Big opportunities, significant challenges

“The global gaming market is on the rise, expected to reach $2.2 trillion by 2030, with an annual growth rate of about 8.9%,” noted Brian Nguyen, Marketing Director at GOSU, during a panel discussion titled “Survival & Growth: Strategies for Vietnamese Game Companies Expanding Globally.”

According to data from DataAI & AppMagic, Vietnam has risen to the top five in global game downloads, achieving 4.2 billion downloads over four years (from 2019 to Q1 2023). By 2026, Vietnam’s game and app revenue is expected to reach $2.7 billion.

Several leading Vietnamese game companies have made their mark on the global gaming scene, such as VNG, with 261 million game downloads since 2019, and Amanotes, with 2.9 billion downloads in 190 countries.

However, Vietnam’s gaming industry has not fully tapped its potential. Vietnamese companies control only 22% of the domestic mobile game market, with the remainder held by foreign competitors. Vietnamese gaming companies’ profit margins are only 3-5% of revenue, and the sector contributes less than 0.5% to the global gaming market.

According to Brian Nguyen, Vietnamese game companies face numerous challenges. The economic downturn after COVID-19 has impacted game investment capacity and reduced ARPPU (average revenue per paying user). Political instability worldwide forces game companies to carefully consider where to release games due to conflicts in certain regions. There are also cybersecurity risks and the threat of hackers stealing and selling game data.

“There have never been as many obstacles as there are now. Many game studios are struggling to survive, let alone grow. In the past, $20,000 was enough to develop a game; now, $50,000 might not be enough to survive and thrive,” shared Dong Ha, Marketing Director at Hala Games.

Future directions for Vietnamese game companies

Vietnamese game studios are now focusing on the global market, not just the domestic one.

“Taiwan, Indonesia, and Brazil are potential markets. The approach depends on each company’s resources. If resources are sufficient, companies can explore several markets before choosing the best one. At Hala Games, we first target niche markets where we have the most understanding before expanding elsewhere,” explained Dong Ha.

Minh Nguyen, CTO at GAPU, advised: “At the beginning, it’s impossible to know for sure which market is best for a product. Decisions must be based on data gathered from initial market tests. Spread your investments but ensure each segment has enough data for accurate analysis - ideally, at least 1,000 users per country to avoid misconceptions.”

Quan Vuong, Marketing Director at Negaxy Studio, recommended studying market reports on competitors’ actions. Observing which target markets others are entering can reduce testing costs, allowing companies to concentrate budgets on the most promising markets.

To sustain growth, game companies should focus on two strategies: leverage core strengths by continually improving their top products for steady revenue, and embrace new trends to elevate their position.

“Revisit your game catalog to refresh and reuse games that align with current trends. Before jumping on a trend, analyze market data carefully, assess the breakeven point, and evaluate whether you can handle potential losses. At Negaxy Studio, we only take risks when they’re manageable; otherwise, we avoid them unless it’s a game the whole company is passionate about,” added Vuong.

Leaders in Vietnamese gaming agree that besides excelling in core products with cost advantages over competitors, companies should allocate funds for R&D in new games or innovative marketing tactics. Innovating is essential to navigate market fluctuations.

Trong Dat