Booming E-sports Industry Takes Indonesia by Storm

Indonesia’s video games industry is expected to double through 2024 to reach USD2.5 billion. In 2019, Indonesia recorded the 4th largest video games revenue in Asia after China, Japan, and South Korea, leading in South East Asia by quite a margin.

E-sports’ aggressive expansion

E-sport is becoming a big deal in Indonesia, receiving huge attention from the government and investors. It has successfully engaged consumers from all age groups and backgrounds, creating a market to reach the whole population. While it was relatively unknown a decade ago, the increasing penetration of smartphones and internet access has transformed the industry from niche to mainstream, achieving a value CAGR of 28% over the last five years.

A major draw of mobile games is the fact that most start off free with options to purchase in-app, along the way. This appeals to mass consumers as a refreshing activity and most eventually get hooked and spend on these games. According to Euromonitor’s Lifestyle Survey 2020 taken before the coronavirus (COVID-19) pandemic, 34.7% of Indonesian respondents engaged with online video gaming at least weekly.

This trend is growing significantly in 2020 as people are forced to stay at home with limited entertainment options due to COVID-19, helping E-sport establish its presence further. Indonesia Game Association (AGI)’s internal data mentioned that video games publishers in Indonesia increased in number by 10-20% during Q1 2020.

Looking to match traditional sports’ success

E-sports’ reputation has progressed from a simple weekend leisure activity to a growing billion-dollar industry. Game publishers and investors are looking to grow a similar business model to traditional sports through tournaments as more Indonesian millennials aspire to build a career as professional E-sports players.

Mobile Legends: Bang Bang is one of the most popular mobile games in Indonesia with over 30 million active users monthly, which amounts to around 11% of Indonesia’s total population. In 2019, it became the first to adopt a franchise league model in South East Asia; a model adopted by established sports leagues which allow teams and organisers to manage the league together. It has a shared revenue concept where teams will have access to over 50% of the league’s revenue pool and athletes can receive professional contracts with a salary.

As a result, in 2020, Mobile Legends Professional League season five has a record-breaking 71 million views in only eight weeks and the final, which was held during the COVID-19 lockdown in Indonesia, had peak viewing figures of around 1.2 million; four times higher compared to last year’s 290,000. E-sports is establishing a sustainable presence and looks to overtake traditional sports leagues in Indonesia in the next few years.

E-sports as a pathway to growth for other industries

The booming e-sports industry in Indonesia has become a way for brands to engage with consumers, especially millennials and gen Z. In recent years, brands from industries such as FMCG, consumer electronics, e-commerce, food and drink, media, consumer banking, travel, and retail, have been involved in sponsorships, investments, and partnerships. High viewership and engagements with a long-term vision causes these brands to see business value in investing in e-sports.

Lazada recently formed a partnership with Indonesia’s EVOS e-sports team which currently manages over 50 gaming influencers with a total of 65 million YouTube subscribers, 50 million Instagram followers, and 350 million monthly views. EVOS itself has collaborated with over 40 brands from various industries in Indonesia.

Smartphone brand, Vivo, utilises the popularity of Mobile Legends: Bang Bang to be its official gaming partner. In 2020, Vivo created the Mobile Legends tournament to promote its new Vivo V19 smartphone during the COVID-19 period. E-sports has been a factor contributing to the brand’s smartphones growth in Indonesia, from 7% of market share in 2017 to 19% in 2020.

E-sports has enormous market potential over the next decade and will attract even more sponsorship and investment from all industries. The industry has also proven itself to thrive during the crisis with its growth in viewership and gaming sales throughout the COVID-19 pandemic, hence e-sports will remain a potential area for businesses to tap into.

For more information, access our Video Games in Indonesia report.