Vietnam online game providers struggle to remain afloat

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 An online game exhibition in Ho Chi Minh City

The three-year-old restriction on distributing new online games is jeopardizing their survival, game companies said at a conference organized by the Ministry of Information and Communication last week.

Nguyen Van Khoa, managing director of FPT Online Company, said his company has been in trouble since the ministry stopped licensing games in 2010 out of concern over their impact on young people.

He said four of the five games his company has a license -- obtained before the ban --have "died" in the last three years.

Revenues have declined from over VND1 million (US$46.61) per player per year to VND700,000, he said.

In the first half of this year the firm's sales were down to VND108 billion ($5 million). It had revenues of VND318 billion ($14.82 million) for the whole year in 2011, he said.

"It's becoming unbearable."

Le Hong Minh, CEO of VNG Corporation, said his company is doing "very badly."

The ministry's chief inspector, Nguyen Van Hung, admitted that the games licensed prior to the ban did not interest players any more.

This has forced businesses to either close down or break the law, he said.

Every game company in Vietnam distributes unlicensed games, he said.

"If we followed rules seriously, surely every business will be punished." 


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The ministry's electronic information management department said that in Vietnam now there are 117 licensed games, but 47 of them are no longer sold.

But in the market, more than 200 online games and 100 mobile phone games are available, it admitted.

Meanwhile, foreign businesses have flocked to the lucrative market.

At least four foreign firms distribute dozens of online games in Vietnam without getting licenses or paying taxes, Hung said.

"We have eliminated our own businesses from the game in our own market, allowing foreign companies to control it," he lamented.

According to VNG's statistics, despite the ban on the distribution of games, demand for online games has never decreased in the past three years.

There were over 20 million players in the country last year, and the industry earned VND6 trillion ($279.7 million), the company said. 

By 2018 Vietnam will have 50-60 million Internet users, around 40 million smart-phone users, and over one million smart TVs that can access the Internet, which would further boost the online game market, Le Hong Minh, VNG's CEO, said.

"We need to have a fair look at the game industry."

In many countries online games are distributed without licenses, and China has a "gloriously developed" game industry thanks to the government's policies, he added.

Phan Sao Nam, chairman of VTC Online Company, agreed, saying that over 7,000 people are working in the game industry and earned $250 million a year, or 10 times Vietnam's per capita GDP.

"The whole world is truly making use of the industry."

Hung admitted the government needs to review its policy on licensing online games to meet the demand, and combat illegal business activities.

The massive demand for online games means people would turn to foreign sources if local businesses continue to be restricted, he warned.

Deputy Minister of Information and Communication Do Quy Doan said he "sympathized" with the industry and agreed that a "fair" and "complete" look at it is needed.

He told the industry to propose changes to policies.

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