Bt300-million plan to create 100 gaming entrepreneurs, kick-start a ‘new wave’ industry
Digital technologies have been getting increasingly advanced in recent years, spawning many new industries along the way, as they strive to create a new economic wave. Traditional sectors like agriculture, automobiles, textiles and garments, are no longer the only generators of revenue for the national economy. According to the Digital Economy Promotion Agency (DEPA), the time has come when the digital industry itself can be regarded as a one of the new industries on the national-economic scene.
The agency says the digital industry has five main subsectors: (1) hardware that can be turned into a smart device; (2) digital services that rely on software; (3) software packages; (4) telecommunication or information-communication technologies; and (5) digital content.
DEPA’s President, Associate Professor Dr. Nuttapon Nimmanphatcharin, reveals that his agency has been promoting the digital-content subsector for years. Inside this sector of the industry are various businesses related to games, animation, big data, data analytics and other kinds of content. Of all the business categories in digital content, DEPA has given top propriety to games.
“Thailand’s gaming industry is now worth more than Bt30 billion. It has been growing by between 10 and 15 per cent per year over the past few years. Its growth rate is quite good,” Nuttapon says.
Despite the healthy growth of the gaming industry, Nuttapon says it has great potential and should have generated much higher revenue. At present, it has yet to realize its full potential because the country still lacks supportive mechanisms and human resources. If operators in the industry are empowered and helped in establishing their presence in both Thai and overseas markets, there is a good chance that Thailand’s gaming industry will grow to a value of more than Bt100 billion in the future.
The DEPA president says there are three key players in the gaming industry: game developers, game licensers; and game publishers. After a game is developed, it must be passed on to an intermediary or a game licenser. After a sale is conducted, game publishers – mostly multinational firms – will then put the game into a gaming machine or on to a platform, to be downloaded by smartphone users.
“DEPA’s work approach is just like that used by an entrepreneur. Because we want games to be produced and launched as a business, we sat down with young people at gaming clubs to talk and get a clear idea of the life cycle of gaming businesses,” Nuttapon says.
Connecting people with ideas and people with experience
Nuttapon says the start of a business in gaming is generally different. In other industries, people with ideas pitch them in the hope that their business concepts will impress investors. In the gaming industry, when someone has a good idea, they need a coach – someone who will guide them in developing a story for their game, planning game development, and give them tips about how to generate revenue and find distribution channels.
“To us, people who have a game idea are really people with an idea for a gaming business. It is just that they don’t know how to proceed further. To guide and support them, we have implemented an accelerator program. It is different from a business incubator, though. Coaches here have prior experience in the gaming industry, but they may be someone who has flopped and stopped their business. The bottom line is that coaches know about selling methods. They know where to look for distribution channels. They will offer insights so that people who are interested in the industry know what they must do to be game developers in Thailand,” Nuttapon explains.
In the accelerator program, a cluster was created for younger and older people in the gaming industry to connect. This provided a forum for them to exchange ideas, and good ideas were turned into gaming businesses with growth potential. For those who have transformed into budding entrepreneurs, rather than sticking with the freelancer path, they can come to DEPA for support in their growth stage.
“The growth stage also has its own accelerator program. In this stage, it is time to determine whether a gaming business needs fund-raising or a technological boost for it to grow. The accelerator program also helps with business-matching, both in Thailand and beyond,” Nuttapon says.
Building networks, upgrading the potential of Thailand’s gaming industry
With the aim of enabling Thai gaming businesses to enter international markets and thrive there, DEPA has been in talks with various foreign game licensers and game publishers in order to develop and foster a productive network. Through this network, DEPA has also learnt a lot about new technologies used and owned by foreign operators. It is now planning to match these technologies with Thai game developers so that their products are compatible with future trends.
“COVID-19 stands in the way for the time being, but when we have good ties with game publishers, business matching is possible. DEPA is here to help with business connections and negotiations,” Nuttapon says, adding that connections will help Thai game developers a lot in business competition.
“As well, DEPA has addressed many risks facing game developers. They may start by developing a game as a freelancer. In this case, after their product is launched, DEPA will be there to help transform them into entrepreneurs. When their business is officially set up, it may need funds to develop further, and DEPA will be able to provide them with capital. However, we do not offer grants; we act like an angel fund for startups. Simply put, when we provide them with money, we expect them to repay. They may pay back with a small amount of interest, or they may offer us shares in their companies so that we know about their progress. A game developer needs to develop a story or new features to keep exciting the market, and this progress gives confidence to game publishers, too,” he elaborates.
DEPA’s cultivation of ties in the international gaming industry has already paid off. Dr. Nuttapon says a big game publisher in Japan has already agreed to let Thai game developers use its technology.
“For the first time ever, the technology will come to Thailand as devices, with which young Thai game developers can experiment in the early idea or early growth stages. Stay tuned to find out in what form the technology will come. For the time being, we have already been coordinating with game associations in preparations for the tech arrival,” he says.
