Gaming industry has a bright future

Gaming industry has a bright future

Thomas Hundt

When people in Thailand look like they are very focused on their smartphones, they are usually playing a video game.

One in ten video gamers in Southeast Asia can be found in Thailand, as young people and more and more adults are playing video games. Around 93 percent of internet users in Thailand between the ages of 10 and 50 play video games on their smartphone. This proportion is well above the global average of 83 percent.

However, gamers also use other devices. According to a survey, around 70 percent of internet users also use video game consoles and 84 percent also play on their computer.

GAMERS SPENDING MORE AND MORE MONEY

According to Statista, the video game industry in Thailand is expected to generate around US$ 2.2 billion dollars in revenue in 2024. Within the Southeast Asian video games market, which is estimated to be worth US$ 13.1 billion in 2024, the Kingdom ranks second after Indonesia (US$ 3.7 billion). The Thai gaming industry generates the largest revenue from the sale of gaming hardware.

Eight out of ten games are played on a smartphone, and for good reasons. Statistically, every citizen has a smartphone and many even have several. Mobile phone contracts are cheap, so even people with low incomes can play games online or watch game broadcasts on their devices. Mobile contracts also do not limit data volumes and network speeds are high. Fifth-generation high-speed networks completely cover urban centres.

The most popular mobile games in terms of revenue and number of players are currently: Mobile Legends: Bang Bang developed by Moonton from China, RoV from Tencent (China), Free Fire from Garena (Singapore), Coin Master from Moon Active (Israel) and eFootball (Konami, Japan). The gaming platform Roblox from the USA is also frequently used to play online or create your own computer games.

SPECIAL FEATURES OF MARKETING

Influencers and video streamers receive even more attention in Thailand than in other countries. The most important channels in Thailand are Twitch, Facebook, TikTok and YouTube.

The most important messenger app, Line, is increasingly developing into a multiple platform and also offers its 54 million users video games. The strategy game “Let’s get rich” from Line became a huge success.

FOREIGN PROVIDERS ARE DOING GOOD BUSINESS

The government's Digital Economy Promotion Agency (depa) calculates that foreign video games account for more than 95 percent of the market. Major publishers such as EA Games, Tencent and Garena have therefore opened their own sales offices in Bangkok. And other developers and publishers from China, South Korea and the USA are entering the growth market.

The US developer and publisher of computer games Riot Games, for example, founded a representative office in Bangkok at the end of 2023 with the aim of tapping into the entire Southeast Asian region. Riot Games focus is on mobile games, which are to be adapted to local tastes, characters and cultural elements.

A third of gamers prefer multiplayer roleplaying games, while fighting games follow in second place. Games based on dance, music, and films – for example games based on well-known horror stories – are also popular among gamers. Young people are also strongly oriented towards trends and characters from Korea or Japan.

GAMES START FREE OF CHARGE

In Thailand, as elsewhere, many online games are initially free of charge, but in-game and in-app purchases to unlock additional content and functions drive up the providers' revenues. They are also earning more and more money from in-game advertising.

CONSOLE MARKET STABLE, ACCESSORIES ARE BOOMING

The market for gaming consoles such as Microsoft’s Xbox and Sony’s Playstation is expected to grow by around 1 percent per year until 2029. This is because the number of PC games on offer shrank to 24 video games in 2023.

However, they have a loyal customer base. Around 216,000 video game consoles were sold in Thailand in 2023. Their imports under customs tariff number 9504.50 amounted to US$ 62.6 million in 2023. China supplies more than 99 percent of video game devices.

However, expensive accessories are used. Computer games in three dimensions are becoming increasingly popular and sales of virtual reality glasses are expected to grow by almost 8 percent per year from around US$ 75 million in 2023 to 2029.

LOCAL GAMING INDUSTRY TO BE STRENGTHENED

The depa wants to strengthen the domestic gaming industry and ecosystem. Thai gaming companies and start-ups receive development loans and training from the depa.

Ten game developers have joined forces to form the Thai Game Software Industry Association. Domestic game developers include Corecell, FairPlay Studios, GAMEINDY, Innova, PIGSSS GAMES, RingZero Game Studio, Urnique Studio, Vermillion Digital, and Yggdrazil Group.

From July to September, 2024, the game association is organising the ‘Thai Games Talent Showcase’ series of events, which also includes seminars and competitions. Visitors can admire the latest games and trends from development studios.

In addition, 17 local publishers of online games are active. They can also help foreign developers to enter the market. The game publisher Asphere Innovations, founded in Bangkok in 2001 (turnover in 2023 approx. US$ 42 million), is expanding into other Southeast Asian countries as well and can organise regional marketing activities. The company Electronics Extreme also describes itself as a major publisher of online games and works with several foreign partners.

FOREIGN COMPANIES REQUIRE A LICENSE

Market entry can also be organised by the German-Thai Chamber of Commerce in Bangkok. German companies should prepare themselves well and consult a law firm if necessary.

If foreign owners have a majority stake in a company, they must apply for a ‘Foreign Business License’. However, the Thailand Board of Investment (BOI) can grant an exemption from the Foreign Business License. In addition, the BOI exempts companies that produce software, digital platforms or digital content from corporate income tax at a rate of 20 percent for eight years upon application. The BOI can also grant visas and work permits for employees from abroad

SKILLED WORKERS URGENTLY NEEDED

Like the entire software industry, game developers are complaining about a shortage of skilled workers. On the one hand, the demand for developers and designers is likely to increase with the rapid growth of the gaming industry, while on the other, young people are

keen to turn their passion for video games into a career. Universities such as Mahidol, Bangkok University, and Thammasat are therefore increasing their course offerings in the gaming sector.

Foreign training providers such as NobleProg, from Poland, also offer online training courses in gaming. Of course, international training providers must bear in mind that most people in the Kingdom have little or no knowledge of English.

HIGH SALARIES FOR GAMING EXPERTS AND ATHLETES

Companies looking to hire gaming professionals also turn to recruitment agencies. The recruitment agency RECRUITdee reports that experienced developers and designers expect salaries of the equivalent of at least US$ 3,500 per month.

Thailand has also produced hundreds of professional, high-earning e-sports players who are among the best in the world. E-sports tournaments in Bangkok attract thousands of spectators. The teams are also successful at international championships and experienced marketing companies such as the international Ampverse Group branch accompany the professional teams, organise tournaments, sponsorship and advertising.

Trade fairs also provide a good insight into the industry. The ‘Thailand Game Show’ will take place in Bangkok from 18 to 20 October 2024, and the Thai organisers, True Digital Group and Show No Limit, are expecting more than 170,000 visitors to the 17th edition of this popular industry get-together.

Contact details:

Thomas Hundt

South and Southeast Asia Germany Trade & Invest www.gtai.de