How Is the Government Supporting Vietnam’s Game Publishers?
Late in 2022, it is noted that Vietnam now ranks fifth in the Southeast Asian gaming market, pulling in revenue of more than $500 million. Besides, the industry is growing at its highest-ever pace. Indeed, it is proof that the Vietnamese gaming industry has grown very fast, powered by both local and international demand. But how is the government helping fuel this development?
Vietnam's government has framed the big potential of the gaming sector as one of the major contributors to the digital economy. It is proactive in taking steps toward the promotion and support of Vietnamese game publishers and developers. In this article, we will discuss several moves being taken by the government to support Vietnamese game publishers and what it might mean for the future.
Overview of the Rapid Growth of Vietnamese Gaming Industry
The gaming industry in Vietnam is growing incredibly, and according to statistics, it will reach $922.8 million by 2027. Mobile gaming drives much of this growth, as it's a category with the biggest chunk of the market.
This was not surprising, considering that, in 2022, Vietnam ranked number 15 in the global ranking of smartphone users, creating a high degree of favorableness for any mobile game developer. With the level of smartphone penetration, the ceiling for mobile gaming in Vietnam will indeed be pretty high, hence allowing room for innovativeness by Vietnamese game publishers.
Besides having a young and tech-savvy audience, Vietnam has a strong infrastructure capable of supporting advanced technologies. Regulatory bodies in the country have also played their role in offering policy support and encouraging collaboration with expanded infrastructure for the gaming sector. This makes Vietnam one of the most promising markets in the region, holding significant untapped potential.
Read more: Vietnamese Game Publishers: Success on the International Stage
Key Question: How Is the Government Helping Vietnamese Game Publishers Compete on the Global Stage?
To increase local talent, encourage innovation, and open the door to global partnerships, here are some forms of support from the Vietnamese government in encouraging the growth of the gaming industry in the country:
1. Special Consumption Tax Exemption
The most significant form of government support for the gaming industry has been the decision to exclude the sector from the Special Consumption Tax (SCT). Due to the potential health and social consequences, the Ministry of Finance initially proposed a special consumption tax on the gaming industry. However, the plan encountered fierce opposition from sector players who expressed that such a tax would hinder the growth of the sector.
The MIC fronted this exemption. During the Event Vietnam GameVerse 2024, the MIC looked back at the important milestones since 2019 in the country's gaming industry. It was, therefore, during this event that the decision not to apply SCT was sealed.
The government recognized the gaming industry's potential and the importance of investment and support for its future development. Industry experts were concerned that the SCT could negatively impact the gaming sector by slowing down its progress and unintentionally encouraging illegal gaming practices.
There were fears that the tax would place domestic companies at a disadvantage compared to international competitors operating within Vietnam, potentially driving local companies to move abroad to avoid these additional costs. Deputy Minister of Information and Communications Phan Tâm argued that applying the SCT could severely harm Vietnamese game companies while giving foreign firms a competitive edge.
The decision to exempt gaming from the SCT has allowed the industry to flourish without the burden of heavy taxation, which could have stifled growth. The gaming sector positively contributes to various areas such as information technology (IT), content creation, design, advertising, hardware production, and telecommunications, making this decision pivotal for the country's broader economic development.
2. Tailoring Tax Incentives for the Gaming Sector
Along with exempting the industry from the Special Consumption Tax, the Vietnamese government is trying to develop certain tax incentives to support the gaming industry further. The development of specific tax policies to support the gaming industry has been assigned to the Ministry of Information and Communications; further, customized tax policies are suggested to benefit Vietnamese game publishers.
These new incentives will lighten the burden on game developers so they can invest more in research and development, hire more talent, and work harder to attain innovation in projects. The government gives these incentives to create an environment of competitiveness whereby the local game companies are encouraged to innovate and fight not only in the domestic market but on the international level as well.
3. Supporting the Growth of eSports
The government actively develops eSports as an industry that, during the last decade, has really gained a foothold. More recently, Vietnamese teams have grown from just being regional contenders to competing on the global stage.
One milestone for Vietnamese eSports came when, in the 31st SEA Games, the Vietnamese delegation in eSports won four gold medals and three silvers. These achievements illustrate the increasing international prominence of Vietnamese eSports players.
Recognizing this potential, the government has been supporting the growth of eSports by improving infrastructure, encouraging collaboration between teams, sponsors, and developers, and providing additional opportunities for professional gamers. As a result, gaming-related careers, particularly in eSports, are becoming increasingly popular in Vietnam.
Read more: Famous Games from Global Vietnamese Game Publishers
4. Partnership with Leading Vietnamese Game Publishers
Another key way the government supports the industry is by working closely with major Vietnamese game publishers to enhance the development of eSports and the wider gaming sector. The establishment of the Vietnam Esports and Entertainment Sports Association (VIRESA) is a prime example of this collaboration.
VIRESA actively partners with prominent publishing companies such as VNGGames to host large-scale tournaments. A notable recent event was the League of Legends Friendship Tournament between teams from Korea and Vietnam, held in September 2023. Through these government-backed efforts, not only does the eSports scene benefit, but Vietnamese publishers and players can also gain significant visibility on the global stage.
5. Collaboration with Universities to Foster Talent Development
With a full understanding of the increasing importance of talent and innovation within the gaming industry, the Vietnamese government has also channeled its efforts into working with universities and educational facilities. This kind of entrepreneurial drive and innovative ingenuity describes the Vietnamese developers, where games like Axie Infinity rake in billions.
Companies like Amanotes, Topebox, and OneSoft are constantly innovating their offerings to stay competitive in the global market. Moreover, the government has collaborated with top universities and research institutes to enhance education opportunities for both Vietnamese game publishers and developers, ensuring a steady supply of skilled labor.
Universities like Hanoi University of Science and Technology, FPT Polytechnic College, and RMIT University have introduced specialized degrees in game design and related fields. The increasing number of such programs allows more Vietnamese students to pursue studies in computer science, programming, and game development. Wrap-Up
In short, the Vietnamese government has played a crucial role in fostering the growth of its gaming industry. From collaborating with major game publishers, supporting eSports, and investing in education. By providing these essential forms of support, Vietnam is positioning itself as a key player in the global gaming market, allowing Vietnamese game publishers to innovate and compete on the world stage.
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