• Games, music and videos: Malaysians go digital for entertainment
In order to understand how much Malaysians have shifted their entertainment habits to the digital world, we should first look at our gaming industry and how much it has changed in the past decade.
In the past, consumers mostly purchased games as physical copies from stores to be played either on their PCs or their purchased game consoles. These purchases contributed to our tax revenue as they were taxed just as any other merchandise sold within the country.
However, this is no longer seems to be the case as our local gamers have shifted their game purchasing habits away from traditional boxed and console games to digital copies of games from digital distribution platforms such as Apple App Store, Google Playstore and Steam.
In a report by The Malaysian Reserve (TMR), marketing analyst Newzoo reported that Malaysians had outdone all our Asean neighbours in terms of spending for online digital games with an estimated 14.0 million gamers in Malaysia spending a total of US$587 million or RM2.45 billion in app purchases, game purchases or downloadable content.
And Malaysia landing itself in the 21st spot of digital gaming markets around the world is expected to continue growing as the entire Southeast Asian region is expected to grow at an annual growth rate of 25 per cent up to 2020.
According to the report, Newzoo’s gaming market consultant Tom Wiiman guided that the most surprising statistic from their findings was that about half of the generated revenue or RM1.24 billion was on mobile games alone and that this followed the global trend.
“Digital game revenues will account for US$94.4 billion, or 87 per cent, of the global market – highlighting mobile to be the most lucrative segment, with the smartphone and tablet gaming industry growing 19 per cent
year-on-year (y-o-y) to US$46.1 billion, claiming 42 per cent of the market.
“The mobile gaming industry will represent more than half the total games market by 2020,” said Newzoo.
And with mobile game purchases not being taxed, this is a huge piece of the pie that the government is missing out on.