Big game plan

The global games market is tipped to see even greater growth rates in the coming years. Find out how the Asia-Pacific region fits into this picture, and what some nations are doing to ensure they get a piece of the pie.
Written by Eileen Yu, Senior Contributing Editor on
It's no longer just child's play. The games business is big business, promising to bring significant returns to various industry groups including infrastructure service providers, multimedia content developers, financial and payment services providers, and even lawyers who specialize in intellectual property rights.

In fact, the global market for video games, computer games and interactive entertainment hardware and software was worth US$20.7 billion in 2002, and is expected to grow to US$30 billion by 2007, according to estimates from Singapore's Media Development Authority (MDA).

The Singapore government, for one, has high hopes of becoming the region's testbed for game developers and distributors. According to Thomas Lim, director of digital exchange development, Infocomm Development Authority of Singapore (IDA), the nation has worked out a comprehensive plan in a bid to play a significant role in delivering games to the region.

"We don't have many game developers but Singapore has an inherent advantage to be a place where all online games are aggregated and distributed overseas," Lim said, citing Korea as an example to emulate. The country plays host to server farms that run for Blizzard, a U.S. games publisher which owns blockbuster hits such as Warcraft, Diablo and Starcraft.

Together with Singapore's other government agencies including the MDA and the Economic Development Board (EDB), IDA has high hopes that the island-state will become a games trading and distribution hub through an initiative called, Digital Exchange.

Described as an ecosystem to process, manage and distribute digital assets (that include film, video, music and games), the program seeks to provide the infrastructure, services and know how needed to develop, publish and distribute games to the Asia-Pacific region. These range from content development and localization, to server hosting and financial payment services, to cross-border partnerships and trading alliances.

Lim explained: "In what we call the Games Factory, for example, we get a game and look at how to localize it (for example, bringing down the violence factor) and the characters in the game to cater to a specific market.

"And in another area we call, Games Digiport, we look at how revenues can be collected from where the games are played."

In the United States, for instance, gamers are expected to own credit cards so subscription fees for online games are typically paid for using credit cards. In Asia however, this can be challenging because the ownership rate for credit cards is much lower.

"Singapore, as a game exchange, must then be able to link up to all parts of the Asia-Pacific region," Lim said, adding that the country's various cross-border trade agreements and alliances will prove useful here. "This is where Digiport comes in...to find the partners to deliver such services and market the games."

This will take a few years to develop, he noted. But until then, the newly set up Games Exchange Alliance will champion the way. Spearheaded by IDA, this consortium currently comprises 12 games-related organizations, he said.

"We'll work with the Alliance to go out to the various countries and work out a plan to set up the service support structure, that can in future be tapped on by other users," Lim said. “The game plan is for Singapore to be a digital exchange by 2006--we do not compete with other countries to develop games but to work with them to make the game a success by providing a good infrastructure and value-added services."

Hopeful optimism in Singapore
Seto Lok, director for industry development at the Media Development Authority of Singapore (MDA), is upbeat about the local game market. Singapore definitely has the potential to be a thriving market for games, he said, especially in the areas of online gaming and mobile gaming which will be driven largely by the high broadband and mobile penetration rates in the country.

Analysts have attributed the success of broadband in Korea to the success of its local online gaming market, but whether the same driver will also prove successful in Singapore remains to be seen.

Elsewhere in Asia, the lack of broadband access and adoption has been seen as a limiting factor. The MDA feels that Singapore has the right conditions for the market to mature. In fact, Lok told C|Level Asia that S$12.5 million (US$7.3 million) will be committed for the development of the digital media sector, which includes both digital content and digital technology.

"Of this $12.5 million, at least S$5 million (US$2.9 million) has been set aside to support development of animation pilots and playable game demos by Singaporebased companies," he said.

Lok added that MDA's Digital Content Development Scheme is focused on developing local talent: "The MDA believes in uncovering, supporting and promoting the efforts of talented and promising local game development teams, and providing them with opportunities to produce commercially exportable computer, console and mobile games for international markets.

"Besides encouraging and nurturing their passion for game development, ultimately what will attract local and foreign talent in game development is the existence of a viable game development business in Singapore."

Justyn Olby contributed to this article.

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