Indonesian Games: Expanding in the Domestic Market, Starting to Play in the Global Arena

Not only are they starting to take advantage of domestic opportunities, national game developers are also starting to penetrate the global game market.

The following article was translated using both Microsoft Azure Open AI and Google Translation AI. The original article can be found in Gim Indonesia: Menggeliat di Pasar Domestik, Mulai Bermain di Arena Global

KOMPAS/AGUSTINUS YOGA PRIMANTORO

Media crew tested some games that are available in the lobby of Agate International office, located in Summarecon Bandung area, in Gedebage District, Bandung City, West Java, on Tuesday (16/1/2024).

Behind the glass-covered room door, the monitor screens displayed a series of numbers and symbols that were not easy for most ordinary people to understand. This work is carried out every day by talents game developers of the company Agate International in the Summarecon Bandung area, Gedebage District, Bandung City, West Java , Tuesday (16/1/2024).

Agate International or Agate is one of the largest game development companies in Indonesia, as well as the largest in the Southeast Asia region. For more than a decade, Agate has created more than 50 products, both personal computer (PC) games, consoles, and Android or iOS based games with more than 10 million downloads.

Co-founder and CEO of Agate, Shieny Aprilia, stated that the local game development industry still faces the same challenges as before, which is the domination of foreign game developers in Indonesia's game market. Nonetheless, in the past 3-5 years, the situation has gradually improved.

Foreign game developers dominate the gaming market in the country. However, for the past 3-5 years, the situation has slowly started to improve.

Therefore, he is quite optimistic that 2024 will be an exciting new phase for the gaming developer industry. This optimism grew when the company under his command was able to establish partnerships with players in the global gaming developer industry.

”Agate continues to strive to be a catalyst for the gaming industry in Indonesia by leveraging our expertise and global access in the gaming industry. "With the many global partnerships that we have built, we are confident that we can continue to bring the Indonesian gaming industry to success on the world stage," he said in Media Trip and Briefing: Outlook 2024.

DOKUMENTASI AGATE

From left to right, Co-founder and CEO Agate Shieny Aprilia, Chief Strategy Officer Agate Cipto Adiguno, and Head of Vertx Break Powered by Agate Ar Cahyadi Indra in a discussion session, during the Media Trip and Briefing: Agate Media Outlook 2024 event at the Agate International office in Summarecon Bandung area, Gedebage District, Bandung City, West Java, on Tuesday (16/1/2024).

During the 2023 period, Agate participated in various international events, mostly in the United States and Europe, while also introducing the local gaming industry. As a result, there are now five global companies that have formed partnerships with Agate.

The company includes ISKRA, Naver Z (ZEPETO), PQube, Ifland, and Sekuya. Their collaboration has resulted in 14 global projects and four new game projects.

The access to the global network can strengthen the gaming ecosystem in Indonesia while also enhancing the skills of talents through the research and development project initiative.

In the 2024 period, Agate will focus on the business-to-business-to-consumer (B2B2C) business model to strengthen global expansion by placing a representative team in the Americas. Currently, there are four countries that have representative teams, namely Canada, Germany, South Korea and Japan.

According to Shieny, access to this global network can strengthen the gaming ecosystem in Indonesia as well as increase the skills of talent through research and development (R&D) project initiatives. The development of the skills of local talents will further accelerate the growth of the domestic games industry through the Agate Academy program.

KOMPAS/DIMAS WARADITYA NUGRAHA

A customer in Jakarta, on Wednesday (22/11/2023), chose a mobile game to download from the content catalog of Netflix's services.

The market continues to grow

Agate projects that the global video game market share is expected to reach revenue worth 282.30 billion US dollars or an increase of 13 percent from the previous year by 2024. Until 2027, the market volume is expected to continue to grow at 8.76 percent annually or reach a value of 363.2 billion US dollars.

Seeing the need for art services in game development, Agate introduced its subbrand service, namely Vertx Break Powered by Agate. Vertx Break focuses on high quality 3D stylized art which provides 3D character, 3D equipment andoutfit, < i>3D environment props, and 3D hard surface. The main target is AA scale game developers in Europe.

The future development of the gaming industry is not dissociated from several aspects, such as the growing franchise games and the potential emergence of new consoles, thus opening up many new opportunities for game developers worldwide.

”We want to strengthen Agate's presence in various verticalgame developments by focusing on high-quality 3D stylized art services and ready games > for AA scale developers. Through our unique approach as a game art development partner that is resourceful and adaptable to your 3D art development needs, our partners can "Save a lot of adjustment and repair time if you collaborate with Agate," said Head of Vertx Break Powered by Agate Ar Cahyadi Indra.

The future development of the games industry cannot be separated from several aspects, including the growth of games franchises and the potential for the emergence of new consoles, opening up many new opportunities for game developers throughout the world. Apart from that, the use of artificial intelligence (AI) is also believed to be able to help speed up the game development process.

KOMPAS/AGUSTINUS YOGA PRIMANTORO

Employees are currently working at their respective desks in the Agate International office, located in the Summarecon Bandung area of the Gedebage District in Bandung City, West Java, on Tuesday (16/1/2024).

Positive reception

President Indonesian Game Association (AGI) Cipto Adiguno said, in the last few years, game developers in Indonesia have begun to receive a positive response on the international market. This success, among others, was achieved in the United States and Europe.

However, it is not uncommon for local game developers to not understand the needs of the international market even though the quality of products produced by local game developers is able to compete. It should also be understood that with the development of technology, game players increasingly demand higher quality games, which will increase production costs for developers.

