Vietnam's Gaming Export: A New Frontier of Economic Growth and Soft Power

The fact is, in recent decades, Vietnam has emerged as a significant player in the global gaming industry. However, to elevate Vietnam's gaming industry to the same level of recognition as Japan's manga or Korea's K-pop, concerted efforts are needed from Vietnamese game developers, publishers, and the government to promote the industry's potential and unique gaming products. By highlighting the country's unique cultural identity and creative talents, Vietnam can showcase its soft power to the world and join the ranks of nations with significant gaming exports.

Highlights of Vietnam’s Gaming Exports

Vietnam’s Gaming Export Revenue

According to Newzoo's forecast, the global gaming market is projected to exceed $200 billion by 2023, representing a significant milestone for the industry worldwide. In Vietnam, the game industry is experiencing substantial growth and expansion, fueled by the advancements in information technology and the ongoing process of digital transformation. This growth presents Vietnam with promising prospects to establish itself as a lucrative export industry with high value-added potential.

Latest report by the General Statistics Office of Vietnam revealed that in 2020, Vietnam's gaming exports reached $195 million, a significant increase from $130 million in 2019. The United States is Vietnam's biggest market for gaming exports, accounting for more than 50% of the country's gaming export revenue. Other major markets include Southeast Asia, Japan, South Korea, and Europe.

As of 2021, Vietnam ranked seventh in the world in terms of the dollar value of video games-related equipment exported, worth $853.2 million, equivalent to 3.2% of global exports. While this is still a relatively small percentage compared to China ($14.6 billion), Poland ($1.5 billion), and the US ($1.17 billion), the country has been showing significant potential for growth in the gaming industry, with continuous success in creating games that appeal to both local and international audiences. 

The significance of Vietnam's gaming industry is further supported by the App Annie 2020 rankings. The country claims the 7th position globally and secures the 2nd spot in Southeast Asia for the highest number of game downloads. Additionally, Vietnam stands strong as the 3rd largest game application manufacturer in the region. These statistics emphasize the impressive growth and influence of Vietnamese gaming studios, with every 25 games downloaded originating from local developers.

Major Game Developers

Amanotes

Founded in 2014, Amanotes has become the world’s #1 Music Games Publisher, with over 2.8 billion downloads worldwide and 120 million monthly active users. While Amanotes’ games are popular in Vietnam, their main market is global. In Q4 2019, Amanotes was the top-downloaded mobile game publisher from Southeast Asia across both Android and iOS. They also ranked 8th in game downloads for Q4 2019 in the United States. On an international level, Amanotes is among the top 15 mobile game publishers and the top 20 publishers of mobile apps across all categories.

VNG Corporation

VNG expanded its presence beyond Vietnam and successfully entered other Southeast Asian markets. Their games, including Sky Garden, Audition, and CrossFire, gained popularity in countries like Indonesia, Thailand, and the Philippines. The company has also established partnerships with major international game developers and publishers, allowing them to bring successful global titles to the Vietnamese market. Notably, VNG has partnered with US-based Riot Games  to publish League of Legends in Vietnam, contributing to the game's popularity and the growth of the Vietnamese esports scene.

Hiker Games

Hiker Games is a Vietnamese game development studio known for its involvement in exporting games to various markets. The company's titles, such as The Darkest Nightmare and Fantasy Stars, have found success in markets like Southeast Asia, Japan, South Korea, and China. Notably, in 2018, Caravan War made a significant impact by securing a spot among the Top 10 most downloaded games in both the Chinese and Korean markets. Achieving such recognition is no small feat, especially considering the formidable dominance of these markets as leading hubs for mobile gaming worldwide.

Topebox

Over the past 10 years, the company has created more than 80 games and attained a remarkable track record of over 30 notable achievements on global charts, with more than 100 million downloads worldwide. Some of the most popular games published by Topebox include Politaire which was featured by Apple for Game of the Year on App Store in 2016, Pocket Army (the first Vietnamese game to enter the top of the highest-grossing apps in the US), Gun & Dungeons (top 9 “Best user choice” and “Best game of 2022” by Google Play), among others.

