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Game Industry in Indonesia

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Game, a word that is quite familiar in the ears of people of all ages. Game is synonymous with various forms of games that can be played by people of all ages. Usually games are played on a gadget or a certain set of tools, both offline and online, aka connected to the Internet.

Along with changing times and technology, the development of the game industry in the world has created business potential with quite extraordinary values, up to trillions of rupiah, including in Indonesia.

The development of the game industry in Indonesia, started about 15 years ago. At that time it was already visible that the number of game consoles such as Nintendo, Playstation, etc were growing. At this time, most of the game industry players in Indonesia were only distributors, because it was still the era of console games.

 

During this time, there were no local game developers in Indonesia, because most people also played pirated games, which was related to the high price disparity between the prices of original and pirated game cassettes.

 

After the era of console games, came the era of online games, around the early 2000s. Here also the names of publishers began to appear, namely companies or individuals who had exclusive rights to publish or market game title. During this time, most of the game products were still foreign-made.

 

One of the online games that has caught the attention of game lovers was Ragnarok Online. The developer of this game was Gravity Corporation, a game company headquartered in South Korea, but the publisher is PT Lyto Datarindo Fortuna (Indonesia).

 

In business terms, the game industry in Indonesia started to develop, because legal imported games were also starting to come in. However, it was still difficult for local developers who developed games with their own copyright, due to the high cost of developing each game title, even though there were many talents who were good enough to make games. At that time, the cost to develop just one game title could take around Rp 10 billion to Rp 20 billion. Now the budget can be IDR 50 billion – IDR 100 billion to make a game with a long storyline and good graphics. This is only development, not marketing costs and others.

 

Around 2002/2003 a local developer appeared, named Matahari Studios. A company created by foreign investors in Indonesia that utilizes local talent to work on or receive orders for foreign games. In this era, talents began to emerge, who were initially interested in the world of information technology, and began to switch to the world of animation and games.

 

Finally, in 2005-2006, reliable local developers began to emerge, although their business target was still receiving game orders from foreign companies. However, with the development of time, technology, and opportunities, game developers have also started to appear with their own copyright titles.

 

A number of game companies in Indonesia whose work is well known include Agate Studio, Altermyth Studio, Toge Production, Menara Games, Soybean Soft, Iplayallday Studio, ArtLogic Games, Touch Ten Game, SLAB Games, and others. Most of the developers were developing games for browser at that time.

 

Some Indonesian games that are well recognized for their existence include Infectonator made by Toge Production, Ramen Chain made by Touchten Game, etc.

 

Along with the growth of smartphones in the world and Indonesia today, the game developers have played a major role in encouraging the development of the game industry in the country, both from the producer and consumer side.

 

The growing number of free to play games in mobile devices, also triggering game developers to develop free to play titles in both Google Play Store and Apple Store. The easy path to upload games to Google Play Store and Apple Store is also igniting a lot of new game developers to start their career as an indie game developer.

 

This industrial magnet is able to encourage the proliferation of local developers, including indie developers (not yet in the form of a company). Currently there are more than 400 developers with more than about 1000 games have been born. Inevitably, the business value of this industry has grown drastically.

As part of its mission to grow Indonesia’s creative industries, the Creative Economy Agency (Indonesian: Badan Ekonomi Kreatif or Bekraf) was established in 2015. It is the government entity responsible for assisting and managing the gaming industry’s development. Since 2016, it has also hosted an annual trade show called Game Prime, which caters to developers from Indonesia and the ASEAN region. The Indonesian Game Association (Indonesian: Asosiasi Game Indonesia) is the industry’s trade association, which was founded in 2013.

 

According to Statistics Indonesia, the video game sector in Indonesia accounted for 1.77 percent of the national creative economy (IDR 15.08 trillion) in 2015, with just 20% of creators belonging to an association. In 2017, it maintained at least 2,200 positions. It still barely contributed 1.8 percent to the home market.

 

By 2020, local game developers are expected to control 50% of the national market. Andy Suryanto, chairman of the Indonesian Game Association, estimated in January 2016 that the country had roughly 1,000 active local game creators. Unity Technologies, on the other hand, claims to have around 400 developers working on over 1,000 games. The vast majority of new games are aimed at the PC or mobile market, with only one game recently launched for the PlayStation 4 and none for the other main systems. According to Euromonitor, Lyto, which publishes international MMOs such as Ragnarok Online and CrossFire, was the leading local developer in terms of income.

 

Nowadays, local game developers in Indonesia start to release titles for premium game market on Steam and consoles like PS4, Nintendo Switch which is considered much more profitable than releasing free to play games. Some notable titles including Coffee Talk, Dreadout, Legrand Legacy, Rage in Peace, Valthirian Arc, and many more.

Indonesia has its own game rating system, the Indonesia Game Rating System which was launched by the Ministry of Communication and Informatics in 2016. It categorises video games into the following classifications:

  • SU/Semua Umur (all ages)
  • 3+ (for ages 3 and up)
  • 7+ (for ages 7 and up)
  • 13+ (for ages 13 and up)
  • 18+ (for ages 18 and up)

Written by : Hermanto, co-founder SLAB Games