Mobile Game in Asia

Mobile Gaming Takes the Lead in the Gaming Sector

|  Industry Leaders Consolidate Through Strategic M&A

The mobile gaming sector contributes nearly half of the global gaming revenue, underlining its prominence in the industry. Its growth is attributed to the accessibility of smartphones and the casual nature of mobile games, which attract a broader audience compared to PC and console gaming. This accessibility has spurred traditional PC and console developers to adapt to the mobile gaming market via cross-platform approaches. The freemium monetisation model remains dominant, leveraging a small percentage of heavy spenders for significant revenue. However, rising development and marketing costs driven by technological advancements are eroding its cost advantage.

Over the past decade, increasing smartphone penetration and enhanced gaming experiences have driven substantial growth in mobile gaming. While the sector saw a brief revenue decline in 2023 due to new privacy challenges, it remains robust, supported by technological advancements such as 5G and high-performance devices. China remains the largest market, buoyed by its vast gaming population, though spending is tempered by lower disposable incomes in smaller cities. Globally, there is rising demand for high-fidelity mobile games, enabled by premium devices, and the trend toward immersive, metaverse-based gaming is expected to accelerate.

The competitive landscape of mobile gaming is shaped by ongoing mergers and acquisitions, as companies seek to secure leading content and expand their market reach. Tencent, leveraging its vast social media platforms, has emerged as a dominant force, while companies like NetEase are developing in-house capabilities through strategic partnerships. Rovio is diversifying beyond its flagship Angry Birds franchise by acquiring smaller studios and creating new games. These trends indicate that innovation, content acquisition, and technological adaptation are pivotal for sustaining growth in an increasingly saturated market.

China and Japan Drive Mobile Gaming Industry 

The mobile gaming industry in Asia is flourishing, with markets like China and Japan demonstrating leadership through innovation and adaptability. China leads the region, with mobile games contributing nearly 75% of gaming revenue, driven by widespread smartphone use and a strong freemium monetisation model. Despite regulatory challenges and rising development costs, key players such as Tencent and NetEase have expanded globally through investments and acquisitions. Similarly, Japan leverages intellectual property (IP) and engineering excellence to maintain its position as the third-largest mobile gaming market globally. Developers focus on engaging content, multimedia franchises, and IP-driven strategies to compete in a crowded landscape, with firms like Square Enix adapting console IPs to mobile platforms.

In Southeast Asia, markets like Malaysia, Thailand, and Vietnam are experiencing rapid growth, bolstered by government support and technological advancements. Malaysia’s government-driven initiatives and esports investments have made it a regional gaming hub, with local and foreign developers leveraging advertising and freemium models to thrive in a fragmented market. Thailand, the second-largest gaming market in ASEAN-6, benefits from high smartphone penetration and an engaged gamer base, with local and international players vying for dominance. Vietnam’s dynamic mobile gaming sector capitalises on rising internet and smartphone penetration, adopting non-cash payments and integrating AI and hybrid game models. Collaborations between local and global developers have further positioned Vietnam as a significant player in mobile game production.

Expanding Smartphone Use Drives Chinese Mobile Gaming Growth

|  Industry Leaders Expand Influence Domestically and Globally

China’s mobile gaming sector has grown significantly, driven by increasing smartphone penetration, improved internet infrastructure, and expanding online payment adoption. Mobile gaming accounts for nearly three-quarters of the total gaming industry revenue, supported by rising disposable incomes and growing consumer willingness to pay for digital content. The value chain is publisher-centric, with the freemium model dominating monetisation strategies. However, rising development costs, driven by technological advancements, have heightened market entry barriers for smaller developers. Strict regulatory oversight further influences industry dynamics, with licensing processes reshaping market accessibility.

After experiencing a contraction in 2022 due to stringent licensing regulations, China’s mobile gaming market rebounded in 2023, benefiting from improved macroeconomic conditions and the optimisation of COVID-19 policies. Sales revenue reached new heights, with mobile games driving the recovery. The easing of licensing restrictions has led to a significant increase in game approvals, allowing publishers to expand cross-device offerings and appeal to broader audiences. These developments mark a shift in market conditions, balancing tighter regulations with opportunities for innovation and growth.

Tencent and NetEase dominate the Chinese mobile gaming market, together capturing over 65% of market share in 2023. Both firms have enhanced their global competitiveness through overseas investments, acquisitions, and the establishment of international studios. Tencent’s market leadership is reinforced by its integration with widely used platforms like WeChat and QQ, while NetEase focuses on in-house development and strategic partnerships to maintain its competitive edge. Smaller players, such as Perfect World, leverage remakes of popular PC games to carve out niche market segments. This trend highlights an increasingly globalised and competitive landscape, where scale and innovation are crucial to success.

Japanese Market Strengthens through IP and Engineering Excellence

The Japanese mobile gaming market ranks third globally, valued at approximately JPY 1.2 trillion in 2022. Industry players, including both mobile-focused and multi-platform developers, are enhancing their competitiveness by building stronger engineering teams and leveraging intellectual property (IP). The freemium model, which combines in-app purchases and advertising, remains the dominant monetisation approach. Developers are increasingly collaborating with IP owners to save on costs and enhance marketing campaigns, while adapting to technological advancements that raise development standards.