Challenges and Implications for Vietnamese Companies Eyeing on foreign markets

Challenges Facing Vietnamese Companies

Fall short of Quality and Production Standards

Maintaining high-quality standards in game development is essential for success in foreign markets. However, many Vietnamese companies may face obstacles in meeting the quality expectations of more mature gaming markets, such as North America, Europe, or Japan.

One of the most prominent examples is the case of Studio 99, a Vietnamese game development studio. In 2018, the company encountered difficulties when exporting its game “ Lost Route” to the global market. The studio then had to invest additional time and resources to improve the game's graphics, gameplay mechanics, and overall polish to meet the expectations of international players.

Limited Distribution and Marketing Channels

A lack of necessary networks and expertise to navigate international distribution and marketing processes is undoubtedly detrimental to the expansion of any game product in any foreign market.

In 2019, Appota, a Vietnamese mobile game publisher, encountered difficulties in expanding its presence and promoting its games such as “Gunny Mobi" and "Dawn Break: The Flaming Emperor” in the Chinese market. This was partly due to the limited slots for promotion as distribution platforms in China typically prioritize the most promising and lucrative titles. Appota, as an outsider in the Chinese market, faced the challenge of convincing the distribution platforms that their games were worth allocating valuable promotion slots, which required demonstrating the potential for high user engagement and revenue generation.

Incomprehensive Understanding of Language and Localization

Adapting games to the linguistic and cultural preferences of foreign markets is significant. However, Vietnamese companies often face difficulties in translating and localizing their games effectively, which can result in a lack of appeal and understanding among foreign players.

When VNG Corporation, one of Vietnam's leading game developers, first entered the Indonesian game market with Sky Garden in 2017, they faced critical localization challenges that required a significant investment of resources. As the localization process involves more than just direct translation; it requires adapting the game's content, user interface, dialogues, and instructions to ensure they are culturally appropriate and resonate with the target audience. The company had to invest resources in hiring professional translators and linguists who could accurately convey the game's content in Indonesian while maintaining its original intent and quality.

How should companies adapt for success?

Focus on Quality and Competitiveness

To thrive in the highly competitive global gaming industry, Vietnamese game developers must ensure their games meet international quality standards. Improving graphics and audio quality, optimizing performance, and incorporating innovative gameplay elements will help them stand out from competitors. By offering unique features and polished experiences, Vietnamese games can attract a dedicated player base.

Conduct Thorough Market Research and Localization

Understanding the target market is essential for success. It’s important for Vietnamese game companies to conduct comprehensive market research to identify the preferences, demographics, and trends of their target audience. This information can guide them in adapting their games effectively. Localization efforts should go beyond language translation and consider cultural nuances, player behaviors, and market-specific modifications to create a truly immersive experience for players.

Establish Distribution and Marketing Channels

Having reliable distribution and marketing channels is crucial for reaching the target audience. Vietnamese companies should consider partnering with international publishers or distributors who have experience in the target market. Leveraging digital platforms, app stores, and social media advertising can significantly amplify their reach.

Ensure Regulatory Compliance

Compliance with local laws, regulations, and industry standards of the target country market is absolutely paramount for Vietnamese game companies seeking to export their products to foreign markets. In the context of expanding their operations internationally, these companies often face legal barriers to market entry that can pose significant concerns. To overcome these challenges, it is crucial for Vietnamese game companies to consult with market entry consultants who possess expertise in navigating foreign markets. By working closely with market entry consultants, Vietnamese game companies can ensure they are well-informed about the legal landscape and can make informed decisions about modifying their games to meet the statutory requirements for ease of market entry.

The Bottom Line

As the gaming industry continues to mature, it is believed to become a major contributor to Vietnam's economy and a force to be reckoned with on the global stage. The country's talent pool, coupled with initiatives like tax incentives and funding programs, creates an ideal environment for innovation and entrepreneurship.

Investors looking for lucrative opportunities in the gaming industry need to look no further than Vietnam. Investing in this industry could yield significant returns for investors, but it is crucial to have a reliable and experienced consulting partner to guide you through the investment process. At Viettonkin, we can provide you with customized solutions that meet your specific investment needs, ensuring that you make informed decisions and avoid costly mistakes. Our team of experts is here to assist you with every step of your investment journey, from market research and strategy development to due diligence and risk assessment.

Together, we can make your investment in Vietnam's gaming industry a profitable and rewarding experience. Contact Viettonkin Consulting today!