Vietnam’s gaming industry is experiencing a remarkable surge, positioning itself as a key driver of the country’s economic growth. Despite its promising future, certain challenges persist, such as navigating complex legal frameworks, optimizing tax incentives, and dispelling misconceptions surrounding gaming in Vietnam. However, the government is actively working to enhance the gaming landscape, attracting top talents and fostering further growth. With these efforts, Vietnam aims to unlock the full potential of its gaming sector, solidifying its position as a powerhouse in the global gaming market.

Highlights of Industry Performance

Vietnam is quickly emerging as a force to be reckoned with in the global gaming industry. In 2022, the world’s total estimated revenue from the gaming industry was valued at US$202.7 billion. With an estimated revenue of approximately US739.76 million in 2022, Vietnam is ranked among the top countries with the highest number of game downloads worldwide. 

According to the latest report by Statista, the revenue of the video games market in Vietnam is projected to reach $847.16 million in 2023 with mobile games being the biggest segment, which is expected to reach a market volume of $696.70 million at the end of this year.

Currently, the country has more than 50 million people playing games, equivalent to half of the population. According to the statistics of the Department of Broadcasting, Television, and Electronic Information, by December 2022, there are 195 enterprises in Vietnam licensed with G1 operating licenses. Till December 2022, the whole market has 871 G1 games and 12.127 licensed G2, G3, and G4 games, being released in Vietnam.

However, the games that are licensed for release in Vietnam are mostly games imported from abroad, with China accounting for 76% of the gaming market in Vietnam, attracting a large number of players. Meanwhile, according to the data of the Department of Broadcasting, Television and Electronic Information, Vietnamese games only account for 12% of the whole industry picture.

In terms of genre, it can be seen that Hyper Casual game is a game series that is fully exploited by Vietnamese game developers, accounting for more than 90% of the number of games produced in Vietnam from 2006 to 2023, followed by other genres such as FPS/TPS and MMO, Cardgames, amongst others.

Game genres by Vietnamese publishers. Source: Internet

The Driving Force Behind Vietnam’s Gaming Industry Development

Rising Tech-talented Workforce

Vietnam has a large, growing pool of skilled workers in the technology sector, including game developers and designers, who are able to create high-quality gaming content that is competitive on the global market. A survey by TopDev, a tech job site in Vietnam, found that the number of tech workers in the country increased by 40% between the period of 2015 and 2019.

According to the Report on the Global Crypto Adoption Index 2022 (Global Crypto Adoption Index – GCAI) Vietnam ranked #1 out of 154 nations in the Global Cryptocurrency Adoption Index (well above the USA, China, and other European countries), reflecting a high degree of tech-savviness.

Increasing Internet and smartphone penetration

According to Kepios, at the start of 2023,  there were nearly 78 million internet users in Vietnam, and internet penetration stood at 79.1%. This represents an increase of 5.3 million users from the previous year, indicating a 7.3% growth rate. 

Mr. Ta Manh Hoang, Chairman of the Vietnam Digital Content Creation Alliance highlighted the potential of Vietnam’s digital content industry. In terms of mobile connectivity, Vietnam had 161.1 million active mobile connections in early 2023, equivalent to 164% of the total population. These figures represent a significant opportunity for businesses and organizations looking to break into the gaming market as the thriving digital landscape is posing countless possibilities for the gaming industry to expand its reach.

Government’s support

The Vietnamese government has actively supported the growth of the gaming industry through initiatives such as tax incentives, investment in infrastructure, and the establishment of tech parks and innovation centers. In 2016, the government issued Decision No 1755 QĐ-TTgapproved a strategy for the development of Vietnamese cultural industries to 2020, vision towards 2030, which identified the development of entertainment software and games as one of the 13 important sectors.

According to Mr. Le Quang Tu Do, Director of the Authority of Broadcasting, Television and Electronic Information, the game industry is an industry with good development potential in Vietnam, especially in the context that our country is promoting digital transformation and building the industrial revolution 4.0. The Ministry of Information and Communications (MIC) is building a strategy for game development in the 2022-2027 period with an aim to design policies to protect and promote game manufacturing in Vietnam, reducing its dependence on foreign-published games and increasing the income of domestic firms, while preventing violations in the field.

At the Vietnam Game Forum 2023 taking place on April 1, 2023, in Ho Chi Minh City, Mr. Do affirmed that MIC is working with other ministries to have more priority policies for the game industry in the future.

The MIC has worked with the Ministry of Finance to remove the imposition of special tax because it is unreasonable. In addition, the management agency is studying more testing mechanisms, submitting to the government to remove the license, administrative procedures in game publishing for domestic enterprises

Mr. Le Quang Tu Do – Director of the Authority of Broadcasting, Television and Electronic Information

Emerging Trends that will shape the gaming sector in 2023

Mobile Gaming Dominance

Mobile gaming is witnessing tremendous growth and dominance in Vietnam’s gaming export market. With the widespread adoption of smartphones and affordable data plans, mobile games have become more accessible to a larger population. Vietnamese mobile game developers, such as VNG Corporation and Amanotes, have achieved significant success with games like “ZingSpeed Mobile” and “Tiles Hop: EDM Rush,” gaining millions of downloads and generating substantial revenue both domestically and internationally.

Esports and Competitive Gaming

Esports and competitive gaming are gaining significant traction in Vietnam. The rise of esports tournaments, both local and international, has sparked interest and enthusiasm among Vietnamese gamers. In 2020, the Ministry of Culture, Sports, and Tourism of Vietnam officially recognized esports as a professional sport, providing legal recognition and support for the industry. This move is expected to attract more investment, create new job opportunities, and help to develop the esports ecosystem in Vietnam.

