Việt Nam gears up to scale its game industry: official

August, 19/2022 - 10:24
In a recent interview with Vietnamnet online newspaper, the Deputy Head of the Authority of Broadcasting and Electronic Information (under the Ministry of Information and Communications) Lê Quang Tự Do spoke about the great potential of the gaming industry in Việt Nam and how the authority will tap the strengths of local game developers and studios to scale up the industry.
A Vietnamese e-sport player practises for the 2021 Southeast Asian Games held in 2022. — VNA/VNS Photo

In a recent interview with Vietnamnet online newspaper, the Deputy Head of the Authority of Broadcasting and Electronic Information (under the Ministry of Information and Communications) Lê Quang Tự Do spoke about the great potential of the gaming industry in Việt Nam and how the authority will tap the strengths of local game developers and studios to scale up the industry.

How has Việt Nam's gaming industry developed in recent years?

There has been major progress in the gaming industry. In 2021, an alliance of online game producers and publishers named the Vietnam Game Development Alliance was established under the direction and support of the Ministry of Information and Communications and the Authority of Broadcasting and Electronic Information.

The alliance has gathered 60 members working in the online gaming industry, of which the coordinating unit has 10 members, which are companies VNG, Vietnam Esports, GOSU Corp, SohaGame, VTC Game, Gamota, Funtap, Viettel Media, Travellet and Solaplay.

The alliance was founded in the spirit of “Unity, Sharing and Continuous Innovation”, aiming to jointly contribute to the development of the gaming industry in Việt Nam, catch up with international trends and improve the competitiveness with foreign businesses and promote the activities and contribution of the industry to society.

According to statistics from organisations like Google, Sensor Tower and Data.ai, Việt Nam is among the world’s top game producers and publishers. Could you tell us your thoughts on this?

The authority has closely followed the reports of international organisations and companies. Việt Nam ranks first in Southeast Asia in producing applications and games in stores like Apple's App Store and Google Play.

Việt Nam has huge potential, however, one problem is that most of Việt Nam’s games and app studios release their products and operate in international markets, and do offshore software development for foreign countries. This is to avoid being taxed. Therefore, this situation causes a loss of budget and brain drain.

The authority is studying viable policies to tap the potential and strengths as well as tackle issues in the gaming industry.

How will the game development strategy be implemented?

We are still in the process of studying the strategy. Basically, it will focus on two main areas: game production and game publication.

For the structure, about 12 per cent of total revenues from games come from the production sector and the other 88 per cent from publication. This shows that the game production sector is still limited.

The share of production revenue is small and the figure is different from the one given by international game reports because as I mentioned earlier, studios based in foreign countries didn’t pay tax so the Government can’t claim tax and it is not added to the total revenue and profit figures.

With regard to this, the authority is tasked with making policies to protect and push the development of game production in Việt Nam. We also aim to bring major studios based in foreign countries to return to operate in Việt Nam and encourage studios to start up in Việt Nam.

The publishing sector of Việt Nam is doing very well, accounting for 88 per cent of the total revenue. However, Vietnamese companies buy games produced by foreign developers, mostly China, to publish. This means our companies are just outsourced by foreign firms. And there is another issue when young Vietnamese people mostly play games by foreign developers – sometimes cultural or historical elements featured in these games are not appropriate for Vietnamese people.

Another problem is that some, though very few, local companies help foreign businesses publish games in Việt Nam, earning money here but paying very little or no tax at all. The authority has cooperated with the Ministry of Public Security to handle violations.

It is our goal to make our game industry less dependent on the international market as well as to increase revenues for local companies.

Where in the world map of the game does Việt Nam target to place itself?

The authority is working on specific goals and criteria to develop our gaming industry. For example, in the game production sector, we will have plans to promote the strengths of Vietnamese engineers and studios.

As I mentioned earlier, Việt Nam ranks first in Southeast Asia in producing applications and games on stores like App Store and Google Play.

According to reports, the number of Vietnamese game developers on the Apple app store is 180,000. But we mostly do offshore software development for foreign companies.

Another thing is that Vietnamese people now are tech-savvy. One example of this is the application of Blockchain in game development and we have very good products. One of the notable studios is SkyMavis with Axie Infinity known for its in-game economy which uses Ethereum-based cryptocurrencies. It was once valued at up to US$3 billion.

The Ministry of Information and Communications is working on many plans to promote the strengths of local engineers and studios.

Besides pushing the development of the game industry, the ministry has also proposed to the Government some supplements and adjustments to regulations related to the management of game companies, to minimise the negative consequences of video games, especially on children. — VNS

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