After rapid growth during the COVID-19 pandemic, the Japanese mobile gaming market stabilised in 2022 at JPY 1.2 trillion, with competition for consumer attention intensifying against other forms of online content. Despite this plateau, the overall number of users and average revenue per user have grown steadily over the past decade, indicating sustained demand. Developers are now focusing on creating engaging content and effective marketing strategies to compete with alternative entertainment formats and retain consumer interest.

Japanese developers, including long-established companies and global entrants, are vying for market share by producing hit games and revitalising existing IPs through multimedia franchises. Pure-play developers such as GungHo have shifted focus to international markets, while multi-platform giants like Square Enix are expanding console IPs into mobile and non-gaming domains. The ability to create, maintain, and leverage popular IPs is critical, with a single hit title often accounting for a substantial share of a developer’s revenue. Despite fierce competition, innovative use of IP and cross-platform adaptations remain central to long-term industry growth.

Malaysian Government Support Fuels Mobile Gaming Dominance

|  Local and Foreign Players Shape Fragmented Market

Malaysia’s mobile gaming sector leads the local gaming industry, accounting for 75% of its market value. Government initiatives have positioned gaming as a driver of economic growth, attracting foreign investment and fostering development. Malaysian publishers primarily use advertising as a revenue model, with 78% of their games incorporating ads, surpassing the global average. The freemium model is also popular, blending free access with monetisation via in-app purchases or ads. This supportive ecosystem enables local publishers to thrive in a growing market.

The Malaysian mobile gaming market has experienced robust growth, propelled by the rising popularity of esports and governmental initiatives. Strategic plans to position Malaysia as a regional esports hub have led to substantial investments and the creation of regulatory bodies to nurture the industry. Enhanced smartphone technology and the affordability of mobile devices have made gaming accessible to a broader demographic. Esports titles dominate the Malaysian gaming landscape, reflecting a shift towards competitive, community-driven experiences supported by both domestic and international studios.

Malaysia’s mobile gaming market is highly fragmented, with a mix of domestic and international companies. Local developers like CIB Development, Cubinet Interactive, and Appxplore (iCandy) have established themselves by creating games tailored to the Southeast Asian audience. Foreign companies, leveraging Malaysia’s favourable business environment, have increased their presence through partnerships and acquisitions. This dynamic competitive landscape highlights the interplay between global influence and local innovation in driving industry growth.

Thailand Emerges as a Regional Gaming Powerhouse

|   Local and International Firms Compete in Intense Market

Thailand’s mobile gaming market is the second largest in the ASEAN-6 region, driven by high smartphone penetration and an engaged gaming community. Mobile phones dominate as the preferred gaming device, used by nearly 90% of gamers in the country. The industry primarily operates on a freemium model, with most revenue generated through virtual goods sales, including in-game characters and currencies. Popular genres such as shooting and casual games continue to attract significant player interest, underscoring Thailand’s dynamic gaming landscape.

Over the past 5 years, increasing internet penetration and widespread smartphone ownership have significantly bolstered Thailand’s mobile gaming market. The proportion of internet users grew to 88% in 2023, reflecting sustained digital adoption. Smartphone gaming has gained momentum, supported by improved device capabilities and an expanding user base. Despite a decline in gaming spend in 2023, the market experienced substantial growth in preceding years, highlighting its resilience and potential for recovery.

Thailand’s gaming market is highly competitive, featuring both local and foreign companies vying for dominance. Domestic players like Garena Online and Asphere Innovations are significant contributors, leveraging innovative content and extensive user bases. Foreign developers from China and Korea have also gained traction by introducing games tailored to Thai audiences. The competition is heightened by the low switching costs for gamers, necessitating constant innovation and engagement to secure market share.

Vietnam’s Growth Fueled by Diverse Genres and Monetisation Models

|   Local Players Thrive Amid Global Partnerships

Vietnam’s mobile gaming industry is expanding rapidly, driven by the popularity of genres such as action, role-playing, and strategy games. Developers are leveraging diverse monetisation models, including freemium, in-game advertising, and subscription-based options, to appeal to a broad user base. Despite high download rates, low average revenue per user highlights challenges in monetisation and retention. Regulatory measures enforce strict controls on local and foreign game publishers, though gaps remain in monitoring offshore platforms.

The Vietnamese mobile gaming market has grown steadily over the past five years, fuelled by increased internet access and smartphone adoption. Internet penetration has risen consistently, with 5G rollouts enhancing user experiences and enabling more sophisticated gaming. Additionally, the shift towards non-cash payments, including mobile banking and digital wallets, has streamlined in-game transactions, fostering higher engagement and revenue potential. Innovations like AI integration and hybrid game models further expand the industry’s reach, positioning Vietnam as a global player in mobile gaming production.

Vietnam’s mobile gaming market is fragmented, with contributions from over 400 domestic companies alongside global firms. Local leaders like VNG Corporation, Soha, and Gamota have established strong footholds through diverse offerings and collaborations with international partners. Recent partnerships, such as those between Vietnamese developers and companies like Xsolla and NCsoft, highlight a growing trend of global integration, which is expected to enhance game quality and broaden market reach. These dynamics emphasise Vietnam’s evolution into a hub for mobile gaming innovation.