Southeast Asia is Mobile’s Misunderstood Market

As part of Unite Europe 2017, Jonathon Sze, COO & co-founder, CloudMoolah, gave a talk on his top tips for monetising and publishing mobile games across Southeast Asia. The region offers huge potential, but the rules of success are quite different.

“The Asia Pacific market is easily one of the fastest growing ones,” Sze offers, accepting his point is an obvious one. “I think if you look at all the reports that are coming up – ones from the mailing lists of Newzoo and IDG or IDC – you get all this data, and everyone is saying ‘Asia-Pac is huge’. The SEA region is growing rapidly, with mobile revenues expected to reach $1.4 billion in 2017, and “it is a market you cannot afford to ignore.”

Indeed, according to Sze’s figures pulled from Newzoo, the Asia Pacific region makes up around 47% of the global mobile gaming market, with revenues of $46.6 billion through 2016. However, the COO believes it is worth considering Southeast Asia specifically as a somewhat distinct opportunity therein.

In areas of Southeast Asia, mobile gamers often play publically, and in large groups.

That’s not to say they necessarily share a clan in live games, or tackle multiplayer experiences together. They just happen to hang out while they enjoy the same game. And the leaders of these cliques hold powerful sway over the spending habits of surprisingly large audiences.

“In Southeast Asia mobile gamers move around in hordes,” confirms Jonathan Sze. “They like to stick around together in these hordes, and there are leaders. There’s a spiritual leader, who is usually the guy with the biggest wallet. He buys a lot for his guys. It’s almost like if you are in a gang. But it is just that these are game gangs, and they move around [between games]. We have these game leaders and community leaders coming to us and asking ‘can you give me a special offer on the top ups?’.”

Sze would initially ask a very reasonable question. “Why should I?”

“Because if not, I’ll just go to another game, and I’ll take my 100 followers with me,” would be the response.

Sze makes a case for an oft-uttered rule of thumb for games development and publishing. ‘Look after your community’ is the gist of it. But Sze is really making a broader point about cultural difference’s impact on game marketing, and the misunderstood opportunity for mobile game companies in Southeast Asia.

Player Behaviours Are Significantly Different in Southeast Asia, With Mobile Gamers Often Hanging Out Like Gangs (Image Credit: CloudMoolah)

Of course, the infamous ‘East-West divide’ has long been a talking point for the games industry. For decades, broadly speaking, there has been a distinction drawn with regard to the style and design of games from each region.

And when mobile gaming boomed, it was generally accepted that the divide between East and West had only galvanised. Cue much discussion, conference stage time and column inches devoted to ‘the rule of succeeding’ on the other side.

That approach, Sze argues, is too binary, too polarising, and too narrow-minded. Southeast Asia, he is convinced, offers a tremendous commercial opportunity, and one quite distinct from the area’s Asia Pacific neighbours.

“There is $1 billion of revenue there now,” he asserts. “We cannot afford to lose this opportunity. Just taking 0.1% of that will keep your studio alive. This is one key reason why, that for whatever effort you put into this market, you must do it wisely.”

Doing things wisely means grasping what it is that makes Southeast Asia distinct in the region. Together the 11 sovereign states that form the territory, Sze points out, are only half the size of China. As a result, they are often considered to be single entity; a sole region dwarfed by that of their colossal neighbour. That mindset, Sze believes, near guarantees a misfire with any effort to launch a mobile game to the area.

Localization is more than translation

“The main difference between this region and China is that Southeast Asia is not homogenous. You can’t think that one language fits all. There’s no such thing. There’s no localising your game for China, thinking you’ve done everything, and then releasing the game into Southeast Asia. In order to localise into Southeast Asia, you need to localise it into at least five different languages, and five different cultural differences.” “Treat localisation as a matter of white-washing your product,” he suggested, saying that developers should make themselves more open to practically re-launching their game in the region as a whole new experience.

