The Indonesian video game industry is growing. In a report released in 2020 by the Indonesian Game Association (AGI), the Indonesian Ministry of Communication and Information Technology (KOMINFO), and the Indonesian Institute of Science (LIPI), the number of video game studios in Indonesia has continued to grow since 2017. In total, the revenue generated by this industry has reached more than 40 billion Rupiah in 2019.
To support that growth, AGI and KOMINFO have been holding an annual event called Indonesian Game Developer Exchange (IGDX) since 2019. The event gathers Indonesian game developers while also connecting them with both local and international game industry stakeholders. The event includes four main activities: IGDX Academy, IGDX Business, IGDX Conference, and IGDX Career.
Last year, the event was held as an online event due to the pandemic. But as restrictions eased, this year’s IGDX Business and IGDX Conference were held as offline events. From 14 October 2022 to 16 October 2022, the business and conference activities were held in The Stones Hotel, Kuta, Bali. The conference covers several interesting panels presented by both Indonesian and international game industry players. Our report as follows.
The State of the Industry After the Pandemic
The Indonesian video game industry’s growth didn’t go unnoticed by the government. During his speech, KOMINFO’s General Director of Informatics Application, Semuel Abrijani Pangerapan, stated that the income generated by the Indonesian game industry reached 1.1 million US Dollars (around 18 billion Rupiah). Deputy Chairman for Digital Economy and Creative Products at the Indonesian Ministry of Tourism and Creative Economy (MENPAREKRAF), Muhammad Neil El Himam, stated that the video game industry is one of the top subsectors of the Indonesian creative economy, ranking as the 6th top exporter of the Indonesian creative industry after fashion, craft, culinary, film, and music.
However, the growth process has not always been smooth. The president of AGI, Cipto Adiguno, stated that in 2020, the revenue dipped significantly due to the pandemic. Most of the studios affected by pandemic were studios that provided outsourcing services to other companies. Because of their business model, they were greatly dependent on their clients to provide revenue. When the pandemic came, a lot of their clients cancelled their projects or were unable to pay for their services.
But revenues started to increase again in 2021. According to Cipto, this is because studios that previously provided services for other companies pivoted to creating their own video games. After the pandemic ended, those studios continued to make their own games, as the revenue generated from developing their own games turned out to be higher than the revenue generated from their outsourcing works.
Web3 Games
Web3 Games, a type of game that incorporates blockchain technology, has been a big talking point lately. Some Indonesian developers have already incorporated this technology into their video game to generate revenue. Last September, Good Guild Games with Miracle Gates released the Web3 game Battle of Guardians, a play-to-earn game where players can own the game’s characters as NFTs. Battle of Guardians was included in the 2022 Indonesian President’s Cup eSport Tournament, along with Battle of Satria Dewa and Lokapala.
Discussions on the topic of Web3 also happened at the conference. On a panel titled Game Development Opportunities from Web3, Arief Widhiyasa from Mythic Protocol stated that Web3 may be the next evolution of game development. According to Arief, it is the next step that started with the invention of games, which led to premium games, followed by the invention of mobile games and the proliferation of the internet which led to free-to-play games.
Martha Schoppa from Mighty Bear Games also added that Web3 games could provide a level of independence to game developers. According to Martha, game developers are currently too dependent on outside systems. By developing Web3 games, developers can create their own payment or asset ownership system. According to them, this could grant freedom to the developers to manage their assets as they’ve avoided monopolies created by other parties.
An interesting point was brought up by Irene Umar from Discovery Nusantara Capital. On a panel titled Best Practices in the VC Funding for Gaming, she stated that she always tended to wince when reading Web3 game proposals sent to her company. To her, developers shouldn’t incorporate Web3 just because of the prospect of future valuation. “If you want to go into Web3, please do that because you want to make a change. To show how video games should be” she added.
The IGDX Conference 2022 event report continues in the next page.
