Southeast Asia’s gaming industry is on the rise. Between 2020 and 2025, it is expected to grow at a CAGR of 8.5 per cent, running counter to how the ongoing COVID-19 pandemic has disrupted many traditional sports sectors.
The gaming industry, particularly e-sports, has instead thrived, as illustrated by The Asian Electronic Sports Federation (AESF) bringing back e-sports as a medal sporting event at the 2021 SEA Games in Vietnam (which has since been postponed), following its debut in 2019 – hence illustrating the commitment by major stakeholders to back e-sports’ inclusion in a major sporting event.
This mainstreaming of e-sports in Southeast Asia had been gaining strong momentum in the years prior. For one, it has been underpinned by the region’s growing middle-class population, which had been seeing increased spending power, raising more disposable income that can be spent on leisurely activities, including playing video games.
Concurrently, Southeast Asia also continues to witness a growing internet penetration, which has enabled more users to engage in online gaming and spectatorship.
While Southeast Asia’s e-sports sector is still nascent, there are several factors to support its continued rise – especially when it gains a stronger foothold in the region’s emerging markets.
E-sports’ economic importance in Southeast Asia
While e-sports was very much the domain of gaming enthusiasts and hobbyists, it has since expanded to become a very promising sector in terms of earnings and industry development.
Especially during the pandemic, more people (namely those from younger generations) are working from home and crave more forms of indoor entertainment.
E-sports can meet that demand by offering content via live stream events or online video games, which contributes to economic earnings such as sales of gaming devices.
It also represents an opportunity for companies and investors to heavily back the industry – especially as more are exploring the implementation of disruptive experiences, given the eventual availability of 5G and the proliferation of more advanced technologies like AI and digital twins.
Also Read: The changing face of gamers and what it means for e-sports startups in SEA
This can encourage the growth of new forms of business opportunities for technology entrepreneurs to see how they can proliferate industry advancements to grow the market further.
Skilled technology professionals will also be key to the industry’s rise, namely in terms of gaming technology development, where Singapore particularly seeks to lean on to meet its aspirations of being Southeast Asia’s leading hub for e-sports.
Outside of its ecosystem, the e-sports sector will also help stimulate the growth of service sectors such as events management – creating opportunities for more live stream events to be conducted over the next decade, at least.
Singapore’s annual Formula 1 race is one instance; its organisers have developed the F1 e-sports Pro Series, which has created an ecosystem of opportunities for Singapore’s various hospitality and tourism industry players.
Regional growth challenges
Despite its inherently strong potential, Southeast Asia’s e-sports industry still faces challenges for it to grow more actively in the region. More advanced markets such as Singapore have been better positioned to support startups and companies related to the e-sports ecosystem and have organised online gaming tournaments more regularly as compared to more emerging markets such as Vietnam and Cambodia.
This is largely due to greater industry maturity and available resources (both from the public and private sectors) in the former compared to the latter two.
The lack of recognition for professional gaming as an occupation by government bodies also poses a challenge, particularly concerning international tournaments, as gamers may face issues procuring visas required to stay the course of a tournament or attend training camps.
This could then lead to low governance– creating a grey area means that raises risks to the wider ecosystem, such as cheating, match-fixing, and illegal betting.
Another challenge is the region itself. Being highly heterogeneous, key discrepancies such as the availability of payment models differ between the region’s various markets.
Not all countries have more sophisticated electronic payment methods; for instance, Singapore has options such as ApplePay and Samsung Pay, whereas Indonesia is slowly integrating a more secure and easily accessible ‘UniPin’ cashless online payment system.
Contributing to e-sports’ growth
While e-sports face many obstacles in Southeast Asia, many industry actors play an important part in influencing its growth. These include game developers, competition organizers, and even the players themselves.
For example, “Hawaii” Yee Xiao Hao began playing the online game Dota with just friends in Brunei, but later transformed his hobby into a career.
Since then, he has been driving the development of e-sports as a whole in his country for a new generation of gamers, such as his co-founding of the e-sports Association of Brunei.
Meanwhile, game developers, bring specific industry expertise that can add value to a game’s ecosystem, as well as directly organising competitions.
For instance, Singapore’s Riot Games organised the League of Legends World Championships, while Garena developed games such as Free Fire as they realized that mobile games are easier to access, leading to many games optimized for mobile play too, such as FIFA and Call of Duty.
Sponsorships and investments are also key to e-sports’ future. This is evident in teams participating in competitions that need various resources, of which training is among the most important.
Relatedly, organisers also play a crucial part, as seen in the partnership by ONE Esports and Toyota Motors Asia Pacific for an online Gran Turismo tournament series.
Still, the growth e-sports has been experiencing would not have been possible without an established governing body to oversee the sport, including responsibilities over regulations and promotion. To date, only some organizations can be classified as governing bodies for e-sports, such as the International Esports Federation (IeSF).
Also Read: The changing face of gamers and what it means for e-sports startups in SEA
Nevertheless, some Southeast Asian governments are taking more direct approaches to nurture the industry, namely by organising and collaborating talent management in e-sports, as seen via bodies like the Singapore Games Association (SGGA) and the e-sports National Association of the Philippines (eSNAP).
With greater government support and accreditation, there can be seen a shift in attitudes towards e-sports which will be important for its future growth and mainstreaming.
Levelling up e-sports in Southeast Asia
Despite regional challenges, Southeast Asia’s e-sports industry has the prerequisites needed to even grow further, with participation in multi-sports tournaments being one of the major steps in gaining global recognition.
Recently, the Global eSports Federation (GEF) has even announced the first three editions of the global e-sports games, with the first to take place in Singapore in 2021.
While countries and their governments are taking measures to ensure the sport provides more mass appeal, its importance to the region is becoming more prominent, given that will present new sources of national revenue and growth, while stimulating auxiliary benefits such as helping youth development and employment.
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