Efforts to make Thailand’s gaming industry shine internationally
Nuttapon believes that Thai game developers and Thailand’s gaming industry have the potential to become world-class if they get solid support. The first step should involve “nudging people and firms” working in Thailand’s gaming industry to target overseas markets.
“They should not focus just on Thailand. Their market should extend beyond Thailand, because the Thai population is relatively too small. They should look at the world population and think about globalizing. As well, their product development must be long-term, and not done on a short-term basis. Game development must keep going ahead. Do not just produce a fun game. Produce it and improve it all the time,” Nuttapon emphasizes.
However, he says a game must first be launched in Thailand. Only after it catches on well in the Thai market can it expand to regional and global markets. While the process has to begin in Thailand, it is essential that game developers or companies keep thinking about making their product world-class.
“Some games become sensations right after their launch. But if they are not constantly upgraded or given new features with more stories to tell, they will finally lose out. Today, gamers expect constant development from their favorites, so this is something that must be included in business plans,” he says.
Nuttapon raises another point about changing consumer behavior where the gaming industry is concerned. People no longer view games as entertainment only. Many gamers are adults, and they keep playing games because it spurs their creativity. Many parents play games because they find elements that are relevant to parenting. Games are becoming a part of new lifestyles.
“There are many mental games such as hidden-object games, direction games, and problem-solving games. These stimulate the thinking processes, and Thais are quite good at developing this type of game,” he says.
The goal: creating 100 Thai game firms to trigger a “new wave”
In a bid to create tangible progress in Thailand’s gaming industry, DEPA has had discussions with the Thai Game Software Industry Association. The association has been informed of DEPA’s plan to seek a budget for the gaming industry in fiscal 2022. The budget is sought to amplify the effects of DEPA’s work for the industry over the past few years. When supported by a significant budget, new projects should be able to deliver tangible growth results at a national level.
“We definitely cannot bar young people from doing what they like. So, when their passion is for games, we had better congratulate them on their growth… and let them grow in a good way. DEPA intends to support 100 entrepreneurs in gaming industry by 2019.
We also plan to set up an intermediary, or game licenser, in Thailand. If the plan materializes, Thai game developers will not have to give up a big chunk of benefits for game distribution. Currently, game developers get just Bt30 when their game is sold for Bt100 in a market, because Bt35 goes to game licensers and another Bt35 to game publishers. When game developers have just small profits left, they are at disadvantage,” Nuttapon says.
In the light of this situation, DEPA believes it is not enough just to produce human resources for Thailand’s gaming industry. After all, Nuttapon says, the country should have its own big game licenser so that it can have bargaining power in global markets and attract an inflow of money. In its plan to set up a Thai game licenser, DEPA intends to bring several game developers together and prepare them to serve as the licenser.
“We have prepared accelerator programs to achieve our goal of bringing Thai games to the global market. To implement our plans, we will seek Bt300 million for use in the first year. The budget will be spent on producing 100 Thai game developers. Each of them will get Bt5 million to start their business life cycle. It is a way to spin off effects. With a Bt300-million budget, we will at least get 100 new entrepreneurs and trigger a new wave,” Nuttapon says.
He believes that in an economic sense, the new wave will complement traditional industries, such as the agriculture, automobile and textile industries. In the face of intensifying competition, the birth of new industries means more state revenue.
“When the new entrepreneurs thrive, they will attract customers from all over the world. Revenue will be flowing in,” he says.
The DEPA President adds that the growth of the new industry promises to encourage the growth of related businesses as well. Event organizers, garment makers, makeup artists, and content creators could be beneficiaries of the growing gaming industry.
In other words, when the gaming industry grows, game developers and game licensers will by no means be the sole beneficiaries. Various other business operators will benefit as well.
“This is going to be the new dimension of the gaming industry. Even restaurants are in a related industry, because when gaming booms, there will be competitions that generate impacts. When a game is launched or a gaming competition is held, various other businesses will be involved. Game arenas, which are considered an infrastructure, will also play a role,” Nuttapon explains.
Regarding the direction of Thailand’s economic growth, Nuttapon says the country should look ahead with a fresh perspective. It is of course necessary to support traditional industries so that they can survive, generate added value, and grow. Yet, the Thai government cannot ignore the need to develop new industries. Several countries have already taken the path of creating new complementary industries and offering new choices for the young generation.
“We are extending opportunities for young people to become key drivers of the Thai economy. We can’t tell young people not to jump into the gaming industry. If you say ‘No’, they will just work for other countries instead, and Thailand will lose its human resources. Thailand’s gaming industry in fact has potential. It just needs opportunities. We believe that the gaming industry is going to be a ‘new wave’ industry. It is already worth dozens of billions of baht, and it has the potential to be worth hundreds of billions of baht. When the gaming industry grows, it means the Thai economy grows too. In a nutshell, the growth of the gaming industry means more tax revenue for Thailand.
“This is about using the ability of Thais to attract foreign currency, develop the country, and give hope to the new generation,” Nuttapon concludes.