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It has been estimated that APAC would be home to 1.5 billion gamers in 2020, accounting for 55% of the global gaming population, and worth over $78 billion in revenue. Suffice to say, these projections will now be easily surpassed given the pandemic’s significant impact on gaming behavior, usage and spending, as experienced and new gamers alike immersed themselves in virtual worlds while the real world has been off-limits.
Esports, especially mobile esports, has continued to be a growth driver for gaming in APAC. In China, esports has become such a mainstream industry that it has been added into some postgraduate and vocational programs. It also became a medal sport at the 2019 Southeast Asian Games, further proving its cultural relevance.
Another development in gaming has been the expansion of the gaming audience to include more women and more players over 45 so that the profile of the gaming audience is looking more like the general population. Some APAC game developers have started to create new games aimed at female gamers and hope to expand the esports audience by cultivating professional female esports players and launching esports tournaments for mobile titles that are popular among women.
Game development in Asia has been traditionally dominated by Japan, with Nintendo, Sony, and Sega Games leading the pack. Chinese tech giants have since joined the fray with Tencent and Netease establishing themselves as top game developers. In fact, Tencent is now the world’s largest gaming company in terms of revenue and continues to push forward on its acquisition of other gaming companies, adding to its already blue chip portfolio that includes Riot Games and Epic Games.
For a region that is “mobile-first” with hyper-connected populations, the ability to play almost any game on any device is a significant selling point and will help bridge the console and mobile gaming markets.
Still, these heavyweights will be challenged by new entrants such as Alibaba and Bytedance as they have significantly ramped up investments and game development. Alibaba is already seeing results with Romance of the Three Kingdoms Strategy Edition whereas Bytedance, which owns TikTok, will become a notable player in the APAC games market in the coming few years as it begins to publish games from third-party developers and internal teams, and leverages its success in the short video space to acquire users.
With games that can be played across multiple platforms having a higher chance of success, many of these developers will be expected to introduce titles that run across PC, Console, Mobile, and Cloud with cross-platform play enabled.
Perhaps the most anticipated development is the advent of 5G and cloud gaming. Technology companies across the board are betting big on cloud-based gaming — Microsoft has xCloud with Xbox Game Pass, Sony has PlayStation Now, Google has Stadia, Tencent has START, and even Amazon is launching its own offering with the Amazon Luna.
One of the main advantages of cloud gaming is the ability to play without owning expensive hardware. For a region that is “mobile-first” with hyper-connected populations, the ability to play almost any game on any device is a significant selling point and will help bridge the console and mobile gaming markets. Mobile and telecommunication companies in APAC have been quick to recognize this.
Brands should anticipate more consumers flocking to 3D virtual experiences powered by game development technology and tools.
Huawei has partnered with NetEase to offer a cloud gaming service, as have Ubitus together with China Mobile and Singtel, Chunghwa Telecom with GameStream, AntStream with Starhub, and Microsoft with SK Telecom. The close relationship between telecommunications and broadcast television in APAC is another factor that could propel game-streaming services in this region to achieve greater market penetration than in western countries.
One of the basic building blocks for metaverses — a collective virtual shared space created by the convergence of virtually enhanced physical reality and physically persistent virtual space — is the 5G network. With mobile games powering the adoption of 5G in APAC, this next evolution of the digital infrastructure could come upon the APAC region earlier than expected. As Epic Games, the maker of Fortnite has already shown, in-game virtual venues have become a convergent point for online communities, pop culture icons, and entertainment experiences.
The blurring of lines between gaming and entertainment, and between the virtual and physical world, is not a new phenomenon, but they are happening on new platforms developed by gaming companies.
The launch of Nintendo’s Animal Crossing: New Horizons last year provided a similar platform for brands in Japan to connect with consumers. Shiseido Ginza, for instance, has used the game to film a special project involving real Japanese players in simulated locations around Japan. The finished short “Camellia” movie garnered 1.3 million views on Twitter.
Moreover, real-world applications of gaming technology is also being tested with the creation of the “digital twin” — a 3D model of a physical entity with the 3D model’s animation driven by the real entity’s live data. A great example is the creation of a digital twin for the city of Adelaide in Australia for the purpose of smart city planning using TwinMotion, a real-time immersive 3D architectural tool powered by Epic’s Unreal Engine.
The blurring of lines between gaming and entertainment, and between the virtual and physical world, is not a new phenomenon, but they are happening on new platforms developed by gaming companies. Brands should anticipate more consumers flocking to 3D virtual experiences powered by game development technology and tools.
Aside from putting in place a strategy to target and reach the significant pool of APAC gamers as an audience, marketers should also start thinking about how they can shift from being mobile or social first to experience-first so that their brands can begin to establish a presence and connect with consumers in these immersive spaces.
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