As growth slows in first-tier mobile markets, developing markets have become the Promised Land of mobile. And among all the world’s regions, Asia holds the most promise.
The Asia-Pacific region, which includes the richer East Asian markets, is now the world’s highest-spending app market, ahead of North and South America. Southeast Asia is of particular interest for its growth; by 2021, the region will be home to 250 million mobile gamers and bring in $2.4 billion in revenue. Southeast Asia and India combined are the driving force behind download growth on Google Play, according to App Annie.
But Asia is a huge, diverse place. Every region holds its own challenges. So how is each region developing?
China is tricky, but lucrative
China has come into its own, with mobile game revenue nearly double that of the US. Unfortunately, foreign developers only see a fraction of that; nearly 70% of the market share is claimed by two giants, NetEase and Tencent.
But with more than half a billion users spending $12 billion yearly on mobile games, even a sliver of the remaining 30% is significant. Chinese wallets have grown fat along with the country’s economy, and users have set out to destroy old stereotypes. “Top players in China will drop tens of thousands of dollars in-app without blinking an eye, so games should provide VIP services that cater to this demographic,” advises Ethan Collins, a business development manager at China-based publisher Yodo1. Players who aren’t whales will happily watch ads.
Casual games win in East Asia
Like China, South Korea and Japan are difficult for Western developers. Yet changing tastes among East Asian players may open up the field for some foreign developers to succeed.
RPGs are, as always, the bread and butter of Japanese gamers. But extremely simple casual games are also doing well, and among that genre, top titles come from all over; French publisher Voodoo, Turkish indie developer Serkan Ozylimaz, and Japanese indie developer Ryuji Kuwaki, for instance, give testament to the universal appeal of ad-supported casual games.
Users ready to play — and pay
In Southeast Asia, players have always been willing to play, just not to pay. But in-app purchases are becoming more common. The Philippines are now the third-fastest growing market in consumer spend on Google Play. “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,” shares Jonathan Sze of CloudMoolah, an in-app payment platform. Indonesia, with over double the population of the Philippines, is also a promising market.
Credit cards are the sticking point. Over half of Vietnam’s mobile gamers are paying users, yet only 2% of the population own a credit card. Instead, players pay for in-app purchases using top-up cards and third-party payment methods like Appota, which has been integrated by more than 9,000 gaming and non-gaming apps. Luckily, app stores are keen to solve this issue. Rising in-app purchase rates will lead to improved monetization for all publishers, including those with ad-driven monetization.
Asia sets the stage for AR
Asia is also driving AR and VR more than the West. According to App Annie, searches for AR apps have risen in Japan. South Korea is building a whole complex dedicated to researching and supporting VR and AR developers. The big three of China — Alibaba, Baidu, and Tencent — are investing heavily in AR projects, vying to be the first to create a new market.
The region’s fascination with AR is attracting Western brands too. KFC partnered with Baidu to launch an AR marketing campaign that was played 400,000 times less than a week after launch. Similarly, AR app developers who struggle to find a foothold in the West may find a more curious audience in Asia.
Mobile eSports and core games are seriously winning
The fever for MOBAs and mobile eSports has spread from China and East Asia to neighbouring Southeast Asia. Indonesia is set to host the first Southeast Asian leg of the Mobile Legends Cup. Major telecom companies in the Philippines are partnering up with developers to promote eSports in the country.
The popularity of these online core games signals better infrastructure in the region and a diverse appetite for mobile games. Gamers in Asia are more willing than their Western counterparts to spend time and hard-earned cash to emerge on top. Most of the highest earning games in Vietnam, for example, are PvP games.
Asia will always be intimidating for Western developers; culture, language, and law don’t disappear, even in an open app store. But market shifts will always offer new openings. East Asian countries look ripe for both casual games and cutting-edge tech. As for Southeast Asia and its maturing players, it’s no longer just a place to soft launch your game. For more on India, check out How India Developed Into a Significant Mobile Market.