned-up field, where Tencent and NetEase take a dominating 70% of the market. Instead of diving into the competitive market, increasing domestic internet companies are turning their sights to Southeast Asia (SEA), a relatively untapped region that not only shares a similar culture with China but also has more relaxed control from the governments.
A recent report from market research firm Niko Partners further demonstrates the potential of this area by giving impressive projections for the market size. The combined PC online and mobile games revenue in SEA is projected to reach $2.2 billion in 2017, rising to $4.4 billion by 2021, the report pointed out. This forecast has been revised upward from last year, based on the strength of e-sports and new hit international games entering the SEA market.
The number of PC online and mobile gamers in SEA is projected to reach 300 million by the end of 2017, rising to more than 400 million by 2021.
Like elsewhere in the world, mobile games are recording a strong uptick in revenue, expecting to surpass PC games revenue in 2018. However, mobile games revenue is additive, not cannibalizing, PC games usage, the report added.
In the wake of globalization initiative of Chinese tech giants, several domestic companies have been accelerating their layout in the SEA region, including Alibaba Games, Perfect World, LineKong, and more.
Tencent has already established a foothold in the region with investment in Sea Limited, (formerly known as Garena) a leader in SEA for PC and mobile games operations and distribution. The company went public on last month in the US, raising $884 million in the IPO.
“E-sports has had a huge impact on the Southeast Asia region and is the primary driver for the explosive growth in PC online games. The heavy growth of the MOBA genre is a major contributor to mobile e-sports as well,” said Lisa Cosmas Hanson, managing partner of Niko Partners.