Vietnam's game industry shoots for $1B revenues

By Luu Quy   April 1, 2023 | 04:29 pm PT
Vietnam's game industry shoots for $1B revenues
Visitors try the Free Fire game developed by Garena at Vietnam GameVerse event in HCMC, April 1, 2023. Photo by VnExpress
Vietnam's game industry aims to grow its revenues from $600 million to $1 billion in five years, the information ministry said Saturday.

At the Vietnam Game Forum on Saturday in HCMC, part of Vietnam GameVerse 2023, Le Quang Tu Do, head of the Authority of Broadcasting and Electronic Information under the Ministry of Information and Communications, said the ministry aims for Vietnam's game industry to reach a revenue of $1 billion and for the number of game distributors to reach 100-150 businesses, along with an increase of around 400 new startup projects in the field in the next five years.

La Xuan Thang, online game distribution director of VNG, said Vietnam in particular and Southeast Asia in general has the fastest mobile game growth in the world, with a rate of 7.4% a year within the 2022-2025 period, according to statistics from market analysis company Newzoo.

Vietnam has around 54.6 million gamers and generates $507 million in revenue, with great achievements in the field of esport, he added.

"As Vietnam has good and low-cost Internet infrastructure, and a high number of smartphone users, its game industry has lots of potential for growth, for both distributors and developers," he said.

Thai Thanh Liem, CEO of Topebox, said most Vietnamese game studios are investing in Hyper-casual games with simplistic graphics and gameplay as they are easy and quick to develop. But these games mostly generate revenues from advertisements instead of from players themselves, such as through in-app purchases. Liem said Vietnam's game producers can switch the business model to using in-app purchases, which can potentially generate higher revenues.

Nguyen Ngoc Bao, general director of VTC Game, said games have created esport, which can be a spearhead in the digital economy. Bao said esport has a yearly growth rate at 8.1%, and around 640 million people could watch esport matches in 2025.

Challenges and opportunities

The biggest challenge for the game industry is the lack of coordination between game businesses, said Do.

"No coordination means game bsuinesses cannot utilize each other's strengths, leading to a reality that Vietnamese are playing foreign games while games by Vietnamese businesses are played by foreign audiences," he said.

Liem said one reason why Vietnamese people are playing foreign games more than domestic games is that Vietnam's game-making skills are not yet able to satisfy the demands of Vietnamese players, which are pretty high.

Bao said that in order to satisfy high demands by players, there needs to be sufficient workforce in the industry. Vietnam needs around 450,000 people working in IT, according to statistics from 2021, but that number has yet to be reached due to a gap between programmers' skill levels and the demands of businesses.

Social prejudices on gaming have also made recruitment for the gaming industry harder, he added.

Compared to other markets like China and South Korea, Thang said Vietnam's game development skills have yet to match theirs, partly because businesses have not coordinated with one another to exploit each other's strengths. Once businesses band together, major games could be made, he added.

On a proposal for excise taxes on online games, Bao said Vietnamese games would not be able to thrive with excise taxes applied as the industry itself is still in a nascent phase, with many risks.

Dao Viet Anh, startup and community evangelist in Vietnam by Microsoft, said many foreign game developers seek out Vietnamese talents. But that means a choice has to be made: either making small, quick games in Vietnam for quick bucks, or to work for foreign firms with better pay.

Do said there have been universities specializing in IT which proposed to the Ministry of Education and Training to open new courses about game development. Vietnam needs to create opportunities for both gaming personnel and projects to show up, so authorities could see what the gaming industry can achieve.

The Vietnam GameVerse 2023, organized by the Authority of Broadcasting and Electronic Information, VnExpress and the Vietnam Game Development Alliance, takes place from Saturday to Sunday in HCMC. On Saturday alone, the event attracted around 10,000 visitors.

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