Invisible War: Indonesia Are Losing, and Game Might Be The Turning Point

Fortune Business Insight data reveals that the global gaming market is currently valued at $249.55 billion in 2022, projecting growth to $281.77 billion in 2023, and is expected to continuously rise to $665.77 billion by 2030.

Moreover, Indonesia, being one of the most populous countries globally, boasts a substantial number of gamers. With a staggering 174 million gamers, Indonesia surpasses its Southeast Asian neighbors in gaming enthusiasts.

Presently, Indonesia finds itself in the midst of an invisible war, commonly known as the "Soft Power War." Unfortunately, the country is currently on the losing side of this battle.

In 2021, Indonesia's gaming market reached a noteworthy $2 billion or approximately IDR 30 trillion. Regrettably, a significant portion (99.5%) of this revenue flows out of the country, leaving only 0.5% for local game developers. This percentage could further diminish without concrete steps to support the local gaming industry.

Despite Indonesia producing original games like Lokapala, the country's first MOBA (Multiplayer Online Battle Arena) game, a staggering 85% of the national gaming market in 2021 was dominated by 100 multiplayer games, both cooperative (social) and competitive (esports). The remaining 15% was contested by 400,000 single-player/casual games.

This situation poses a significant threat to Indonesia, especially in terms of productivity. As Indonesia approaches its golden age in 2045, where the productive population outweighs the non-productive, the current setback could jeopardize the nation's potential prosperity.

While Southeast Asian countries vie for leadership in the gaming industry, neighboring nations like Malaysia allocate a budget of IDR 120 billion for the local gaming industry in 2024. They also offer grants of IDR 3.5 billion for new Intellectual Properties (IP) and IDR 7 billion for IP development.

Thailand is similarly taking Soft Power seriously as part of their national defense. Notably, Thailand recognizes the exponential export value of South Korea's gaming industry, exceeding K-Pop by 12 times and dwarfing the film industry by 100 times.

Even Singapore, with only 2% of Indonesia's total gamers (2.8 million), is actively addressing its gaming industry. Singapore's gaming sector has witnessed a 70% annual growth from 2017 to the present, surpassing revenues from its e-commerce sector. This aligns with Singapore's ambition to become the primary hub for gaming and esports in Asia.

India, with its massive population, supports the local gaming industry by banning foreign games like Mobile Legends and 58 other Chinese applications on Google Play and Apple's App Store in 2020. This move has fueled the growth of local game developers in India.

In Europe, France is notably providing substantial tax incentives, up to 90 billion per company annually, for the development of local IPs. Similarly, South Korea and Japan are intensifying efforts to strengthen their soft power, anticipating the growth of China's gaming soft power.

Even Saudi Arabia has joined the race, allocating $38 billion or approximately IDR 580 trillion this year to build its gaming industry from scratch.

Meanwhile, China, as the world's largest gaming exporter, imposes stringent regulations to limit foreign games published in the country, allowing only around 30 foreign games to be published in China each year.

What about Indonesia?

The Indonesian government is preparing a Presidential Regulation (Perpres) for the Acceleration of the Development of the National Gaming Industry. This regulation is not aimed at blocking foreign games, as seen in China's policy. The hope is that this regulation will assist the national gaming industry in competing with foreign games that currently dominate 99% of the domestic market, enabling Indonesia not only to survive but also to win the 'Invisible War' on its own soil.

The 'Invisible War' is a call for all institutions and the public to unite and harness the extraordinary potential of the gaming industry. The goal is not only to defend domestic products but also to build soft power towards Indonesia's Golden Age in 2045. (*)