It’s no secret that mobile gaming is the best thing that has happened to the gaming industry since sliced bread. A study released earlier this year by esports marketing intelligence company Newzoo says mobile games take up 45 per cent of the global games market; the value of the mobile gaming market also looms large over console and PC gaming worldwide: $68.5bn (€62.3bn) against $47.9bn and $35.7bn respectively.
Southeast Asia’s share of the mobile gaming pie may not be the largest, at just 3.1 per cent in 2019, but it is the fastest-growing, according to Newzoo, hitting $4.6bn in revenues, a 22-per-cent increase over last year. And mobile game revenues thump all other platforms in the region by a landslide of 67 per cent, compared to 24 per cent on PC and 9 per cent on console.
Enter Stadia, a cloud gaming service by Google which is launching in November. Games will be hosted on remote servers, and the gaming visuals will be streamed to connected devices, including smartphones, tablets, computers and televisions.
It is highly likely that Stadia is going to blow the competition away and change the nature of online and mobile gaming, given Google’s advantages in entering the field. The Stadia platform unveiled so far has options to stream on YouTube, as well as options for viewers to play against professional players and streamers.
The US-China trade war has also given Stadia a surprise boost ahead of the Christmas shopping season, because 96 per cent of video game consoles are manufactured in China. Console tariffs will push retail prices up by 25 per cent, which will likely drive sales figures down, according to a study by economic think tank Trade Partnership. This will drive gamers toward Stadia.
But China’s 620 million gamers, who shelled out $37.9bn on online games in 2018, remain off the table for Stadia, as Google and YouTube are blocked in the country and have not been in the Chinese market for over a decade.
In their absence, Tencent, China’s biggest social media operator and games publisher, has risen to become the kingpin of mobile gaming in Asia. The organisation is also looking for foreign markets to exploit, with reports that up to 40 per cent of their recent investment deals are outside of China. Part of this is also a result of the Chinese government’s nine-month licensing freeze in 2018, leading to Chinese game developers to look to publish their games in less-controlled markets elsewhere.
Key alliances have already been made by Tencent in Southeast Asia, with the company partnering with Singapore-based gaming and e-commerce company Sea to publish its game titles in the region. Sea operates Southeast Asia’s biggest gaming platform with 161 million active users reported in the second quarter of 2018.
Tencent launched its own cloud gaming platform in August at Chinajoy, China’s largest gaming convention. Interestingly, it is not planning to launch the service in China, instead eyeing Southeast Asia.
Tencent Cloud’s product manager Li Guolong plans to partner with Chinese set-top boxes to promote the new platform and linked games in Southeast Asia, saying consumers in the region that cannot afford consoles – which retail around $300 – will find the prices of cheap set-top boxes priced as low as $30 more affordable.
Tencent also intends to leverage its cloud gaming technology into live-streaming broadcasts, as it is already a major investor of China’s top two Twitch-like streaming platforms, Huya and Doyu. Huya, in particular, has developed a separate overseas brand called Nimo TV, a live-streaming platform which boasts impressive engagement rates across Asia, which Tencent will certainly leverage on.
“Going overseas is a focus for us this year,” Li said at Chinajoy. “Look at Nimo TV: in Southeast Asia it does esports streaming. Its penetration rate is high in many places, and we already provide our video/audio streaming solutions to them.”
Tencent v Google; Stadia v Tencent Cloud; YouTube v Nimo TV. The chess pieces are coming together in Southeast Asia, and the result is likely to shape the future of esports and gaming in the near future.