The Rise of Hyper-Casual and Casual Gaming

Hyper-casual and casual games have become immensely popular in Vietnam’s gaming export market. After the astounding success of Flappy Bird in 2014, many Vietnamese game development companies, including VGames and Emobi Games, have gained tremendous recognition for their hyper-casual and casual games such as Bumper.io and Crazy Racing. The lightweight nature of the games combined with easy distribution among portable devices has made this a top trend within the industry.

Use of Virtual Reality (VR) and Augmented Reality (AR)

One of the most significant trends of 2023 that will have an impact on Vietnam’s games industry is the progression of augmented reality (AR) and virtual reality (VR). As technology advances and VR/AR devices become more affordable, Vietnamese game developers are exploring immersive and interactive experiences. AR games such as “Monsters GO” by Vietnamese developer Nianticlabs or VR games like “Viblast VR: Virtual Reality Drumming” developed by Elroware Studio are all demonstrating the country’s capability in creating great VR/AR gaming experiences. 

Leverage Cross-Platform and Cross-Play Experiences

As gaming platforms continue to evolve, cross-platform compatibility and cross-play experiences are emerging trends in Vietnam’s gaming export industry. Developers are focusing on creating games that can be seamlessly played across multiple platforms, such as mobile, PC, and consoles. This trend not only expands the potential audience but also enables gamers to engage with their favorite games regardless of the device they own, enhancing player engagement and driving exports.

Challenges and Implications for Vietnamese Companies

Fostering the Coordination Between Game Businesses

The Vietnamese game industry faces its most formidable challenge in the form of a glaring lack of coordination among game businesses. This absence of collaboration hampers the industry’s ability to harness the strengths of individual enterprises, resulting in a discouraging reality where Vietnamese gamers indulge in foreign games while games developed by local businesses cater predominantly to international audiences.

In the Vietnam Game Day 2023 (Vietnam GameVerse 2023) which took place on April 1st and 2nd, General Director Le Quang Tu Do emphasized the event’s significance as a platform for manufacturers, publishers, managers, and gamers to engage in candid discussions about the industry’s current state and its future prospects. The occasion grants domestic companies the opportunity to forge alliances and support one another in their quest for global recognition. Simultaneously, the international presence of major players in the gaming industry serves as a catalyst, drawing attention to the potential and openness of the Vietnamese market and inspiring greater investment.

The development of games necessitates not only the support of the state but also financial resources and technological assistance from developed nations. Thus, the Director of VTC stresses that attracting more investment will pave the way for Vietnam to produce superior, one-of-a-kind products—infusing the industry with resilience and revolutionizing its landscape.

Paying attention to well-trained game design personnel

Amidst the vibrant and fast-paced growth of Vietnam’s game industry, a critical challenge remains: the scarcity of locally designed games that truly meet international standards. In a recent survey conducted by LacBird, a startup specializing in user experience research and technology application development, it was revealed that the majority of game studios in Vietnam rely on an outsourcing model. Their involvement is limited to graphics processing, game programming, or even game cloning. Consequently, the industry suffers from a dearth of game designers equipped with the necessary expertise to conceive, craft, and deliver complete, remarkable, and distinctive gaming experiences. Essentially, Vietnam finds itself with an abundance of game programmers but a scarcity of true game designers.

Thus, to achieve the ambitious goal of bringing Vietnam’s gaming industry to the global map, the country must prioritize investments in cultivating a pool of well-trained game designers. These individuals should possess a comprehensive skill set and the adaptability to keep pace with ever-evolving technology and market trends. By nurturing such talent, Vietnam can unlock its full potential and establish a commanding presence in the global gaming arena.

Tax and Incentive policies

While Vietnam has established itself as a global powerhouse in the production and distribution of games, especially Casual and Hyper-casual games, Mr. Thai Thanh Liem, the CEO of Topebox, one of Vietnam’s leading game companies highlighted that local companies face onerous procedures and extensive waiting times to obtain publishing licenses for these games. The current regulatory framework lacks flexibility and fails to keep pace with the fast-paced nature of the industry. Addressing these bottlenecks, Mr. Le Quang Tu Do emphasized that the Ministry of Information and Communications is currently formulating a comprehensive strategy for the development of the game industry. 

Turning attention to the issue of foreign games, Mr. Le Quang Tu Do acknowledged the prevalence of pirated games entering Vietnam. The Ministry of Information and Communications has taken proactive measures by collaborating with Apple Store and Google Store to combat cross-border piracy. To date, negotiations have resulted in the removal of 250 pirated games. Going forward, the Ministry will intensify its efforts to curtail piracy, including cracking down on payment intermediaries. At the end of each month, the Ministry will provide banks and payment channels with lists of pirated games, ensuring that payments for such games are prohibited.

By addressing the challenges surrounding taxation, licensing, and piracy, Vietnam’s game industry can unleash its true potential and position itself as a thriving force in the global gaming landscape.

Final Thoughts

Vietnam’s gaming industry presents a compelling opportunity for investors seeking to capitalize on a rapidly growing market. With its impressive growth trajectory and the government’s proactive measures to support the industry, Vietnam has emerged as a promising hub for gaming ventures. However, navigating the intricacies of this dynamic landscape requires expertise and strategic guidance.

By partnering with Viettonkin, investors gain access to specialized knowledge, comprehensive market insights, and tailored strategies that can drive their success in the gaming industry. Whether it’s understanding the legal and regulatory frameworks, leveraging tax incentives, or debunking misconceptions, Viettonkin’s experienced team is equipped to guide investors every step of the way.

Don’t miss the opportunity to be part of Vietnam’s gaming revolution. Contact Viettonkin today and embark on your path to success in this flourishing sector.