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Why are Gaming Companies Flocking to Malaysia? (Updated for 2024)

The global gaming industry is experiencing unprecedented growth, with the Asia-Pacific region leading the charge. In this era of digital transformation, Malaysia has emerged as a focal point, driven by its strategic initiatives and unwavering commitment to fostering creativity and innovation. This article explores why gaming companies are increasingly choosing Malaysia as their preferred destination and how the nation's ambitious goals align with the mission of GP Outsourcing Asia Sdn Bhd.

Why are Gaming Companies Flocking to Malaysia?

What's in this Article

Why Malaysia Stands Out Among the ASEAN Market

Gaming's popularity in Southeast Asia, including Malaysia, has garnered global attention. Despite the industry being led by powerhouse nations like the US, China, and South Korea, Malaysia's gaming industry is making waves. Currently the third largest in Southeast Asia, its estimated value is projected to reach US$1 billion (RM4.69 billion) according to growth trends. With more than 14 million gamers, Malaysia has the best potential to lead the development of esports in the region. Annual Growth Rate is set to grow by 12.1% as of 2023 (Statista, 2023)

Why Malaysia Stands Out Among the ASEAN Market

Global gaming giants are recognizing Malaysia's potential, and the country has become a rising star in the ASEAN gaming market. The strategic location, a pool of talented professionals, and robust government support are drawing companies eager to be part of Malaysia's gaming success story.

Strategic Hub in Southeast Asia

Malaysia's geographical advantage is a game-changer for the gaming industry. Positioned strategically in Southeast Asia, it provides unparalleled access to key markets. Companies setting up base in Malaysia find themselves seamlessly connected to the vast gaming communities across Asia (Acyxn, 2023).

Strategic Hub in Southeast Asia

Business-Friendly Policies and Incentives

Malaysia is not just a location; it's a business haven. The government's forward-thinking policies, coupled with attractive tax incentives, create an environment conducive to growth. The Malaysia Digital Economy Corporation (MDEC) has been a linchpin in this transformation, spearheading ambitious initiatives like the metaverse project. This initiative extends beyond the conventional, positioning Malaysia as a global gaming hub capable of attracting international studios and investments, thereby fueling the nation's digital growth.

Ramona Azween, professional CS:GO player and member of the blueprint task force committee.
Ramona Azween, professional CS:GO player and member of the blueprint task force committee.

The Youth and Sports Ministry's Strategic Plan for Esports Development 2020-2025, backed by a RM10 million investment from Budget 2019, marks the first-ever annual budget announcement in Southeast Asia focused exclusively on esports development.

Several key events in recent years have been a testament to this commitment:

Malaysia's Talent and User Reservoir

The heart of any successful gaming company lies in its talent pool. With over 14 million gamers and unwavering government support, Malaysia is poised to lead esports in the region (The Malaysian Reserve, 2023). The local education system plays a pivotal role in nurturing a workforce that aligns seamlessly with the dynamic needs of the industry.

Malaysia's Talent and User Reservoir
Key Consumer Insight for Esports by The Malaysian Reserve

Associate Professor Ts Dr. Tan Chin Ike, Head of the School of Computing at Asia Pacific University of Technology and Innovation (APU), asserts that esports is a thriving global industry characterized by competitive play among skilled video gamers:

"Malaysia has the infrastructure, enough talent pool and support to grow as a centre in SE Asia both in competitiveness and content development. With the rise of mobile gaming, network availability and esports, anyone with a smartphone can play games at anytime, anywhere"
Tan affirms that Malaysia possesses the necessary infrastructure, an abundant talent pool, and ample support to emerge as a focal point in Southeast Asia, excelling in both competitiveness and content development.
Tan asserts that Malaysia has the infrastructure, talent, and support to thrive as a key hub in Southeast Asia for both competitiveness and content development.

Infrastructure: Powering Up for Success

To thrive in the gaming industry, state-of-the-art infrastructure is non-negotiable. While Malaysia has the infrastructure and talent pool to thrive in esports, challenges remain. Stable and affordable internet connectivity is crucial, but with the government's allocation of RM13 million in Budget 2023 and the rise of 5G, the industry is optimistic about overcoming these hurdles (The Malaysian Reserve, 2023).

Infrastructure: Powering Up for Success

Gaming Giants that Found a Home in Malaysia

Dubai-based esports and gaming giant, Galaxy Racer, recently announced a monumental investment of $10 million into the Malaysian esports ecosystem. This strategic move includes investments in esports competitions and events, alongside the construction of a new regional headquarters for the Asia Pacific region in Malaysia (Source: Šimić, 2022).

Galaxy Racer
Galaxy Racer

This initiative is set to unfold over the next five years, solidifying Galaxy Racer's commitment to Malaysia and creating a collaborative bridge between the private sector and the government. The Memorandum of Understanding exchange in Dubai formalized the collaboration, showcasing a shared vision for Malaysia's gaming future (Source: Šimić, 2022).

Paul Roy, the founder and CEO of Galaxy Racer, expressed confidence in Malaysia's potential, stating,

"We are excited to establish our APAC headquarters in Malaysia and we appreciate the support by MDEC and KKMM in facilitating foreign direct investments into Malaysia"

Other companies that have a presence in Malaysia include:

  1. Riot Games (e.g. League of Legends)

  2. Electronic Arts (EA; e.g. FIFA series and Apex Legends)

  3. Ubisoft (e.g. Assassin's Creed, Far Cry)

  4. Activision Blizzard (e.g. Call of Duty and World of Warcraft)

  5. Twitch

  6. Nintendo

  7. Sony Interactive Entertainment

  8. Epic Games (e.g. Fortnite)

  9. Tencent Games (e.g. PUBG)

  10. Playstation

  11. Microsoft

  12. Capcom (e.g. Resident Evil and Street Fighter)

  13. Game Taiko Sdn Bhd

  14. Gameka Sdn Bhd (935693-A)

  15. Appxplore Sdn. Bhd

  16. Magnus Games Studio Sdn Bhd

  17. Agmo Studio Sdn Bhd

  18. Bandai Namco Studios Malaysia Sdn. Bhd.

  19. and more!

