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Niko Partners 2022 Asia Video Game Industry Predictions

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1. MENA-3 games market revenue will surpass $2 billion in 2022

Niko Partners initiated coverage on Saudi Arabia, the United Arab Emirates and Egypt for the first time in 2022. We call this region MENA-3 in our reports and expect combined games revenue across all platforms to surpass $2 billion this year. Growth will be driven by higher spending per user, additional government support across games and esports, and more gamers entering the market.

2. India will have over 400 million gamers in 2022 

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We predict India will surpass 400 million gamers this year, accounting for over ¼ of total gamers in Asia. We also believe that India, the fastest growing market in Asia, will be the next market to reach $1 billion. Niko Partners has often talked about how the ITV markets, referring to Indonesia, Thailand, and Vietnam, would be the next billion-dollar games markets. These three markets have surpassed $1 billion individually over the past two years.

3. Game approvals in China will restart in early 2022 

China’s video game regulator has not approved any new titles since July 22, 2021. There were only 755 titles approved in 2021, compared to 1,411 in 2020. With the roll out of the national anti-addiction and real name identification system now complete, we expect approvals to restart in early 2022.

4. China’s regulatory approach will shift from reform to enforcement

China’s video game regulator introduced new policies in 2021, primarily aimed at curbing gaming addiction among minors. We expect the regulator to shift away from policy reform in 2022, as it looks to ensure compliance with current regulations. We are already starting to see a crackdown on companies that are curbing regulations and we have upgraded the risk of a Steam International ban in China to high.

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5. Game companies in China will increase focus on exports 

Chinese game companies have dominated their home market and found success overseas with mobile games. With increased investment in AAA game development, local indie studios and the ongoing regulatory risk at home, we expect Chinese game companies to start finding success on all platforms overseas in 2022 and beyond.

6. Esports will become more legitimate in 2022

In 2017 the International Olympic Committee recognized esports as a sport, in 2018 esports was a demonstration event at the Asian Games in Jakarta, Indonesia and in 2022 Esports will be a medal event at the Asian Games in Hangzhou, China. This will lead to more investment in esports player pipelines and player development. 2022 will enjoy an increase in esports training, education, subsidies aimed at esports management, player development.

7. Cross Platform and Cross Play will be a staple of new titles in 2022

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The success of multi-platform titles such as Genshin Impact, the widespread adoption of scalable game engines such as Unreal Engine and Unity as well as the demand for interoperability between devices has led to players valuing cross platform experiences with cross play. We expect some of the largest game studios in China, South Korea, and Japan to introduce titles that run across PC, Console, Mobile and Cloud with cross play enabled.

8. 5G will be available across all 14 markets we cover in 2022 

5G has been rolling out across numerous markets in Asia since South Korea launched 5G services in April 2019. This has led to increased download speeds, lower latency and helped enable cloud gaming on the go. Malaysia, Vietnam, India and Egypt are the four markets we cover that have yet to roll out 5G. We expect them to start their roll out by the end of the year.

9. M&A / Investments / IPOs will continue to play an important role  

2021 was a record year for game related investments, especially in China where the number of transactions doubled compared to the prior year. Tencent alone invested in or acquired more than 100 game related companies last year. We expect M&A / Investments to continue playing a notable role in 2022 and beyond as the value of IP, development talent and new technologies become more important. While there may be a lower number of deals closed in 2022, we believe the overall value will continue to remain high.

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10. Gaming companies will capitalize on the metaverse trend better than tech companies, but it’s still too early for the concept

Metaverse became a hot word in 2021 with numerous tech and gaming companies embracing the concept. Niko Partners believes that live service video games have been building towards the metaverse concept for several years and that companies with experience in both video game development and social media platform operation will have an advantage when entering this space. We expect game focused companies to see the initial benefits of the metaverse trend while tech first companies will struggle to offer value to users. However, we don’t expect to see a true metaverse experience in 2022 based on the currently accepted definitions.

