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October 23, 2019
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The Mercuric Rise of the Gaming Market in Indonesia

While the growth of the Indonesian gaming industry has taken on billion-dollar proportions; domestic industry players have made a very little contribution to its mercuric rise.

On a global scale; Indonesia claims 17th position with its gaming market, which commands an estimated US$1.1 billion-dollar revenue as recorded in January 2019. Newzoo research puts Indonesia in the top spot among the gaming markets in Southeast Asia. Thailand and Malaysia come in at 2nd and 3rd position with revenues of $667 million and 633 million respectively.

The gaming industry on the whole generates an estimated $100 billion annually. China makes the largest contribution to global gaming revenues with $34.4 billion and the United States comes in the second with $31.5 billion. These figures are derived from Newzoo data.

The Indonesian Gaming Association (AGI) put out a statement claiming that the domestic gaming market grows at an annual rate of 37%; which substantially exceeds the growth of the gaming market in other Southeast Asian countries.

The Word from Industry Insiders

In recent times, CEO of the Indonesian game developer and AGI secretary- general told the press “Ideally, our own industry should be growing two or three times more than that number,” as reported by the Jakarta Post.

According to Joddy Hernady, who serves as executive vice president at Telkom, the Indonesian telecommunications major, record revenues were made for a single game in Indonesia that exceeded those of any movie or music album ever sold in the country.

This fact is proven by the recent revenues of the Indonesian film Warkop DKI Reborn and the best-selling Indonesian music album Bintang di Surga; which made revenues of $17 million and $10 million respectively, while the multiplayer online battle simulation game, Mobile Legends, brought in revenues of over $120 million. The profits went to Moonton, the Chinese developer of Mobile Legends.

At the recent Telkom Digisummit in 2019, Joddy Hernady said “Games nowadays have become a staple and inseparable part of our lifestyle, and yet our own gaming market share has been decreasing compared to 10 years ago”.

The Local Gaming Industry Lags Behind

While foreign games flood the Indonesian market, Telkom records show that the domestic gaming industry merely commands 0.4% the market share in the country.

On this sore point, Joddy Hernady added “The main challenges for our local developers lie in the lack of investments and the shortage of game-developing talents that lead to a stagnating number of local gaming companies”.

While Indonesia’s digital economy is expected to triple by 2025 according to the ‘e-Conomy Southeast’ annual study conducted by Google and Temasek, domestic game development is not expected to have a significant contribution. According to this study; e-commerce will have a contribution of 53%, online travel will contribute 25%, carpool and ride services will contribute 14% and online media will put in 8% into Indonesia’s digital economy growth. It is easy to see how the domestic gaming industry is lagging behind. However, growth efforts are on.

Moving Ahead

The gaming industry in Indonesia is keen on making progress. Telkom recently launched Oolean, a cloud-based gaming hub, in partnership with multiple domestic game developers. Oolean is attempting to bridge the market gap by serving as a platform providing players access to a range of games, gaming vouchers and information that is relevant to the various games available on this platform.

For the express purpose of facilitating domestic game development, Telkom is all set to launch Indigo Games, which will serve as a point of incubation for Oolean and its development, including capital needs.

“Our final goal is to come up with a flagship game that can go international […] We have recruited Indonesian talents who have worked in major developers like Namco, Bandai and Supercell,” said Mr. Hernady.

Arief Agate, a major domestic game developer, is contributing significantly to the development of Oolean. Agate has added in excess of 20 games in varying categories to the cloud-based gaming hub Oolean.

On the subject of his partnership with Telkom for the purpose of developing Oolean, Mr. Agate stated, “Telkom is going to provide us financial support via Indigo Games that will be supported by Oolean,”. He added, “We hope that this partnership will provide long-term and more significant impacts to the Indonesian gaming industry.”

Game Development with an Eye on the Nation’s Digital Economy

At the recent Digisummit, David Bangun, chief strategy officer for Telkom, shed light on the growth connection between domestic gaming development and Indonesia’s digital economy.

Mr. Bangun also made references to Temasik and Google research that puts Indonesia i

While the growth of the Indonesian gaming industry has taken on billion-dollar proportions; domestic industry players have made a very little contribution to its mercuric rise.

On a global scale; Indonesia claims 17th position with its gaming market, which commands an estimated US$1.1 billion-dollar revenue as recorded in January 2019. Newzoo research puts Indonesia in the top spot among the gaming markets in Southeast Asia. Thailand and Malaysia come in at 2nd and 3rd position with revenues of $667 million and 633 million respectively.

The gaming industry on the whole generates an estimated $100 billion annually. China makes the largest contribution to global gaming revenues with $34.4 billion and the United States comes in the second with $31.5 billion. These figures are derived from Newzoo data.

The Indonesian Gaming Association (AGI) put out a statement claiming that the domestic gaming market grows at an annual rate of 37%; which substantially exceeds the growth of the gaming market in other Southeast Asian countries.