Recent Updates from 2024

Government Backing for a Gaming Hub in Budget 2024

The announcement in Budget 2024 by Prime Minister Datuk Seri Anwar Ibrahim earmarking RM30 million to promote Malaysia as an esports industry hub is a watershed moment. The Communications and Multimedia Ministry, led by Minister Fahmi Fadzil, sees this as a pivotal step toward establishing Malaysia as the gaming hub of South-East Asia (Bernama, 2023).

Minister Fahmi Fadzil identifies the budget allocation as a game-changer, specifically for MDEC (Malaysia Digital Economy Corporation). The move aims to entice international video game companies, including South Korean giant NX3 Games, to set up offices in Malaysia. With RM30 million dedicated to fostering the esports industry, Malaysia beckons as a lucrative investment destination. NX3 Games, for instance, renowned for games publishing, research and development, and content design, has expressed its interest in establishing a regional head office in Kuala Lumpur (Bernama, 2023).

Other than the RM30Million, the Communications and Multimedia Ministry in Malaysia has invested a further RM400 million-- a substantial investment in the country's digital landscape. This infusion of funds, totaling RM2.85 billion, is expected to yield significant returns for the people and, by extension, for businesses exploring the Malaysian gaming ecosystem.

E-Sport Backing from the Director of Digital Content Development, MDEC (Government Agency) and Major Esports Companies

MDEC has been at the forefront of Malaysia's digital transformation for 27 years. Over the past decade, esports, in particular, has seen remarkable development, propelling Malaysia to prominence in competitive gaming. Recognizing esports as a legitimate activity by the Ministry of Youth and Sports in 2017 was a pivotal moment, catalyzing government support and substantial investments.

Mobile esports, with games like Mobile Legends: Bang Bang and PUBG Mobile, has experienced phenomenal growth. Professional esports teams and corporate sponsorships have propelled Malaysia into the global esports spotlight, with notable achievements like the USD10 million investment from Galaxy Racers in 2022.

Galaxy Racer investment in Malaysia
Galaxy Racer’s investment in Malaysia (Image credit: Galaxy Racer)

“The market and ecosystem for sports+entertainment has exploded in the era of digitalisation, social media, online engagements, consumer demand and even cultural activism. Growing connections to commerce, music, movies and TV shows have reaped tremendous benefits for numerous industries. This includes esports, with vast potential that can span across platforms for skills development, content creation, entrepreneurship and community building, amongst others. Through strategic collaborations with industry stakeholders, educational institutions and esports organisations, this new and ever-changing sports environment cultivates and fosters talent, empowers aspiring gamers, and is able to position Malaysia as a regional esports powerhouse.”

FYI: Ensuring Responsible Growth in Esports

As the esports industry burgeons, Malaysia acknowledges the need for responsible growth. MDEC emphasizes key areas:

  1. Player Well-being: Ensuring the physical and mental well-being of esports athletes is paramount. Access to healthcare services, mental health support, and promoting healthy gaming habits are priorities.

  2. Inclusivity and Diversity: Fostering an inclusive environment is crucial. Malaysia aims to encourage diverse participation, addressing gender disparity for equal opportunities.

  3. Regulatory Framework: The evolving esports industry demands comprehensive regulations to govern contracts, team management, intellectual property rights, and fair competition.

  4. Cybersecurity and Ethics: With the rise of online competitions, Malaysia emphasizes cybersecurity measures and ethical guidelines to protect player and fan privacy.

MDEC's recent decision to combine forces with Acxyn to attract international game studies and investments

In a strategic move to elevate Malaysia as a global gaming hub, Malaysia Digital Economy Corp (MDEC), as the government agency driving the digital economy, has taken a visionary step by allocating RM750,000 to Acxyn, a pivotal player in the metaverse space. This collaboration signifies a profound commitment to position Malaysia at the forefront of the global gaming landscape (Yulolo, 2023).

Acxyn's CEO, John Schneider, expressed enthusiasm about Malaysia's unique position to attract foreign game development companies. He highlighted the shared vision with MDEC for a future where game intellectual property (IP) can fully realize its economic potential, establishing Malaysia as a hub for innovation and excellence in the gaming industry.

For stakeholders in the gaming industry, MDEC's collaboration with Acxyn signals a green light for establishing a presence in Malaysia. The government's proactive support and investment in the gaming ecosystem create a fertile ground for companies looking to tap into the vast potential of the Malaysian market.

Conclusion: A Bright Future for Gaming Companies in Malaysia

The confluence of government support through Budget 2024, burgeoning gaming ecosystem positions Malaysia as a compelling choice for global gaming companies. The strategic allocation of funds and the focused efforts to make Malaysia a gaming hub signal not just a national aspiration but a concrete plan to unlock the full potential of the gaming industry in the region.

As the gaming industry finds a new home in Malaysia, GP Outsourcing Asia Sdn Bhd stands ready to be your partner in this exciting journey. For companies seeking to send their home country employees to Malaysia while no subsidiary is setup yet, we provide Employer of Record Service (EOR: A service that allows you to park your employee under us which allows for legal compliance with the government). Alternatively, if you seek to employ foreign employees in Malaysia, we also provide visa services under our EOR service to help you expand your business! Explore the possibilities, seize the opportunities, and be part of Malaysia's gaming renaissance.


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