Esports Is Taking Off In Southeast Asia
In recent years, the popularity of esports has exploded in Southeast Asia, leaving local and international companies seeking ways to tap into the market. According to research by Newzoo, Southeast Asia is the industry’s fastest-growing region, with more than 9.5 million esports enthusiasts, with 2.8 million residing in Vietnam and 2 million in Indonesia. That number is reportedly set to double by 2019.
Part of the gaming boom stems from last year's announcement that esports would become a competitive sport at the 2022 Asian games. In some of the region's biggest hubs for gamers, like Malaysia and Singapore, esports academies have been established to teach strategy and technique to competitors.
It’s not just the esports culture that’s taking off--revenue from PC games alone was projected to reach $1.1 billion by the end of last year, and then surpass $2 billion in 2021, according to a November report from market research firm Niko. The same report said revenue from mobile games surpassed that of PC games this year and will continue to grow.
"We have seen a lot more positive acceptance and growth," said Nok Anulomsombut, CEO of gaming and ecommerce company Sea Group's Thailand branch. "It's definitely picking up in Thailand, and people have already embraced esports as a sport. Now this year, we see that a lot of companies are trying to engage with the esports industry."
Akarawat Wangsawat, coach for Ascension Gaming, a Thai League of Legends team, said he's seen the number of local tournaments and competitions increase dramatically in the past year.
"The biggest opportunity for competitors is that players get exposed to another larger audience globally," Wangsawat said.
Ascension will compete for hundreds of thousands of dollars in prizes at the Garena World competition this weekend, an international competition that also features local gamers, hosted by Singapore's major gaming and ecommerce company, Sea.
The success of Sea's gaming platform, Garena, expanded the user base of its digital financial services app, AirPay, via purchases from the digital entertainment business, according to the company's IPO prospectus. Sea also gained crucial backing from Tencent Holdings, which has invested in the company at every stage and allowed Garena to license its games for the Southeast Asia market, according to Alan Hellawell, Sea Group's chief strategy officer. Locally, major companies including Thai telecom operator Truemove H have sponsored gaming leagues, he said.
As the esports industry has grown, Sea became the first Southeast Asian tech company to list on the New York Stock Exchange, and though it stumbled early in the day, the company raised $884 million in its listing, with shares up 8% at the end of its first day in October.
At the moment, internationally-known multiplayer games like League of Legends and Dota 2 are the most profitable and popular across countries, Hellawell said, but the local games gain the strongest allegiance from their regional players.
"We feel very strongly...if you're going to create a game that transcends years and age groups, you're generally suited to a localized company,” he said.
For their Thai markets, the company integrated 25 Thai football players into the EA Games’ Fifa Online, and added Thai-style tuk-tuks into their own self-developed battle royale game Free Fire, both of which are highly popular among both Thailand’s and other country’s players, Anulomsombut said.
Though some Southeast Asian gamers prefer localized content in their language, the region's players have a growing interest in games from other countries and competing regionally and internationally, said Drew Holt-Kentwell, founder of esports marketing company Catalyst Esports Solutions.
"Some markets are restricted by language and tend to be insular as far as their esports communities go–Thailand and the Philippines, for example–but there is a growing desire to consume global content that developers and tournament organizers are putting out," he says.
"Companies are now beginning to see the true potential of this region, given the rollout of new game platforms, new titles, and a rapidly growing audience," Holt-Kentwell said. "Current esports audiences are generally young, easily engaged, and ready to spend, and
companies are just now starting to realize that this is a ripe and juicy market for their products."