February 2021 will mark the 19th year of Niko’s research, analysis and insights on the videogame markets of Asia. Our first study on China’s games market was published in 2002. Since then, our coverage has expanded to: Mainland China, Chinese Taipei, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Thailand, and Vietnam. Niko analysts are dedicated every day to tracking and analyzing all aspects of videogames, esports, and streaming in Asia.
At the start of each year, we put out a list of predictions for Asia’s games market. Here are our predictions for 2021:
1. Gamers’ spending and engagement will exceed pre-pandemic level
The Covid-19 pandemic has had significant impact on gaming behavior, usage and spending as people immerse themselves in virtual worlds because the real world is off limits. We predict that people who discovered gaming in 2020 will continue playing, and based on results of Niko’s Covid-impact surveys of Asia-based gamers, experienced gamers who increased gaming time will spend more time and money on games in 2021 than they had pre-pandemic.
2. Cross Platform + Cross Play will become more important
Games that can be played across multiple platforms have a higher chance of success and titles, such as MiHoYo’s Genshin Impact, showed just how important a cross platform approach can be for core games. 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.
3. Increased M&A and investment, leading to further consolidation
2020 was a big year for videogame industry M&A activity in Asia. In 2021 we expect to see increased investment from the largest gaming and tech companies in China and Asia, especially from firms such as Tencent, Bytedance, Alibaba and Sony as the value of gaming IP and talent increases and firms look to build out strong portfolios and teams.
4. Cloud Gaming will increase its legitimacy and viability
We dubbed 2020 “Year 1” of 5G cloud gaming in Asia, as several gaming and tech firms announced that they would build cloud gaming platforms and services. We expect these cloud gaming platforms to start acquiring users, experimenting with various business models and expanding to multiple platforms as they start to build a complete cloud gaming ecosystem.
5. Next gen consoles will launch in China as Nintendo gears up for a new Switch SKU
Sony and Microsoft launched new consoles at the end of 2020, with both selling out instantly. We expect companies to launch their consoles in Mainland China this year. We also expect Nintendo to unveil a new and more powerful SKU for the Nintendo Switch. We expect the Nintendo Switch and PlayStation 5 to be the best-selling consoles in Asia during 2021.
6. Steam Platform will finally launch in China this year
Valve and Perfect World announced in 2018 that the two companies would bring Steam to China in an official capacity, and we expect the platform to launch this year. It is unclear what will happen to the international version of Steam, which is currently accessible without a VPN, once that occurs.
7. There will be a higher number of import games approved in China
We are hopeful that that increased standardization of the approval process and other policies will allow the regulator to approve more foreign games in 2021. We currently expect more than 1,500+ domestic and import games to be approved by the NPPA (China’s games industry chief regulator) in 2021, which is higher than 2020.
8. Bytedance will become a growing player in the Asia games market
Bytedance will become a notable player in the Asia games market as it begins to publish both core and casual games from third party developers, ramps up internal game development, and leverages its success in the short video space to acquire users.
9. Singapore will solidify its presence as a regional hub for gaming companies in Southeast Asia
Political and economic stability, infrastructure development, and supportive governmental policy make Singapore a great Southeast Asian regional hub for companies, and we expect games companies to set up operations there in earnest in 2021. While Singapore’s strength as a regional hub has been true for a long time for many industries, we note a pronounced increase of game companies following suit, including in 2020 Tencent, ByteDance, and Riot Games.
10. Japan will build out its esports scene
Japan is an anomaly in the Asia-10 region as the country’s esports scene has yet to evolve, due to laws and regulations that equate esports tournament prizes with gambling, and the small number of Japanese games that are played in esports. Japan’s Consumer Affairs Agency has recently stated that esports prize pools are work compensation, not gambling prizes, and other domestic institutions are pushing forward to create a bigger esports scene in the country. This should cause a livelier esports scene to emerge in Japan this year.
Check our predictions for 2020 here and see how we did.