11. The convergence of video games and the entertainment industry further engages gamers 

The video game industry is building on the concepts of metaverse, pan-entertainment and transmedia which is leading to a convergence between games and entertainment. We expect to see more traditional brands, entertainment properties and artists take advantage of live service games in 2022. On the flip side, we expect to see more collaboration between video game IP holders and traditional entertainment such as movies, TV, and comics. This bi-directional approach will further engage gamers in the future.

12. Blockchain game adoption increases, but the space remains experimental 

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Blockchain based games made headlines in 2021 and VCs have invested billions in them. The past year has seen the rise of blockchain based non-fungible tokens (NFTs) in games and the exploration of the Play to Earn (P2E) model. We expect to see new innovative game projects in 2022 and increased adoption of blockchain games. However, the numerous barriers to entry, lack of regulation and questions around sustainability will keep the space experimental in 2022.

13. The local game development scene will grow in developing markets 

Of the 14 markets we cover, Japan, South Korea, and China are considered game development powerhouses due to the hit titles released by domestic developers. The success of Vietnamese studio Sky Mavis (publisher of Axie Infinity) and a 2x increase in local game development studios in India since 2019 shows there is growing talent in these emerging markets. We expect to see the release of a hit game ($100m+ revenue) released by a studio from Southeast Asia or India in 2022.

14. The conversation regarding app store take rates will extend into 2022

The Epic v Apple case made headlines in 2021 and it indirectly led to Apple and Google reducing take rates for developers that earn less than $1m per year. In South Korea, a new bill required Apple and Google to offer alternative in app payment options. In China, TapTap made headlines for offering a 0% take rate and numerous developers have invested in direct distribution to avoid app store fees. As pressure continues to build, we expect platform holders to make further concessions in 2022.

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15. Increasing government support towards local game development across SEA

In 2021, governments became increasingly supportive of the video game sector. Vietnam’s government took an active role in the creation of Vietnam Online Game Developers and Publishers Alliance (which will be formally established in 2022), Indonesia’s government showed support towards local game developers through fundings and infrastructure support, and Malaysia’s government continue to allocate specific national budget for gaming and esports. We anticipate more of this in 2022.

16. Korea and Japan to continue deregulation of the gaming and esports industry

Following Korea’s abolishment of the 10-year-old Shutdown Law and looking at Japan’s increasing interest in esports, we expect that both countries will continue to ease regulations or even move towards deregulation of certain laws or ordinances that hamper the growth of the gaming and esports industry. While an overhaul of the regulatory environment might not be feasible, small changes will be possible to occur in 2022.

Check our 2021 predictions accuracy here. All our predictions came true, except for #7 as a freeze on game approvals in China led to a lower number of import games being approved in 2021 vs 2020.

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India Bans Real-Money Gaming

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India’s lower house of parliament has passed a sweeping online gaming bill that, while promoting esports and casual gaming without monetary stakes, imposes a blanket ban on real-money games — threatening to disrupt billions of dollars in investment and significantly impact the real-money gaming industry, which could see widespread shutdowns.

Titled the Promotion and Regulation of Online Gaming Bill, 2025, the legislation aims to prohibit real-money games nationwide — whether based on skill or chance — and ban both their advertisement and associated financial transactions.

“In this bill, priority has been given to the welfare of society and to avoid a big evil that is creeping into society,” India’s IT minister Ashwini Vaishnaw said in Parliament while introducing the bill.

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The proposed legislation restricts banks and other financial institutions from allowing transactions for real-money games in the country. Anyone offering these games could face imprisonment for up to three years, a fine of up to ₹10 million (approximately $115,000), or both. Additionally, celebrities promoting such games on any media platform could be liable for up to two years of imprisonment or a fine of ₹5 million (roughly $57000), the bill states.

Vaishnaw said the decision to bring the legislation was to address several incidents of harm, including cases where individuals reportedly died by suicide after losing money in games. However, industry stakeholders largely attribute these incidents to offshore betting and gambling apps, which many believe will not be addressed by this legislation.