Games can be released in English, but the number of people who speak the language is limited. 80% of Singapore speaks English, says Sze, but the country only has a population of 5.5 million people.

Many of the unwritten laws apply when targeting Southeast Asia, of course, and Sze is quick to reiterate them. Remember localisation is more than translation. Consider how a switch of text impacts UI and UX. Consider how content may be seen by local culture. Observer local holidays, traditions, and events with regard to updates.

But anybody who believes their strategy for China or Japan will work in Southeast Asia, Sze says, is likely to meet with overwhelming friction on the ground.

Over-the-counter top-up cards are very popular

He points to credit card penetration, which he says is at 66% in the US. Meanwhile, the average in Southeast Asia is lower than 3%, Sze offers. Vietnam, for example, has only 2% credit card penetration.

And yet still games are launched there that heavily favour credit card purchases. Meanwhile, Singapore enjoys 55% credit card penetration, demonstrating how few universal rules apply to the region.

As it happens, over-the-counter top-up cards are much more popular there. Developers should implement direct e-banking, mobile top-up cards, and pre-paid cards – these payment methods can make up 40% of a mobile game’s revenue in the region.

And yet – you guessed it – plenty of games are launched to the area which don’t support top-up cards.

Credit Card Penetration is Much Lower in Southeast Asia Than Other Major Markets, So a Different Monetisation Strategy is Required (Image Credit: CloudMoolah)

One-size-fits-all monetisation approach won’t work

Then there are the publishers that miss the wild variety in ARPU that Southeast Asia offers. Over in Vietnam, where the population is around 92.7 million, ARPU hits around two-to-15 dollars. Singapore’s more modest population of 5.5 million, however, delivers an ARPU of 25-to-125 dollars, so say the presentation slides.

“I can literally jog from one side of Singapore to the other in a day, and I wouldn’t die,” Sze says with a smile. “We’re just 47km across. That’s the widest that Singapore gets. So it’s a small market with high ARPU.”

That means different countries there offer aggressively distinct markets, where a one-size-fits-all approach isn’t likely to land. Equally, different monetisation methods work differently across the region.

“If you want to focus on real monetisation – you want to sell in-game items and all of that – then go out to Thailand or Vietnam,” Sze advises.

“They are very sophisticated gamers. If you save them time, where buying an item will save them time by the week, then everybody is going to throw money at it. If you just are going to rely on ad revenue through Unity ads and so on, where you want people to watch a lot of video and all of that, go to the huge market of the Philippines and the Indonesians. There, there are huge populations who are prepared to play games for the sake of playing games.”

That, says Sze, means casual-leaning markets timid about throwing money at a game, but not devoted enough to take objection to viewing in-game video ads.

And as we’ve seen, when it comes to how communities can play out in Southeast Asia, it is entirely different from what Western developers may be used to. Community managers in the West work hard for their paycheque, but rarely are they held to ransom by their users over free paid-for content.

Work together

Sze recommended working with the right partner, right down to customer service and marketing, adding that you need these elements to have “the local touch” to make sure players feel comfortable with the game. Developers should seek a local publisher to work with on the game, even if it’s just to work on one area, such as localisation.

“Sometimes developers don’t need the full suite, they just want some parts,” he noted, adding that publishers in SEA are now more willing to adapt to this “a la carte” style of publishing.

As such, there remains a huge opportunity to thrive in Southeast Asia, held back by a great deal of misunderstanding around the opportunities the region presents.

Still, there is one thing Sze believes is universal to any mobile game marketing strategy for Southeast Asia; a rare rule of thumb that applies here. It will be expensive, complicated, slow paced, and worth all the effort it takes.

“You have to think about how you judge whether a new market is worth it or not because costs will come with it,” Sze concludes. “If you want to localise you might have 50,000 lines of text, plus graphics. You’re going to spend a substantial amount of money. So what you do is do some market [research] into that market, gather some feedback, and if that feedback is so positive, find an investor, and really invest in localisation.”


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