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Friday, March 7, 2014

Indonesia; the burgeoning frontier of game development

Feature by Matt S.

Indonesia has a population of 249.7 million (July 1, 2013), making it the fourth most populous nation in the world after China, India, and the United States. It’s a member of the group of G20 nations with the 16th largest economy in the world, and while its economy’s growth slowed in 2013, it’s still one of the fastest growing in the South East Asia region at around six per cent.

Game developers within Indonesia seem to have benefited from this growth in economic power, with the massive population now supporting a small and young, but growing games industry. Driven by the growth of Web gaming, free-to-play experiences and mobile app stores, Indonesia has seen an explosion of independent developers of all sizes. Each year brings multiple new microstudios of 1-5 people, while some of the older studios such as mobile and browser game developer, Agate, have grown to become medium-sized companies in their own right (Agate is Indonesia’s largest developer currently with around 70 people on staff).

Multinational interest in Indonesia is perhaps the strongest sign that it’s a market growing in importance. Recently both Gameloft and Square Enix have set up Indonesian studios. While these studios are new, it seems likely that they will be turned to either outsourcing projects (it’s cheap to do business in Indonesia, so large studios might outsource the development of certain assets for their AAA-games to the local studios), or potentially these studios could join those set up in Singapore as key regional suppliers for locally-developed games.

After all, just as in cinema there are large markets of people who prefer to consume locally-developed content than Hollywood blockbusters (think of Bollywood in India), the games industry is going to have markets where locally-developed games resonate more strongly with their audiences than the latest Activision spectacular. Traditional publishers are busy setting up studios in places like the Middle East and South East Asia in anticipation of this trend.

Sengoku IXA; Agate Studio

For all the positive signs around game development in Indonesia, it is in in many ways still a wild frontier of game development. Piracy is rampant, localisation of games into a native Indonesian language is largely non-existent, and most tellingly, it’s much more difficult for a local studio to produce a console game. Sony, Nintendo and Microsoft simply do not recognise developers from Indonesia, and so to publish a game on these consoles the developers need to do so without formal support from the console manufacturers, and through an overseas publisher.

Where it all started; Perth, Australia

According to Kris Antoni, representative for the Indonesian arm of the International Game Developer’s Association (IGDA), the Indonesian games industry can be traced back to a single developer with a strong link to one of the most obscure centres for game development in Australia.

“The first game developer in Indonesia was Matahari Studios, established in the mid-late 1990s,” Antoni said. “That company was a subsidiary of Perth’s LAI Games, and it focused on developing coin-operated arcade games for Timezone, which was also owned by LAI Games.”

Matahari Studios was also actively engaged in outsourcing, and had completed projects for some of the largest game developers in the world, including Codemasters, EA, Sony and Take-Two. At its height the company also had regional offices in other emerging nations such as Philippines, but ultimately the collapse of the arcade business also led to the closure of the studio in 2010.

“It was unfortunate that the company was shut down,” Antoni said. “Even so, Matahari Studios gave birth to a lot of game developer talent. Many of Indonesia’s game studios and developers can be traced back to people who worked in Matahari Studios over its years.”

Unfortunately, despite a major studio injecting talent and experience into the market, and subsequently cultivating a small development community, the Indonesian market has remained a challenging one in recent years, with very minimal support. “The local game publishers prefer to license games from China, Japan or Korea than invest in local developers,” Antoni said. “A lack of government support towards the local creative industry is also a huge challenge that needs to be addressed as soon as possible.”

Celestian Tales: Old North; Ekuator Games

That lack of a support infrastructure has limited the rate of growth of the development side of Indonesia’s games industry. In some areas, Kickstarter and other crowdfunding resources have been able to step in to help mitigate the lack of formal support, but Indonesian studios often struggle to capitalise on crowdfunding as well. Kickstarter is only available to residents of a select few nations (the US, UK, Canada, Australia and New Zealand), making it problematic for an Indonesian developer to run a Kickstarter and while there are alternatives such as Indiegogo, the local consumers themselves are not big fans of paying upfront for games.

In addition to the issues around piracy, what’s popular in the Indonesian market at the moment is free-to-play games and genres such as League of Legends and MMORPGs. The idea of asking an Indonesian consumer to trump up the equivalent of $20 or so for a game is not an overly popular business model in the market, so Indonesian developers find themselves needing to try and appeal to a global audience instead.

And that’s difficult if you’re a typically small developer from a culture such as Indonesia’s which is fundamentally different to the western cultures that you're trying to appeal to.

Successfully funded

With that said, despite the challenges in getting funding at home, Indonesian developers are successfully reaching out to those global audiences. Digital Happiness, an independent studio based in Bandung, successfully ran a crowdfunding campaign for DreadOut, a survival horror game for PC that takes inspiration from the likes of Tecmo Koei’s classic Fatal Frame franchise.

