Due to the expected growth of the gaming sector, companies like TikTok, Facebook, and Netflix are trying to launch games on their platforms. By 2026, the Southeast Asian video game market is expected to be worth $7.39 billion USD. Mobile gaming represents the largest segment, reaching a market volume of $3.95 billion USD in early 2022.
According to a Reuters report, the TikTok gaming push is starting in Vietnam—a country with a primarily young, tech-savvy population that spends lots of time online. According to rumours, the company has tested the ability for customers to play games within its app. TikTok in-app games are expected to improve advertising income and increase the duration users spend on the app.
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The gaming feature should be available to TikTok users in Southeast Asia as early as the third quarter of 2022. According to Reuters, a source within the company stated that TikTok intended to partner with third-party game developers and studios such as Zynga Inc. to introduce minigames to its platform, powered by the HTML 5 programming language for web pages.
Potential types of games available on TikTok
In a statement emailed to Reuters, a TikTok representative said the company was always looking to enrich its platform and bring value to its users. In May, TikTok, owned by ByteDance Ltd. (a Chinese technology company operating creative content platforms), became the event supporter for the 31st Southeast Asian (SEA) Games, held in Hanoi, Vietnam. It planned to offer a gamified experience while covering the games, ensuring fans could interact, engage with millions of users, or share effects, such as confetti.
Currently, the TikTok community can watch games streamed on the app but cannot play them unlike users of TikTok’s China-only counterpart, Douyin, who have been able to play on the app since 2019. In the US, TikTok launched a few games, such as the Garden of Good, whereby players care for a garden and can trade their amassed points for a TikTok donation to the Feeding America non-profit organisation. Another game is Zynga’s Disco Loco 3D, involving dancing and music challenges, which is very on-brand for the platform made famous by its challenges.
Impact on Southeast Asia’s gaming industry
Asia-Pacific (APAC) is home to over one billion gamers across a wide range of age groups playing various online games. Furthermore, by 2025, the region would have 3,339.07 million smartphone internet users. These statistics show that TikTok has a viable market that should deliver increased revenues.
China is the leading mobile game publisher in the region through Tencent Mobile Games, but Singapore’s Garena Free Fire game was one of the highest-grossing mobile games last year. Advances in technology and digital literacy in the region could spur the growth of better and more engaging games, which may suit the needs of TikTok.
One potential obstacle limiting TikTok’s plans is the slowdown of investments and advertising purchases due to global economic uncertainties. The global economy is still being affected by new bouts of the COVID-19 virus, and the Russia-Ukraine war has taken its toll because it has hindered energy supplies. Market fluctuations have also affected investors’ desire to provide funds that may help gaming companies.
Blockchain-based games, such as Axie Infinity, might pose a significant threat to the viability of TikTok’s minigames. Thus far, blockchain games have provided greater value because they have enabled players to acquire tokens and convert them into cryptocurrency. While TikTok’s advertising revenue is still rising—tripling to more than $11 billion USD, according to Reuters—the attempt to increase revenue through gaming may be much more challenging than initially thought.
Future of TikTok in-app games
Launching games may also be difficult because TikTok will require licence approval from the authorities that restrict games depicting violence, gambling, and sex-related content. According to a Reuters source, they believe the game-registration process to go smoothly as their games would not be controversial.
Last year, TikTok’s parent company, ByteDance, acquired Shanghai-based gaming studio Moonton Technology, which could mean the app may profit from the alliance. The purchase will put ByteDance in direct competition with Tencent, which may encourage innovative gaming solutions for customers.
If TikTok successfully monetises the minigames, new startups in financial technology (fintech) will emerge to meet customer needs. As the requirement for fintech solutions increases and they manage to engage with more consumers, the gaming industry in Southeast Asia will benefit.
The TikTok gaming push is a welcome effort that will change how people use their smartphones when browsing the internet. They will be able to play fun games that they can also share with their friends.
Even though advertising revenue for TikTok is likely to grow, challenges, such as the Russia-Ukraine war, may affect ad purchases. Nevertheless, TikTok in-app games will probably deliver significant revenue if sufficient purchasing options and in-game products exist.