Gaming is one of Indonesia’s few industries that grew last year despite the pandemic-induced economic slowdown, yet business representatives say they need government support to unlock the industry’s full potential.

Indonesia Gaming Association (AGI) chairman Cipto Adiguno noted that while the overall gaming industry had withstood the impact of the pandemic, business-to-business (B2B) segments, such as publishing, had suffered.

“The B2B model saw negative [growth] at the beginning of the pandemic. Gaming services saw almost no impact, while some product-based [companies] saw sales rise,” he said during a press conference on August 16.

Ministry of Tourism and Creative Economy data show that the apps and gaming industry contributed 24.88 trillion rupiah ($1.7 billion) to the country’s economy last year, accounting for 2.19 per cent of the total gross domestic product (GDP).

The gaming industry grew 4.47 per cent last year, second only to television and radio, as more people turned to home entertainment amid social restrictions enforced to curb Covid-19.

A survey conducted by the Indonesian Institute of Sciences (LIPI), the Ministry of Communications and Information and AGI showed that 36 per cent of industry players saw their revenue rise last year, while 31 per cent experienced lower revenue and 33 per cent said they were not impacted by Covid-19.

Cipto said Indonesians were expected to spend around $1.7 billion on gaming this year but added that most people were buying imported games, while the local gaming industry received less than five per cent of the total spending.

This was why Indonesian game producers had depended heavily on rising export revenue over the past few years, Cipto added.

“There’s an urgent need for the government to support this industry because the bigger you are, the bigger you get … Games that reach a certain threshold [in the number of players] will become more popular, while those that lag will keep lagging,” he said. “So, [depending on how] fast we reach that threshold, we can win in the domestic and export market.”

Indonesia will be sending 49 participants to two gaming events beginning in September, Cipto said. While 19 will attend the 2021 Tokyo Game Show, 30 will join the Developer Conference (Devcom), Europe’s biggest game developer conference.

Cipto said Indonesia would “catch two fish at once” by attending both events, as Devcom would attract partners for gaming projects on the PC and console platform, while the Tokyo Game Show offered opportunities for mobile game developers.

“We hope Indonesia’s delegates can showcase optimal performance in B2B activities, so as to contribute to our foreign exchange,” Minister of Tourism and Creative Economy Sandiaga Uno said on August 16.

The government has been hands-on in supporting the gaming industry, with Sandiaga’s ministry recently subsidising local games sold on e-commerce platforms during the Indonesia Game Day event on August 8.

Last year, the Ministry of Youth and Sports and the Indonesian Sports Council (KONI) recognised esports as a sports field, thus allowing video games as sports in official competitions, such as the National Games (PON).

A study by tech giant Tencent and game market research firm Newzoo revealed that Indonesia has the greatest esport audience in Southeast Asia at 17 million people, which compares to 8.1 million and 6.7 million in Vietnam and the Philippines, respectively.

“The rollout of 5G networks, which has already begun in countries such as Indonesia, Malaysia, Singapore and Thailand, will further unleash the potential of the [internet], allowing people to embrace games and esports across various platforms and through new models such as cloud gaming,” the report states.

Southeast Asia has become the region with the fastest revenue growth in the global esports industry, according to the same report. Esports revenue in the region is expected to reach $72.5 million in 2024, reflecting a 20.8 per cent compound annual growth rate (CAGR).