Vietnam as a Mobile Gaming and eSports Hotspot, Despite Regulatory Constraints

Gregory Sigel, VP - Partnerships

Statista forecasts that revenue derived from mobile games in Vietnam will exceed US$90m this year, and expand at a compound annual growth rate of 5.6% to be worth US$113m by 2024. During the same period, user penetration is expected to accelerate from 5.6% this year to 6.3% by 2024.

Around 85% of all Internet users aged between 16 and 64 in the country currently play games on their smartphones, a much higher figure than the 50% that said they play games on PCs, game consoles (9%) or tablet device (26%)s. And while there are fewer gamers that currently play games on cloud gaming or streaming platforms (13% of 16-64yr olds), the trend is commensurate with the limited availability of those services, both in Vietnam and elsewhere.

Almost a quarter, though, watched a live stream of other people playing games in 2019, while 18% viewed some form of electronic sports (eSports) tournament. Estimates suggest that Vietnamese subscribers spent US$117m on video games through eCommerce channels in 2019, up 14% on 2018. Statistics published in the Vietnam eSports Guidebook 2019 (VEG), produced jointly by mobile game developer Appota and VTV eSports, suggest that Vietnam had 15m eSports gamers in 2018, a number expected to have reached 26m in 2019.

Vietnam has a dedicated channel – Vietnam Esports TV (owned by Garena) which at the end of 2019 had roughly 3m followers on YouTube and accumulated 1.85bn views, with an average of 650k views for each video on its channel. The Vietnam Recreational eSports Association (VIRESA) was established as early as 2009, dedicated to promoting eSports tournaments, and selecting teams to take part in international competitions.

Global Players Attracted to Vietnam Mobile Gaming Market

Live game streaming is currently led by Facebook Gaming, which launched in Vietnam in 2019, as part of a global push, stealing a march on Amazon’s Twitch (presently banned in the country) but set to face competition from YouTube and Microsoft Mixer. Google’s forthcoming cloud game streaming platform Stadia is also expected to debut in Vietnam and other countries in South East Asia in the near future, alongside Microsoft’s xCloud equivalent.

Whether helped or hindered by the government regulation of online gaming that restricts the availability of foreign titles, Vietnam has built a reputation for incubating high-quality local games developers of its own. As of November 2018, Vietnamese company VNG has been the publisher for PUBG Mobile in Vietnam, leading to a significant increase in its revenues and made it one of the region’s notable local game companies. Multiple game mode title - “Heroes Strike” is a more current popular example, produced by independent game developer WolfFun based in Ho Chi Minh City. Hike Games too has produced a string of hits (including Caravan War) that have found a ready market in other countries, notably China and South Korea, while local games publishers VTC Game and SohaGame are also thriving.

A survey carried out by investment firm Temasek Holdings, in partnership with Google, estimates Vietnam’s mobile game market expanded over 50% in 2018. Confirming the upwards trend, a report by the US Mobile Marketing Association (MMA) and Ho Chi Minh City-based market research firm Decision Lab, predicts Vietnam’s mobile gaming segment will incorporate around 40m mobile gamers by 2020, up from 28m in 2018. The report also revealed that Vietnamese users spend an average of 51 minutes per day playing mobile games, over five to seven different sessions.

That’s a big number for a country with a population of around 97m, although not surprising, given the mass of Vietnamese Internet users between the ages of 16 and 64 that own a smartphone (approximately 93%) and fast average mobile 3G/4G download speeds reaching 30.4Mbps in 2020.

Vietnam’s biggest mobile operator, stated-owned Viattel, has pledged to start rolling out faster 5G services, initially expected to deliver bandwidth of 1-2Gbps, in June 2020, which will push gaming performance and collaborative interaction on smartphones even further. The extra geographical reach and low latency expected with 5G will also prove instrumental in helping MNOs deliver high definition gaming content to more subscribers, as only an estimated 36% of Vietnam’s population lives in urban areas.

Mobile gaming revenue was hit hard by the Vietnamese government’s decision to ban payments for gaming purchases using phone cards in 2018, meaning local and international games publishers need to be more creative in finding the best routes to market for their titles.

If government restrictions allow for post-paid mobile subscriptions, direct carrier billing (DCB) is an ideal candidate for a predominantly cash-driven society like Vietnam, where credit and debit card ownership and usage remains low. Gamers could make purchases via their smartphones – whether downloads, add-ons, power-ups, streaming subscriptions or eSports tickets for example – and have the price added to their mobile phone bill at the end of the month.

Vietnamese MNOs have already made it easy for consumers to buy various digital goods and services via DCB - Vinaphone followed Viettel, Mobifone and Vietnamobile in allowing digital payments on Google Play to be funded from their mobile phone accounts in 2017 for example.

But to reach more buyers and generate more significant revenue, those publishers should be exploring how they can establish direct relationships with the MNOs, via third party payment platforms that benefit both seller and distributor, while making it easier for Vietnamese consumers to make purchases.

i GSMA Intelligence, The Mobile Economy Asia Pacific 2019
ii Globalwebindex Q32019
iii PPRO Payments and E-Commerce Reports 2019/2020