The Indiegogo push was a driven by a sense of “desperation,” Rachmad Imron, the game’s producer, admitted. “We thought it would help get us past the Greenlight process on Steam,” Imron said. “By the time we had finished the prototype build we were also running out of money, so we needed to work out a way to get more money in and grow our team large enough to work on the game properly.”

“It’s a very humbling experience that we managed to surpass our funding goal and get greenlit on Steam. A lot of crowdfunding success depends on being an influential figure and have a great portfolio of work, and we came from nowhere. Now our team has expanded to 17 people and we’re right on track for the game.”

For a team that prior to the Indiegogo campaign was just four people, DreadOut’s success has exposed the team at Digital Happiness to another quirk in the Indonesian market; finding the right talent to quickly increase the size of the studio can be a problem.

“There’s a lot of great talent in Indonesia, but when there’s no real industry supporting it, most of the talent either leaves to work in games overseas, or joins an animation company,” Rachmad said. “It’s not a bad thing to be a database programmer or work for an advertising agency, but I think it is a waste of their talent if they do end up working there if they want to make games.”

DreadOut concept art; Digital Happiness

Another small independent studio, Ekuator Games, also looks on track to hit its crowdfunding goal and produce an classical JRPG-style title called Celestian Tales: Old North. Looking for $30,000, at time of writing it is a little over $22,000, with 26 days to go yet. It earned 10 per cent of its goal in just the first hour. It’s running its campaign on Kickstarter, thanks to a connection that the game’s producer, Cipto Adiguno, has in New Zealand.

But it hasn’t been an easy process. This is, in fact, the second attempt at Kickstarter for the team at Ekuator games, with the first falling short having received only a little over half of the funding goal, and Adiguno said the only way that the game is going to be able to be published is with a successful crowdsourcing campaign.

“The biggest thing crowdfunding gave us is not money – which was important too, for sure – but what was really important was the people. People who believe in our vision and are willing to contribute to it,” Adiguno said. “People who stay with us on the entire course of the game's development. People who will tell it straight to our face when we make mistakes, and help us to correct it. This bond is something you can't get from a single investor or a publisher giving you funds. The fulfilment of having others sharing the spirit is what has kept us going so far.”

“Many of those who have been following us since the first Kickstarter say that it’s our sheer determination that has kept them with us. To have our first Kickstarter fail was difficult, but it was important that we didn’t give up and come back with an improvement to the game itself,” Adiguno said.

Looking to the future

For Indonesia to continue to grow as a market for games, the piracy concerns need to be managed, or the larger publishers won’t put much energy into the market despite the size of the population or the growing incomes that Indonesians have. The local developers have worked out ways to manage the business challenges of rampant piracy, but global developers and publishers less familiar with the market will not be able to capitalise on it in the same way.

It’s key to remember the frontier town is the best analogy to think of Indonesian game development. Key to keeping a game development or publishing business going in Indonesia is about expecting the least support from your customers. They’re tough to please and going to be looking to take advantage of you if you let them. It’s a similar theme to most markets for games in the world, but it’s more extreme in Indonesia, and they’re quite open that that’s the way things are done.

Infectonator 2; Toge Productions

Local developers understand how to make the most of a hostile environment in a way that outsiders might not, and they’re getting better at it. “Local game developers have learned to use piracy to their advantage by using it as a free marketing or distribution tool. They let their games get distributed by the pirates, thus creating some market awareness. And sometimes, these pirated copies still generate advertising and in-app purchase revenue,” IGDA Indonesia’s Antoni said.

“With more people adopting Steam, we see more people are starting to purchase original games especially during the sales. In fact, buying a game during a sale can sometimes be cheaper than buying pirated DVD copies.”

From the development side of things, the console manufacturers will need to start recognising that games can be produced within Indonesia. Mobile and free-to-play PC games currently dominate the space with Indonesian developers because those are the games that they’re able to produce and that’s what the local market plays.

But Indonesia holds all kinds of potential to foster a massive games development industry. It’s inexpensive to produce games there, there’s an abundance of talent that’s currently working outside the industry in other fields or is under-utilised, and unlike some other secondary markets, the Indonesians are perfectly comfortable with games being developed and played in English.

“I think there are lots of opportunities for foreign games in Indonesia. Almost all games in Indonesia are in English (because most of them are pirated as is). Sometimes playing localised games can even be awkward because we are so used to playing games in English language. If your game is in English, it'll be fine,” Antoni said.

- Matt S
Editor-in-Chief
Find me on Twitter: @digitallydownld
Indonesia; the burgeoning frontier of game development
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