“This law is bound to face litigation as it fails the test of proportionality under Article 19(1)(g). Instead of safeguarding consumers, it dismantles compliant onshore companies while opening the door wider for illegal offshore betting platforms that are the real source of financial harm,” said Meghna Bal, director of the New Delhi-based think tank Esya Centre.

Article 19(1)(g) of India’s Constitution guarantees citizens the right to practice any profession or carry on any occupation, trade or business.

Ahead of the bill’s introduction in the Indian Parliament, industry bodies wrote to Prime Minister Narendra Modi, urging him to intervene. The letter — sent by the Federation of Indian Fantasy Sports, All India Gaming Federation and E-Gaming Federation warned that the proposed legislation could benefit “illegal offshore gambling operations” while forcing Indian businesses to shut down. These industry bodies represent Dream Sports, MPL, WinZO, Gameskraft, Nazara Technologies and Zupee, among other real-money gaming companies.

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“By shutting down regulated and responsible Indian platforms, it will drive [millions] of players into the hands of illegal matka networks, offshore gambling websites, and fly-by-night operators who operate without any safeguards, consumer protections, or taxation,” the letter stated. (Matka is a form of illegal gambling that originated in India, involving betting on random numbers.)

The three industry bodies estimated that real-money gaming startups in India have a combined enterprise valuation of ₹2 trillion (approximately $23 billion), generate cumulative revenues of ₹310 billion (around $3.6 billion), and contribute ₹200 billion (roughly $2.29 billion) annually in direct and indirect taxes. They also project a 28% compound annual growth rate that would double the industry’s size by 2028. The industry groups warned that the blanket ban could result in the loss of more than 200,000 jobs and the closure of over 400 companies.

A similar letter was also written to Indian Home Minister Amit Shah by these three industry associations.

The bill was passed by voice vote in a noisy lower house less than seven minutes after it was introduced for debate. It now requires approval from the upper house and the president to become law.

Meanwhile, some companies in casual gaming and esports have welcomed the move.

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“We applaud this decision as it allows us to focus on the ongoing concerns as a business — monetization, retention, and most importantly, building great IP for India and the world, rather than having to explain to our audiences what we are to begin with,” said Sumit Batheja, CEO and co-founder of Ginger Games, which is part of Krafton’s Indian gaming incubator and makes hyper casual games.

Krafton is the South Korean gaming company behind the popular battle royale game PUBG.

In 2023, the Indian government amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to curb “user harm” from real-money games and proposed self-regulatory bodies to limit illegal betting and gambling while allowing legitimate games. However, the self-regulation approach faltered due to conflicts among industry stakeholders over enforcement and standards.

New Delhi imposed a 28% tax on online gaming in 2023 to curb real-money play, prompting an outcry from industry stakeholders. Top investors — including Tiger Global, Peak XV Partners and Kotak — urged Modi to reconsider, warning of $2.5 billion in write-offs and the potential loss of one million jobs. The tax, however, remained in place, even as companies challenged its retrospective application in the Supreme Court. Recent reports suggest it may be revised upward to 40% under new rules.

The post India Bans Real-Money Gaming appeared first on European Gaming Industry News.

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Indonesia Prepares VPN Laws to Crack Down on Illegal Online Gambling

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Indonesia is preparing to introduce new rules targeting the use of Virtual Private Networks (VPNs), to crack down on the broader access to illegal online gambling. The move signifies a stronger push by authorities to tighten internet oversight amid growing concerns over unregulated digital activity.

While officials have not really explicitly mentioned gambling platforms, the intention seems to be clear. The aim of the move is to restrict tools that allow Indonesians to bypass government firewalls and access banned content. As the country battles a surge in illegal online gambling, VPNs have become a major target in the regulatory issue.

Indonesia currently ranks as the third-highest user of VPN services worldwide, behind only the UAE and India. A 2024 report by Windscribe, a global VPN provider, found that roughly 41% of Indonesian internet users use VPNs. This tool is largely used to bypass state-enacted censorship and access geo-blocked websites.

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Online gambling, is strictly banned under Indonesian law, but is still thriving via VPN-enabled access to international platforms. These tools allow users to hide their digital footprints, and makes it challenging for authorities to enforce law.

