E-sports and the billion USD opportunities for Vietnam's digital economy
With a young population and the popularity of the Internet, Vietnam has great opportunities and potential to develop the industry of e-sports and video games. This will become a “smokeless industry” in Vietnam in the near future.
New “oil fields” of the future?
Besides familiar digital industries such as e-commerce, electronic payments and video games are emerging as a phenomenon. The e-sports market has become attractive despite the complicated developments of the Covid-19 epidemic.
The latest report by App Annie and IDC shows that global video game downloads in the first quarter of 2021 increased by 30% compared to the fourth quarter of 2019, reaching $1.7 billion in revenue per week. This is a 40% increase from the pre-pandemic period.
Realizing the potential of the video game industry, the Middle Eastern oil powers have poured huge investment capital in this field, even orienting video games to become a spearhead economic sector in the post-oil era. It is expected that in the next 5 years, the video game industry will reach a growth of 300 billion USD per year.
In the United Arab Emirates, special economic zones have been established for game developers, with special incentive policies to create an ideal environment for the creation of new games that can be exported.
E-sports: Billion USD business
Based on elaborately produced video games and increasingly modern Internet-connected infrastructure, e-sports is gradually becoming an important economic sector with 495 million users worldwide. This sector generated nearly 1 billion USD in revenue in 2020 and is becoming an important contributor to the digital economy.
In fact, e-sports is not a completely online sport. However, under the impact of the Covid-19 pandemic, the format of this sport has changed. E-sports athletes can now identify and compete remotely with the help of professional anti-cheat technologies. This trend has allowed e-sports tournaments to run smoothly on global scale. For example, the recent European League of Legends Championship attracted more than 12 million online viewers.
According to Newzoo, the number of e-sports viewers globally will reach 646 million in 2023, with estimated revenue of nearly 1.6 billion USD.
Vietnam's digital economy and the golden opportunity from e-sports
According to a report by the Authority of Radio, Television and Electronic Information (Ministry of Information and Communications), the revenue of the video game industry in Vietnam in 2020 reached the milestone of 12,000 billion VND, more than double compared to 2015. Taxes paid by enterprises in this industry were also 2.5 times higher during this period.
In terms of employment, the growth of the video game industry is even more impressive. The number of employees working in this industry has increased from 7,000 in 2015 to 25,000 at present.
Although 2020 was the year when the epidemic broke out, causing disruption to many industries, the video game industry is still considered one of the few economic sectors with a positive growth index and a stable labor market.
According to Appota's Vietnam Mobile Application Report 2021, video games are among the most downloaded apps on both iOS (41.2%) and Android (64.5%) app markets. The figure clearly shows the development potential of this "smokeless" industry.
The Vietnam E-Sports White Paper 2021 released by the Vietnam E-Sports Entertainment Association (VIRESA) also indicates that the Vietnamese video game market had about 40 million players in 2020. Of the number, 18 million people played e-sports, accounting for nearly 28% of Internet users on mobile and almost 100% of them used 3G/4G services.
With the growing demand for entertainment and stricter requirements on the graphics quality of mobile games, users will look to 5G for smoother experiences. The commercialization of 5G in Vietnam will therefore become a golden opportunity for the development of e-sports.
On the other hand, the huge number of players and followers of e-sports will bring more customers to 5G network service providers.
Photo: Vietnam's mobile internet speed is among the top in the region. This is a golden condition for the development of e-sports in Vietnam.
E-sports is a field that strongly attracts the investment of private economic resources for organization, operation, training, sponsorship, communication and broadcasting.
As of December 2020, the total prize money from e-sports in Vietnam reached 4 million USD. This is an impressive number because Vietnam has only approached the e-sports industry for the past few years.
In this market, Gen Z players (13-22 years old) do not have stable income but are ready to spend on e-sports. Currently, about 51-57% of players aged 13-22 spend in this market. This is a testament to the great growth potential of e-sports in the future when this group of people is more self-sufficient in income.
In the 4.0 era, the digital economy has become the engine for growth in many parts of the world. In particular, the breakthrough development of new industries such as video games and e-sports has become a "sustainable lifebuoy" for the economy in the Covid-19 and post-Covid times.
Along with the development of the game market and digital entertainment platform, eSports has potential for development in a diverse and highly globalized ecosystem.