The Word from Industry Insiders

In recent times, CEO of the Indonesian game developer and AGI secretary- general told the press “Ideally, our own industry should be growing two or three times more than that number,” as reported by the Jakarta Post.

According to Joddy Hernady, who serves as executive vice president at Telkom, the Indonesian telecommunications major, record revenues were made for a single game in Indonesia that exceeded those of any movie or music album ever sold in the country.

This fact is proven by the recent revenues of the Indonesian film Warkop DKI Reborn and the best-selling Indonesian music album Bintang di Surga; which made revenues of $17 million and $10 million respectively, while the multiplayer online battle simulation game, Mobile Legends, brought in revenues of over $120 million. The profits went to Moonton, the Chinese developer of Mobile Legends.

At the recent Telkom Digisummit in 2019, Joddy Hernady said “Games nowadays have become a staple and inseparable part of our lifestyle, and yet our own gaming market share has been decreasing compared to 10 years ago”.

The Local Gaming Industry Lags Behind

While foreign games flood the Indonesian market, Telkom records show that the domestic gaming industry merely commands 0.4% the market share in the country.

On this sore point, Joddy Hernady added “The main challenges for our local developers lie in the lack of investments and the shortage of game-developing talents that lead to a stagnating number of local gaming companies”.

While Indonesia’s digital economy is expected to triple by 2025 according to the ‘e-Conomy Southeast’ annual study conducted by Google and Temasek, domestic game development is not expected to have a significant contribution. According to this study; e-commerce will have a contribution of 53%, online travel will contribute 25%, carpool and ride services will contribute 14% and online media will put in 8% into Indonesia’s digital economy growth. It is easy to see how the domestic gaming industry is lagging behind. However, growth efforts are on.

Moving Ahead

The gaming industry in Indonesia is keen on making progress. Telkom recently launched Oolean, a cloud-based gaming hub, in partnership with multiple domestic game developers. Oolean is attempting to bridge the market gap by serving as a platform providing players access to a range of games, gaming vouchers and information that is relevant to the various games available on this platform.

For the express purpose of facilitating domestic game development, Telkom is all set to launch Indigo Games, which will serve as a point of incubation for Oolean and its development, including capital needs.

“Our final goal is to come up with a flagship game that can go international […] We have recruited Indonesian talents who have worked in major developers like Namco, Bandai and Supercell,” said Mr. Hernady.

Arief Agate, a major domestic game developer, is contributing significantly to the development of Oolean. Agate has added in excess of 20 games in varying categories to the cloud-based gaming hub Oolean.

On the subject of his partnership with Telkom for the purpose of developing Oolean, Mr. Agate stated, “Telkom is going to provide us financial support via Indigo Games that will be supported by Oolean,”. He added, “We hope that this partnership will provide long-term and more significant impacts to the Indonesian gaming industry.”

Game Development with an Eye on the Nation’s Digital Economy

At the recent Digisummit, David Bangun, chief strategy officer for Telkom, shed light on the growth connection between domestic gaming development and Indonesia’s digital economy.

Mr. Bangun also made references to Temasik and Google research that puts Indonesia in the third position among South Asia’s largest digital economies, accounting for 2.3% of Indonesia’s GDP, a little lesser than Singapore’s 3.3% and Vietnam’s 4.4% GDP.

The same ‘e-Conomy Southeast’ study also indicates that Indonesia is poised to take the lead over other Southeast Asian countries on the digital economy fronts. Indonesia’s digital economy is expected to triple from $27 billion in 2018 to $100 billion in 2025.

Additionally, Mr. Bangun laid stress on this significant increase in the value of the Indonesia’s digital economy in relation to Indonesia’s GDP at the recent Digisummit.

He laid stress on the importance of the contribution of companies like Telkom towards building infrastructure that is suited to meet the needs of a growing digital economy. According to Mr. Bangun’s statements at the Digisummit, Telkom is committed to facilitating high quality digital services with the aim of perfecting the user experiences.

n the third position among South Asia’s largest digital economies, accounting for 2.3% of Indonesia’s GDP, a little lesser than Singapore’s 3.3% and Vietnam’s 4.4% GDP.

The same ‘e-Conomy Southeast’ study also indicates that Indonesia is poised to take the lead over other Southeast Asian countries on the digital economy fronts. Indonesia’s digital economy is expected to triple from $27 billion in 2018 to $100 billion in 2025.

Additionally, Mr. Bangun laid stress on this significant increase in the value of the Indonesia’s digital economy in relation to Indonesia’s GDP at the recent Digisummit.

He laid stress on the importance of the contribution of companies like Telkom towards building infrastructure that is suited to meet the needs of a growing digital economy. According to Mr. Bangun’s statements at the Digisummit, Telkom is committed to facilitating high quality digital services with the aim of perfecting the user experiences.

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