Malaysia is a rapidly developing SEA country where the gaming market is expected to show a CAGR of 7.9% in 2023-2028 so that the game revenue will increase from 588 million USD to 860 million USD in this period.
From Outsourcing to Creating Own IPs
According to interviewees, Malaysia is the busiest place in the SEA region. Since the 90s, the country has been an outsourcing center. There are a lot of art houses that worked on games with high-quality graphics like Street Fighter and Mortal Kombat. Besides that, Malaysian developers participated in the creation of Last of Us and made cinematics for Riot Games. Interviewees are sure that outsourcing can bring developers high income and reputation, but there is pretty tough competition and less opportunity for creativity than in making their own games. To overcome these problems, international companies like Zempot which has a branch in Malaysia strive to provide better conditions for workers by giving them opportunities to show their talent and creativity.
YJ Jin, VP of Business, and Jannessa Jimmy Yangus, Service Strategy Planner at Zempot Malaysia
In Malaysia, the gaming industry is keenly centered on development, nurturing skilled talents who will eventually forge their own paths and create distinctive games. While solely engaging with Malaysia as an outsourcing partner may constrain the creative potential of local talent, the accumulation of skill and experience sets the stage for a vibrant future.
Gradually, indie studios began to appear in Malaysia, and now the country has a mix of AAA companies and small studios. Besides big players like PlayStation, Streamline Studios and Bandai Namco, smaller studios like Larian, Kaigan Games, Metronomik, and Kurechii have also gained popularity here. Although creating IPs is a risk, now there are more and more skilled talents who are ready to develop something unique. Interviewees noticed famous Malaysian IPs such as Baldur’s Gate, Postknight, Re:Legend, No Straight Roads, and GigaBash.
Alitt Khaliq, General Manager at NX3Games
There's a huge appetite to level up beyond just servicing. For instance, you can see Passion Republic building their own product GigaBash as a small-size coop game. Another example is Lemon Sky which has a new IP in SEA. Both studios are still maintaining their servicing. Alitt sees that these companies want to build products but they would also be learning a lot through their journey.
Mobile Games are at the Top
From our interviews, Malaysia is a centric location of mobile games. In 2023 the mobile games sector brought in 0.3 billion USD. It’s also expected that this figure will increase by 33% by 2028.
However, interviewees are sure that PC and console games are also becoming popular because PlayStation and Steam are widespread in Malaysia.
Danielle Ray, Narrative Designer at Metronomik Sdn Bhd
Until recent times, Malaysia has mostly been a mobile-centric location. Companies tend to mostly make mobile games but there are also big platforms like PlayStation and Steam that are growing more popular here.
Important Aspects Before Opening a Branch or Targeting Malaysia
Malaysia is recognized for its highly proficient talent in the gaming sector. Universities, art schools, and colleges provide students with cutting-edge expertise and skills in game development, design, and art. These well-rounded graduates subsequently become valuable employees of game studios.
Aisyah Ambok, Women in Games WIGJ Ambassador/Leadership team
There are courses that offer art degrees in 3D modeling, animation, illustration, and concept art. For example, The One Academy (TOA), an art college based in Kuala Lumpur, works a lot with local studios so that graduates can easily find work at these companies.
Moreover, Malaysian gamers tend to favor games that are successful in the West. As a result, many developers target their games to other countries to ultimately reach both local and foreign players. This could be another advantage for game studios wishing to open a branch in Malaysia.
Foong Ching Kong, Owner / Founder at AeonSparx Interactive Sdn. Bhd.
There is a bias for Malaysian games, people would like to play in successful games. So, most of the time a game from a Malaysian studio has to become popular abroad, and then people from Malaysia will know about the game and will start playing. So, Malaysian game developers are mostly targeting the Western market rather than the local one.
The whole list of reasons to open an office in Malaysia is presented below: