Money from online games business outflows abroad

In order to escape state management agencies’ notice, game publishers tend to set up servers in foreign countries. This means that gamers have to play international games, while the money collected from online games are outflow abroad.

Unlicensed games put both distributors and gamers at risks

Vietnam has halted licensing online games since July 2010, which has forced game business distributors to “dodge the laws” by set up servers in foreign countries.

This proves to be the only resort left for games distributors. Before the decision on halting licensing games was released, Vietnamese enterprises had signed contracts with foreign partners on copyright procurement, employed officers and made technical preparations. Therefore, they could not leave the purchased games idle, and they needed to find out the way to fulfill the commitments with the partners.

However, experts say that this is really a risky business. The measure makes it more difficult for state management agencies to control the games on the market. However, if they discover the existence of the games, they will impose heavy fine and order to stop providing the games.

If the companies have to shut down per the order of state management agencies, they will incur big losses. Especially, the royalties alone would cost millions of dollars. Besides, they will also lose the money paid for leasing servers and the money spent on develop technical infrastructure. And of course, the staff of the companies will become jobless.

This once happened with Xgo, when the game distributor was forced to close three unlicensed online games. Meanwhile, another game is likely to bear the same fate.

The heavy punishment on Xgo is considered a warning that state management agencies give to other game distributors who are trying to distribute online games illegally in Vietnam.

Not only game distributors, but gamers are also facing high risks, because they would suffer complete loss at any times, if the games are forced to shut down by the state management agencies.

When joining the games, gamers will have to accept to play the games without distributors (no distributor would admit these games are distributed by them), which means that they will not get full support from the service providers.

If meeting troubles when playing, the only thing gamers can do is contact the service providers through emails for support. Especially, if the games are forced to shut down, they will lose all the efforts and money they have spent on the games. Of course, gamers cannot claim loss to management agencies, because they well understand that the games are distributed illegally.

Money going out of Vietnam

With the tricks being played by a lot of game distributors, the money from games business is flowing into the pockets of foreign companies.

In the past, when distributing games, domestic distributors only had to pay royalties for the games, while they developed the technical infrastructure and employed workers themselves. However, nowadays, they have to lease servers, use foreign technical infrastructure and hire workers from other countries.

With higher cost prices, the profits of the distribution companies will decrease. Experts estimate that 2/3 of total turnover from games are flowing abroad and falling into the hands of foreign partners.

Experts have also called on to apply a reasonable policy for the online game. If Vietnam continues refusing to license online games, domestic gamers would try foreign games, because it is now easy to join international games. If so, the state will fail to collect tax, while foreign companies will pocket the money from Vietnamese gamers.

In 2009, Vietnam earned 2500 billion dong in total from digital content services, of which 1200 billion dong came from online games. Meanwhile, Vinasa believes that the total turnover from the digital content services would reach 20 trillion dong by 2014.