Niko Partners’ research shows Southeast Asia has become a fast-growing region in the games industry. Gaming, especially esports, has become a significant component of mainstream entertainment in Malaysia’s gaming industry.
Among the six countries Niko Partners tracks in SEA, Malaysia has become a standout in the industry thanks to game industry stakeholders, including the government, who are taking initiatives to provide programs for games and esports talent.
Malaysia’s Ministry of Finance announced a MYR 30 million (USD 6.3 million) budget to encourage foreign games and esports companies to invest in Malaysia.
According to Niko Partners’ article, Australia-listed game developer iCandy Interactive acquired Lemon Sky Studios for USD30 million, and Common Extract was acquired by Swedish studio The Gang for an undisclosed amount.
Malaysia’s support for developing AAA games also plays a significant role in the region, with games like Street Fighter 6, Overwatch 2, Final Fantasy XV, Cyberpunk 2077, Death Stranding, Spider-Man Remastered, The Last of Us: Part 2, and Elden Ring all getting support from Malaysia’s game companies.
Challenges in Malaysia’s gaming industry
There are three main challenges Malaysia’s gaming industry faces in the current environment. Rising job insecurity is on top of the list, as the games industry worldwide has experienced rapid growth during the pandemic, and now it’s returning to a more regular pace.
Another challenge is the older generation’s opposition to video games and esports, which they perceive as negatively affecting youth. Finally, the last challenge is the lack of expertise and experience in the games industry. Malaysia still lags behind industry giants like China, Japan, and South Korea regarding expertise and experience.
Despite these challenges, significant investments and businesses opened in the country, such as US-based game commerce and payment company Xsolla and UK-based game developer and publisher Double Eleven, opening studios in the country.
Future in Malaysia’s gaming industry
According to Niko Partner’s report, Malaysia’s gaming industry has grown by 8.9% on average since 2023. Malaysia shows great potential, especially in the esports industry, and continues to pique interest from foreign investors.
