How to Capitalize on Indonesia’s Gaming Industry

Gaming Industry in Indonesia: Investment and Growth Potential

  • InCorp Editorial Team
  • 12 December 2024
  • 5 minutes reading time

The gaming industry in Indonesia is experiencing rapid growth, making it one of the most promising markets in Southeast Asia. With a massive population of tech-savvy youth and a thriving digital economy, the country offers significant investment opportunities for local and international players. 

The government’s supportive policies and the increasing popularity of mobile gaming have further fueled the industry’s potential.

Overview of the Gaming Industry in Indonesia

The appointment of Irene Umar, a former gaming investment professional, as the Deputy Minister for Creative Economy under Prabowo Subianto’s presidency has sparked optimism in Indonesia’s gaming industry.

Shafiq Husein, chairman of the Indonesian Game Association (AGI), described Irene’s appointment as a major advantage for the local gaming industry, potentially enhancing collaboration between the public and private sectors.

He added that with her expertise and knowledge, Irene could help the government identify the industry’s key needs, such as talent development, infrastructure, and expanded market access. He was confident that she would strengthen her contributions to safeguard the interests of the local gaming industry.

Similarly, Shieny Aprilia, co-founder and CEO of the prominent game developer Agate, stated that Irene’s position as deputy minister was strategically important, as she would directly represent the creative industry in public policymaking.

With a deep understanding of the industry’s challenges and needs, Irene was well-positioned to help domestic developers compete more effectively and expand their games to international markets.

How to Capitalize on Indonesia’s Gaming Industry

The Indonesian games market generated a total revenue of USD 416.90 million in 2022. Over the following years, the market experienced steady growth, achieving an annual growth rate of 8.74% from 2022 to 2027, ultimately reaching an estimated USD 649.80 million by 2027.

In 2022, in-app purchases (IAP) contributed USD 287.50 million to the market’s revenue, while paid apps generated USD 6.98 million. Advertising revenue in the games sector reached USD 122.50 million, highlighting the importance of diverse revenue streams.

Game downloads in Indonesia surpassed 3.86 billion in 2022, with an average revenue per download of USD 0.11. On a global scale, China dominated the market, recording an estimated revenue of USD 62.86 billion in the same year.

These figures underscore Indonesia’s robust growth and potential in the games market, which is fueled by substantial earnings from in-app purchases, paid apps, advertising, and an impressive number of downloads.

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The Scope of the Gaming Industry in Indonesia

There are at least two major factors that boost the Indonesia gaming industry. Those are:

The Rise of Online Gaming

A major factor contributing to the growth of Indonesia’s gaming industry is the rising popularity of online games. The wider availability of the internet and the increasing use of smartphones have resulted in a significant rise in the number of online gamers in the country.

This shift has not only boosted the revenue of game developers but has also opened new opportunities for related industries, such as game publishers and advertisers.

Adherence to Local Context 

Another key reason for the gaming sector’s success in Indonesia is its ability to cater to local tastes and preferences. Many Indonesian game developers design games inspired by the country’s culture, folklore, and history, which appeal strongly to local players.

This approach has helped the industry establish a solid presence in the domestic market and attracted global attention, leading to the export of Indonesian games abroad.

The Future of the Gaming Industry in Indonesia: Challenges and Opportunities

Indonesia’s game industry encounters unique challenges and opportunities that align with global trends in this sector.

One of the challenges for Indonesia’s gaming industries is global competition that requires local developers to produce high-quality games with strong marketing and distribution.

Copyright protection and monetization are also key challenges, as developers must safeguard intellectual property and find ethical ways to generate revenue without compromising user experience. 

The Advantage of Investing in the Indonesia Gaming Industry

Despite the challenges, Indonesia’s gaming industry offers plenty of advantages, such as: 

Supportive Regulatory Scheme

The Indonesian government has introduced several initiatives to support the gaming industry. One key measure is the implementation of tax incentives under Government Regulation No. 45/2018, offering VAT relief to gaming companies that meet specific criteria to encourage investment and expansion.

The Ministry of Trade has implemented policies to limit game imports, further supporting local developers and shielding domestic companies from unfair competition.

Moreover, efforts to promote Indonesia’s gaming industry globally include the 2016 Indonesia Game Show (IGS), which showcased local games to an international audience and attracted interest from global and local developers.

Technological Advancement 

Technological advancement also offers Indonesia’s gaming industry a bright future. The expansion of emerging markets, particularly within the local area, allows developers to connect with a larger number of players domestically. 

Furthermore, integrating new technologies like artificial intelligence (AI) and virtual reality (VR) allows developers to craft more captivating and immersive gaming experiences.

New Business Model 

Another key opportunity for Indonesia’s gaming sector is the evolution of innovative business models. Developers can establish reliable and long-term revenue streams by implementing models such as monthly subscriptions or strategic in-game sales.

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Explore the Gaming Industry with InCorp

Indonesia’s gaming industry is showing strong growth and presents exciting opportunities for investors. With a vibrant market and increasing demand, the sector is poised for further development.

If you want to enter this dynamic industry, InCorp Indonesia is the perfect partner for your business expansion. We offer the following comprehensive services to help you set up your gaming business in Indonesia:

Fill out the form below to take the next step and invest in Indonesia’s gaming industry.

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

Get in touch with us.

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Frequent Asked Questions

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.