Southeast Asia’s iGaming market reached US $5.33 billion in 2022 and is forecast to grow to US $7.14
billion by 2026.
Mobile games account for approximately 70 percent of that revenue and video games 23 percent. Analysts believe the shift to “hyper-casual gaming” will likely generate more growth in the mobile games market.? Foreign investment is also on the increase exemplified by the new Sony PlayStation Studios in Malaysia.
Sony endorses Malaysia’s role in game creation
The importance of South Asia in game development is clearly evident in endorsement that Sony made on the territory by choosing Kuala Lumpur for the creation of the very first ever PlayStation studio. It is known that this Malaysian studio is a flagship for the entertainment giant. Moreover the studio is described as ‘state-of-the-art’ and it has been built from scratch, tailored to accommodate innovation and creativity.? Rather than handling specific projects, this studio is managing absolutely every kind of project on first-party games and titles such as The Last of Us Part I and MLB The Show 2022 and at the same time it has been commissioned to? create new character models and other visual assets such as motion capture. The studio employs 77 full timers.
Indie companies
Environment modelling, concept art, animation and video game development are much sought after skills in all of South East Asia but many believe that Malaysia has the edge on innovation and technology. Sony is not the first investor of its kind in the country but joins an impressive number of international and indie studios who have also set up video game development projects in Malaysia, before Sony came along. As well as Play Station, overseas development to launch massive studios have been established over the last few years by Bandai Namco, Codemasters and Larian. Changes in the market indicate a move away from the dominance of AAA developers such as Square Enix and Activision. Indie companies such as Toge Productions and Mason Games are also benefitting from setting up in Malaysia.
Esports
Malaysia Electronic Sports Federation (MESF) is the governing body for all electronic sports in Malaysia. It was set up in 2014. Co-founder Dato’ Ananth S. Nathan is also the elected president and he is dedicated to promote esports in Malaysia. He says that his ambition is that “Malaysia will become the world’s foremost esports nation.”
Only one land-based casino
Currently there is only one legal land-based casino in Malaysia. The establishment boasts of having over 400 types of electronic table games, 3000 slot machines and 30 other tables with games that include blackjack, tai sai, roulette and boules amongst the most popular.
Muslims and those under the age of 21 are denied entry to the venue.
Will online gaming become legal?
Online gambling remains illegal under the current Common Gaming Houses Act 1953 (CGHA). While the Act does not explicitly cover it, Sharia law forbids gambling. With Muslims representing 61 percent of the population, the Government is treading very carefully but it seems that they are working on finding a solution. However the Government is also intent on bringing in new rules to legalise online gambling. Should the industry become regulated and companies given proper licenses, this will create an estimated US $ 650 million currently lost in tax revenues for the Government.
Online casino games are favoured by Chinese Malayans, the most popular being mahjong, baccarat, sic-bo, lotteries, roulette, and slot machines but skill games based on fishing and hunting are also big business.
The State acknowledges that the gaming industry is vital to the economy and an essential source of foreign investment which will also generate tax revenues. The country has attracted substantial Direct Foreign Investment (FDI) in leading SME gaming startups, with some studios originating IPs for games and others providing outsourced developers for international publishers.
Digital Content Ecosystem
Malaysia’s Digital Content Ecosystem (DICE) policy aims to strengthen the digital content industry with Government-backed initiatives to facilitate growth in the industry through finance schemes, training, incubation, business links, and market access. And the higher education system is geared toward nurturing talent with over 50 tertiary institutions offering gaming-related courses. With this ecosystem, Malaysia is well placed to provide opportunities for gaming startups with good state funding and a workforce skilled in gaming intellectual property creation.
A recent KPMG survey placed Malaysia fourth in the region for competitiveness, rating favourably with its Asian peers in terms of the cost of doing business, legislation and tax. The Government recently invested US $5.1 billion upgrading its telecommunications infrastructure, providing 7.5 million premises with gigabit speed fixed-line broadband and expanding 4G mobile coverage to 96.8 percent in populated areas and upgrading mobile broadband speed to 35Mbps.
Potential for iGaming in Malaysia
Numerous offshore betting sites accept Malaysian players, typically of Chinese or Indian heritage who make up 37 percent of the total population. With an average age of 30, a high English perception score of 562, smartphone ownership at 26 million and 23 million gamers, the iGaming market is mainly still untapped. Malaysia offers iGaming companies rich opportunities and the prospect of the Government legalising online gambling points to a window opening for foreign companies to onshore operations
Related Topics:
FaZe wins ESL Pro League Season 17 held in Malta (www.alopecia-sydney.com)
Brazilian esports giant chooses Malta for its european strategy
STOP PRESS:? SiGMA Asia? – World iGaming Festival will take place in Manila from 19 to 22 July
