News @ AsiaOne

Game on for Indonesia

The country still lags behind other countries on the tech super-highway, but catching up is going to be very exciting. -JP/ANN
Will Wiriawan

Sat, Oct 01, 2011

One a recent sunny afternoon, a crowd of thousands gathered near the parched shores of Madura Island in East Java, at an impromptu outdoor event. The crowd was cheerful, colourful, engaging. Most wore T-shirts featuring a cartoonish icon with a gigantic head and an Internet handle, such as "happyboy99".

Two groups of people, each about a dozen strong, sat crossed-legged, facing each other, cell phones in hand. At the far end of the field, a banner read: "mig33 Kicking Competition".

Welcome to Indonesia 2.0.

mig33 began as a cross-device chat app and has since become one of the largest mobile-driven social networks in Indonesia; at the time of writing, it had about 28.5 million users, and counting. Each user generates on average US$2.60 (S$3.40) in revenue for the company, generating a sustainable profit stream for both users and the company.

"mig33 encapsulates the social conventions of the Indonesian people today," Andy Zain from distribution partner Numedia says of the network. "People love to chat, to share, even to show off to some extent, and our app gives our users all that, including 'kicking'."

"Kicking" describes a feature in mig33 that allows a user to boot other, annoying users out of a chatroom.

"People seem to like it, so we created a game around it, and our users turned it into competitions," Zain adds.

The founders of mig33 are tapping into the increasingly app-centric market, pioneered through Apple's iPhone, before which the mobile industry was still predominantly text and voice based. Thanks to Google's zero-licensing scheme for its Android platform, the low-cost handsets owned by Indonesians today are basically toned-down smartphones, designed to make the most of apps. As part of this transition from a device-centric to app-centric market, manufacturers, including Nexian, are creating proprietary apps to meet customer demand for this mobile web frenzy.

"If we look around, only the middle up [demographic] carries smartphones," Zain says. "More than 80 per cent of our population still carries a traditional handset. So we knew from the beginning that in order to get big we need to play small."

The mobile revolution

To conservatives, mig33 exemplifies the volatility and unpredictability of the mobile market. To optimists, it is proof that the digital market is not only real, it is also lucrative.

But how did most people let such vast potential passed unnoticed? That, says Andy says, "is the million dollar question".

He puts it down to the timing of technology for Indonesians, who, unlike people in Western countries, for example, became cell phone owners before they became Internet users.

"Most Indonesian households don't own PCs, and they never experienced the Internet like we did," says Andy. "Only when mobile phones became affordable and operators introduced low-cost high-speed data access packages did the ball start rolling. Cell phones became the PCs they never had, and it opened up new possibilities for content producers and the users."

Especially in gaming and entertainment - and according to some, the popular, innovative devices from Apple led the way.

"The iPhone and the iPad changed everything," says Arief Widhiyasa, who runs Agate Studio, a Bandung-based game development studio with a staff of 60.

"The gaming industry is three times bigger than the movie industry today, and it is growing at about 20 to 30 per cent annually, so it's a very lucrative market with relatively small competition, especially in Indonesia," Arief notes.

Although Indonesia is slightly behind Vietnam in terms of development revenue in Southeast Asia, the country is catching up fast with increasing numbers of foreign companies looking to invest. Gameloft and Zynga, two of the world's largest social and mobile gaming studios, have set up shops in multiple cities across Asia, including Indonesia.

Despite the promise, though, game makers are still struggling to turn a profit. The traditional gaming console market is in sharp decline largely because of the popularity of modern smartphones such as the iPhone and Android.

"We do have a few titles coming to the App Store, but we are still scratching our heads on how to create a successful gaming franchise," Arief says. "Angry Birds, currently the most successful title in the market today, was Rovio's 12th effort; the other 11 all went bust."

Uncharted territory

Indonesians might be a relatively new to cyberspace, but they are fast making up time, with Internet penetration increasing rapidly in the past few years.

"Our country achieved a major milestone in 2011 when we saw an unprecedented number of mobile Internet users," Andy says. "Indonesia is home to more than 250 million mobile subscribers, and around 60 million of them are Internet ready. While on the other hand only about 50 million desktop CDs were sold to date, according to market research company GfK."

Indeed, Indonesia is becoming the world's most mobile connected country, according to industry insiders.

"The ripple effect has been incredible," says one telco professional, who preferred not to be named. "Thanks to social networking and the power of peer pressure, our mobile data has seen a significant increase in the last 18 months. Our mobile data offering has become our most profitable product so we had to shift our strategy. Without our mobile data offering, we would still be in the red today."

His industry jargon translates as a reference to mobile Internet connectivity, which has become the bread and butter of most modern telco companies. Indonesian operators are among the world's most competitive in offering zero-commitment on-demand data packages for mobile customers, making Indonesia one of the fastest growing markets in Asia and breeding one of the most Internet-savvy communities in the world.

In the clouds

Device manufacturers and tech companies are now basing more R&D efforts on this growing demand for mobility, with data portability looking to be driving the next wave of technological marvels.

Cloud computing is to our data what mobile Internet access is to our devices and computers. The cloud frees our data - and therefore us - from our desks, taking full advantage of wireless connections by allowing users to access their data anywhere, anytime, from any device.

Apple is taking this concept further by eliminating the need to move and copy files and data manually; a user can work on a document on his or her desktop Mac, and then, through the iWork Pages app, open the same document on his or her iPhone - at the same stage as when it was last edited, right down to the position of the cursor.

RIM, with the introduction of the BlackBerry 7 OS, has also introduced BlackBerry Protect globally to offer a data backup and retrieval service to BlackBerry users, as well as its popular push data communication platform.

"Catching a ride are our country's own entrepreneurs. We have identified 240 or more web startups across bigger cities in Java and Bali in the last few quarters alone," Andy says. "But unfortunately many have failed to even identify their basic values as many of them are offering products or services that only a tiny number of our real market offers."

The knowledge gap

"The Global Entrepreneurship Program was initiated to catch this wave," says Chris Kanter, co-chair of GEP Indonesia, an umbrella organisation promoting entrepreneurship and investment prospects in Indonesia.

"We understand the enthusiasm and the lack of knowledge and experience our young entrepreneurs possess, we hope to bring in expertise and both moral and financial support to Indonesian entrepreneurs."

Founder Institute, a global network of startups and mentors, is taking its mentoring a step beyond traditional methods.

"Through our four month pre-seed incubator program, you can launch your dream company with expert training, feedback and support from experienced startup CEOs," states the institute's official homepage.

"The Founder Institute's goal is to globalize Silicon Valley with local talents and knowledge," adds Novistiar Rustandi, who is teaming up with other entrepreneurs and mentors to establish a Jakarta branch of this garage-operated two-year-old institute.

And new challenges means new hopes.

It took almost 20 years of development before e-mail was publicly available outside a research lab. The first cellular phone weighed more than could be carried comfortably, and it took almost a century of development for researchers to come up with a working computer that a family could afford. It took Apple 10 years to figure out that the iPod can do so much more than music, and then another decade to realise that their device could be used as a solution to bridge human advancement and technology.

Which means that with development, R&D support, hard work and a healthy dose of typical Indonesian creativity and innovativeness, Indonesia, too, can be a tech nation in the making.

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