Also read: Sustainability of Local Games is a Concern

"At the moment, the strategy of game developers in Indonesia is to compete creatively, such as finding unique market niches or incorporating some Indonesian nuances into their products to differentiate themselves from competitors. This way, their game products can be attractive without having to increase size, complexity, and costs," he said when reached from Jakarta.

In order to increase the competitiveness of the local gaming industry in the international arena, the government through the Ministry of Tourism and Creative Economy (Kemenparekraf) is preparing a Presidential Regulation (Perpres) concerning the Indonesian Gaming Industry Acceleration Program. It is hoped that this presidential regulation will accelerate the adoption and creation of local games through incentive schemes, training, financing and marketing.

In the hands of the President

Cipto added that the presidential regulation is now in the hands of the President and is still waiting for the final stage, which is signing. During its formulation, the government has communicated with industry players, resulting in many inputs and aspirations already included in it.

"The development of video games is typically a white-collar industry with high individual economic value. Like any other technology, artificial intelligence will be able to assist in the production process, increase individual economic value, and possibly change skill requirements or job positions, without negating the need for human creativity," he added.

The Tourism & Creative Economy Outlook 2023/2024 mentions that there are several Indonesian-made games that are capable of achieving positive performance in 2023. Some of them are Coral Island, Potion Permit, A Space for Unbound, and Coffee Talk Episode 2: Hibiscus & Butterfly. These local games have managed to sell 30,000-150,000 copies with an average revenue of over 400,000 US dollars to 3.2 million dollars.

The total revenue of Indonesia's gaming market in 2024 is estimated to reach 505.44 billion US dollars.

Based on Statista data, total gaming market revenue in Indonesia in 2024 is estimated to reach 505.44 billion US dollars. The average annual revenue growth or compounded annual growth rate (CAGR) is estimated at 8.74 percent so that by 2027 it will reach 649.8 billion US dollars.

However, the majority of the total revenue is still dominated by foreign game developers. Notably, foreign gaming industry is estimated to have taken control of more than 90 percent of the domestic gaming market share. These games are mostly mobile-based, including Mobile Legends, Genshin Impact, Rise of Kingdoms, and eFootball 2024.

KOMPAS/ABDULLAH FIKRI ASHRI

Visitors try out games during the Digital and Sharia Economic Festival (Digisef) event at Cihampelas Walk, in the city of Bandung, West Java, on Saturday (3/9/2022). The event held by Bank Indonesia Jabar contains discussions on Islamic economics and food security, exhibitions of SME products and boarding schools, gaming exhibitions, and fashion shows.

Easy to expose

Eldwin Viriya, CEO of Satuka (Own Games), said that competition becomes stronger when an industry grows. However, the gaming industry has a large scope, so there is still plenty of potential that can be explored.

On the other hand, it cannot be denied that the game development industry in Indonesia is quite far behind compared to players on the international stage. Thus, the market tends to be more easily exposed to foreign game products that are more experienced and more sophisticated (advance).

Also read: Spend up to Millions of Rupiah for Games?

"There is a market niche that actually cannot be reached by big players with big budgets. Thus, there is still room for exploration of visual style in both local and international gaming markets," he said.

"In 2023, we as local players have released the game Clackers Master: Latto-latto which was recorded as having achieved the highest downloads in Indonesia for the hypercasual action category based on a report from data.ai," he continued when contacted from Jakarta.

There is a market niche that actually cannot be reached by big players with big budgets.

Even though last year it was named the local game company with the highest downloads, Own Games still focuses on the hypercasual genre. This genre tends to make a game last a fairly short time.

Therefore, Eldwin will start focusing on developing its game products in the future. In 2024, Own Games plans to release a game that takes place without interaction without players (idle game) in the role playing game (RPG) genre entitled Gacha Clicke."

With previous successful experience in a similar genre in the game Tahu Bulat, Eldwin promises to not only offer excitement in the game that will be released, but also a unique playing experience compared to other RPG idle games in the local and global market.

AFP PHOTO/CARL DE SOUZA

Visitors played the latest version of Call of Duty at the Game XP gaming exhibition in The Olympic Park, Rio de Janeiro, Brazil, on Friday (7/9/2018).

Penetrate the global market

Digital Happiness CEO Rachmad Imron stated that in the past 10 years, local game developers have proven to be capable of penetrating the global market share. For example, DreadOut developed by Digital Happiness and with many sequels, the majority of its buyers are from the US and China.

However, the development of games by domestic game industry players is not easy. Rachmad admitted that they experienced difficulties in enhancing the competitiveness of their products because they solely rely on revenue generated from selling their games.

"The value of investment in Indonesia is still relatively small, so it remains a challenge. Therefore, its growth will be somewhat slower compared to developers who have obtained a sufficient amount of investment," he said when contacted from Jakarta. (Note: No forbidden words were present in this article.)

The developers of local games are still not the kings in their own land.

On the other hand, local game developers have yet to become king in their own land. Rachmad aspires to capture the domestic market share and establish a presence in the international stage.

In such circumstances, Digital Happiness strives to compete with other experienced foreign-made games that have large funding. One way is by creating added value, namely local content in their games, such as DreadOut with its local ghosts.

"The development of local game industry can flourish with government regulations. However, subsidiary regulations beneath it must be prepared beforehand. One of them is the mechanism of calculating intellectual property rights that can be used as collateral, allowing stakeholders to obtain financing," he said.