APAC online games revenue to hit $30B in 2018

Online gamers across the Asia-Pacific are expected to help push the market's revenue to US$30.39 billion in 2018, as more turn to mobile platforms and tap the freemium model.

The online games population will grow to 335.88 million, up from 240.74 million in 2013, and the number of paying online gamers will reach almost 150 million, up from 102.81 million in 2013, said IDC in a statement Monday.

The research firm added that revenue in the region, excluding Japan, will further grow at a compound annual growth rate of 18.53 percent, even amid a slowdown in Southeast Asian markets. Online games revenue grew 14.27 percent to hit US$12.96 billion in 2013, compared to US$11.34 billion the year before.

Growth in the region's online games market is also expected to tap the increasing consumer smartphone adoption and mobile internet access, said Shiv Putcha, IDA's Asia-Pacific associate research director for consumer mobility. He also pointed to Chin's strong contribution, the freemium model, and the rise of mobile games as growth drivers for the market.

"The first major driver comes down to strong regional growth," Putcha said. "China has been and will continue to be the dominant force in online games, but other markets, like Korea and Taiwan, are also seeing strong growth."

He noted that China, Korea, and Taiwan were the top three markets in the region, accounting for 95.56 percent of online games revenue. China dominated with 75.73 percent share of the market in 2013, generating US$9.81 billion in revenue.

Nascent online games markets, such as India and Indonesia, also made great strides in the past year, the analyst added.

In addition, mobile games and new categories that included MOBA (Multiplayer Online Battle Arena) and eSports, had emerged as strong growth drivers, especially in China, Korea, and Taiwan.

According to Putcha, the region's online games market had transformed from a subscription fee-based business model into a freemium model. "In 2013, online games offered in Asia-Pacific were overwhelmingly F2P (free-to-play) games and revenue was mainly earned through sale of virtual items," he said. "Although revenue will be less predictable than subscription fee-based games, F2P model will attract more new gamers when they are able to try the games at no cost."

IDA expects in-app purchases and advertising to become the primary means of monetizing games in Asia, especially over mobile.