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Two days before Indonesia’s general elections, the country issued Presidential Regulation No. 19 of 2024 on the Acceleration of National Games Industry Development. The details contained in that regulation may give gamers reason to smile, but not so much for foreign publishers that want to market their games in the Southeast Asian country.

Indonesia’s Presidential Regulation No. 19 Will Take A Hit On Foreign Game Publishers

Indonesia is of strategic importance in the gaming world, especially when it comes to Esports. With a population of about 277 million people in 2023, according to Macrotrends, Indonesia is the most populous country in Southeast Asia.

Niko Partners, a leading Asian games market researcher, estimates that the country has the third-largest population of gamers in Asia, behind China and India. In terms of numbers, Niko Partners estimates that there are 137.9 million gamers in the country. The country’s game industry earned $1.5 billion in revenue in 2022.

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Niko Partners believes the high population of gamers in the country is the reason why video game makers are localizing in the country. According to the research firm’s market model, “Indonesia makes up approximately a quarter of all games revenue and half of all gamers in Southeast Asia”.

It is believed that Prabowo Subianto’s administration will be a continuation of the current government for myriads of reasons. Firstly, Subianto’s running mate, Gibran Rakabuming Raka is Joko Widodo’s eldest son. Also, Subianto served in Widodo’s government as the minister of defense.

Indonesia’s Presidential Regulation No. 19 Will Take A Hit On Foreign Game Publishers

While people do change when they get into the seat of power, Subianto will likely preserve the policies introduced by Widodo’s administration which are targeted at growing the country’s game industry and encouraging local game development.

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While the government’s intent with Presidential Regulation No. 19 of 2024 is unambiguous, it is hard to tell if it will achieve the desired goal. Therefore, it will be interesting to watch Indonesia’s gaming market in the next five years to see the direction it goes.

Important notes from the Presidential Regulation No. 19

It is believed that Subianto will uphold Presidential Regulation No. 19 on the Acceleration of National Games Industry Development (PERPRES 19/2024). Presidential Regulation No. 19 will allow the government to create an inter-ministerial team that will be headed by the Coordinating Minister of Maritime and Investment Affairs to centralize policies surrounding the country’s games industry and market.

Presidential Regulation No. 19 has set the ambitious goal of raising Indonesia’s gaming market value to $2.5 billion by 2035. To hit that number, the government is adopting new policies to accelerate the growth of the gaming industry.

Indonesia’s Presidential Regulation No. 19 Will Take A Hit On Foreign Game Publishers

Presidential Regulation No. 19 contains strategies like intellectual property assistance, skill training, tax regulation revisions for game companies, inclusion of games in educational curricula, and marketing support geared towards achieving the set goals.

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However, there are grey areas in the regulation that require deeper scrutiny. The following sections are likely going to negatively impact the country’s gaming industry.

  • Section 5.1 of the new regulation mandates foreign game publishers to have a legal entity in Indonesia or collaborate with a legally authorized local entity
  • Section 5.2 indicates the creation of a classification body that will make sure all games operating in the country don’t conflict with national values
  • Finally, Section 6.1 hints at a new policy that will mandate hardware makers to preload Indonesian games in consoles sold in the country

According to Niko Partners, the details of the policies are not yet available to the public. However, game publishers thinking of foraying into the Indonesian market will surely keep a keen eye on how the policies are being implemented. Clear communication between the government and industry actors is crucial at this point.

Do you think Presidential Regulation No. 19 will lead to the growth of the Indonesian game industry or stifle its growth? Share your thoughts in the comment box below.

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