Asia: growth in spades
How can you encapsulate Asia as a market for amusement games? In many respects, it is where the modern amusement machine industry began and where much of it is developed today.
bu Mark Griffith
Arguably, Japan is where it started and where much of the FEC industry remains today, although most of the locations are more akin to arcades than the FEC destination-style shopping mall anchors. The country is where names such as Sega, Bandai Namco and Taito were forged into bywords for technology.
That they are now cutting back on arcade operations is merely a symptom of their business strategy to develop for the mobile market and a reaction to the pandemic. But there remain more than 3.000 larger venues there. It has slightly fewer than 10.000 small venues with 50 games or less. It is interesting that a study in 1995 reckoned there were 50.000-plus amusement locations in the country.
Japan is a curious contradiction in some ways. At the very pinnacle of technology, yet its venues shun cashless gaming. The traditional use of ¥100 coins to activate games, remains strong, perhaps propelled by the love of pachinko – a game that has 15.000 venues by itself but is not, strictly-speaking, an amusement location.
The shrinkage in the Japanese market, in terms of operating, is unquestionably due to the challenge on online content and high rents, further exacerbated by the pandemic.
China, as always, has the numbers. That is based upon the fact it is the workshop of the industry. Most of the modern amusement devices find life there and are hawked to the supply industry’s majors, who also buy their components in China. Much of that is centred to the south, in the Zhongshan area of Guangzhou. But the country itself has a huge and unquantifiable number of venues. The suggestion that there may be 1.000 “decent-sized” Fecs in China, and perhaps 15.000 tiny operations, is said by some experts to be low.
Elsewhere in Asia there are few substantial operations. In India, for example, Fun City, owned by the Uae-based Landmark Leisure, has over 50 venues and Teeg (The Entertainment and Education Group), based in Singapore, has similar numbers. An affluent middle class in India is the main client.
Right now, India has about 200 “proper” multi-attraction Fecs, mostly located in shopping malls. After that, it has a few hundred tiny arcades.
The major operators in Asia are probably led by Aeon Fantasy, with over 800 venues across the Far East. Aeon Fantasy Group, based in Japan, has 433 outlets in Japan, 204 in China, 28 in Thailand, 15 in Vietnam, three in Cambodia, 98 in Malaysia, 51 in the Philippines and 29 in Indonesia. It operates under the Kidzooona brand and in Japan and China under Mollyfantasy.
Equally diverse is the series of Timezone venues operated by Teeg that take in Australia, New Zealand, Singapore, India, the Philippines, Vietnam, Indonesia and other countries. Group CEO Sonaal Chopra is bullish about the prospects of the industry over the next few years: “We believe that the indoor amusement industry is now experiencing a growth rate of Cagr (compound annual growth rate) of 12 per cent. The industry is a $20bn business today and will be close on $50bn by the end of this decade.
“And Apac (Asia-Pacific) will be the growth engine.”
He is optimistic following strong results in Australasia and Singapore and TEEG will continue to expand at a fast rate. “We will open some iconic venues that will further redefine the bar.”
Chopra feels some Asian markets will take some time yet to get back to normal, but in the interim his own teams are preparing to elevate the guest experience. “We are disturbed by the devastation we have seen in India. We continue to invest there and remain committed to open 12 new venues in India this year, taking us to 56 locations in 2021. At the same time, we have a high quality pipeline for new venues in Vietnam this year and in 2021.”
A speculative tip for the countries to watch? Semnox, which knows most of them, reckons Indonesia with its large youth population and rising middle class is prime, if it can drop its predilection for token operation.
Teeg recognised this years ago, which is why Timezones are thick on the ground there and why Teeg’s developers at Lai Games are based there.