Southeast Asia: Mobile's misunderstood market

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, COO and co-founder of mobile gaming content and payment aggregator CloudMoolah, speaking in his Unite Europe 2017 session.

"They like to stick around together in these hordes, and there are leaders," Sze continues, with a playful enthusiasm for the notion. "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 is talking to the Unite Europe audience about the power of community, and making 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.

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.

"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'. 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.

"There is $1 billion of revenue there now. We cannot afford to lose this opportunity"

"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.

"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."

And that is just the start.

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.

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. 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.

"A little bird told me that this payment method sometimes amounts to 40% of a mobile [game's] revenue in Southeast Asia," Sze knowingly stage whispers. "This is true."

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

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 then go out to Thailand or Vietnam"

"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.

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."