“VPNs are being misused to reach sites and apps that are clearly illegal. We are developing a framework to ensure their usage aligns with the law,” said Semuel Abrijani Pangerapan, Director General of Informatics Applications at the Ministry of Communication and Informatics, in a recent statement.

The upcoming regulations, which are currently under ministerial review, aim to restrict VPN use by requiring providers to register with the government. Unregistered VPN services could be blocked outright. Officials are also considering legal consequences for users found accessing restricted services via unlicensed VPNs.

As for now, no timeline has been officially announced. But local media has reported that draft rules may be finalized by the end of the year.

The current online gambling environment in Indonesia is vast, and mostly hidden. Users often access offshore platforms hosted in regions with lenient enforcement. These platforms promise anonymity, instant payouts, and enticing rewards, thus driving a cycle of addiction and financial ruin for many.

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Indian Gaming Industry Expresses Concern About Proposed Online Gaming Bill

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The real money gaming (RMG) industry has been thrown into unprecedented turmoil after the Union Cabinet approved The Promotion and Regulation of Online Gaming Bill, 2025. The proposed legislation seeks to outlaw all forms of pay-to-play online games, covering both games of skill and games of chance. If passed in Parliament, this would effectively ban the operations of legitimate RMG platforms across the country.

Industry stakeholders say the move was taken abruptly and without dialogue. “There was absolutely no consultation with the companies that have built this sector,” one executive said, adding that the decision violates multiple constitutional safeguards and will almost certainly face a legal challenge.

The industry’s pushback comes at a delicate moment. Only last week, on August 12, the Supreme Court bench of Justices J.B. Pardiwala and R. Mahadevan reserved its judgment on petitions concerning the classification of online games of skill and chance. The Court’s ruling was expected to provide clarity on a sector valued at over $3 billion. Instead, the Cabinet’s surprise approval of the bill has left companies reeling.

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Industry voices argue that the move disregards the legitimate contributions of RMG platforms to India’s economy. By their estimates, the sector contributes nearly ₹20,000 crore annually to the exchequer through taxes and compliance payments, while directly and indirectly employing more than two lakh people. A blanket ban, they argue, would wipe out this entire ecosystem overnight.

The strongest criticism has come from the government’s failure to control illegal offshore betting firms. Companies like Parimatch, 1xBet and Dafabet continue to operate in India, despite repeated reports of their involvement in money laundering, hawala transactions and illegal gambling.

“Instead of cracking down on these notorious offshore firms, the government is choosing to penalize Indian companies that follow rules, pay taxes, and create jobs. This flawed approach not only risks shutting down a legitimate industry but also allows the black market to thrive unchecked,” said an industry representative.

Industry insiders caution that if the bill becomes law, Indian users may simply shift to unregulated foreign platforms, further draining revenue away from the country and undermining consumer protections.

The government, however, has defended its proposal by highlighting the social costs of online money gaming. The draft note accompanying the bill points to the “immersive and addictive nature” of pay-to-play platforms, warning that monetary incentives have triggered rising cases of anxiety, depression and behavioural problems among young users.

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Citing clinical studies, the note claims prolonged gaming has worsened mental health issues, particularly among children and adolescents. The draft further warns of financial risks, with many players suffering losses that have, in some cases, led to suicides.

“These platforms employ predatory tactics—loot boxes, microtransactions, and reward systems—that exploit psychological triggers to encourage overspending. Such practices create cycles of debt and vulnerability,” the note says.

Despite acknowledging concerns about addiction and financial harm, industry groups insist that prohibition is the wrong path. They argue that a balanced regulatory framework—similar to models adopted in advanced markets—would provide consumer safeguards without dismantling the sector.

“Banning regulated RMG firms while letting offshore betting companies operate unchecked will only worsen the problem. The government should be working with us to build safeguards, not pushing us out,” said a gaming association leader.

The post Indian Gaming Industry Expresses Concern About Proposed Online Gaming Bill appeared first on European Gaming Industry News.

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