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Digital content firms give up online games after modest revenue

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VietNamNet Bridge – Unable to earn money from online games, digital content firms have shifted to new services such as online education, TV and AI-based products.

Digital content firms have reported a sharp fall in revenue from online games in 2018.

Nguyen Ngoc Han, CEO of Thu Do Media, said only large firms such as VNG and Garena backed by large technology groups are developing online games.  Domestic firms can no longer earn revenue from the sector. 

Thu Do Media has shifted to digital TV services and services in cooperation with mobile network operators. It has joined forces with SCTV to develop an app for watching OTT STV on mobile and internet platforms. STV is now available on Android TV Box developed by domestic firms and on smart TVs. 

With more than 10,000 downloads, STV is one of a few OTT TV apps which can collect subscription fees. Online karaoke services are the most profitable business.

Thu Do Media is also trying to reach the foreign market by developing studios which make cartoon films for foreign clients. The studios have had products distributed in the US, Canada and Europe.

As online games are no longer the key digital content service, mobile network operators now act only as the data infrastructure service provider and a part of the SMS payment channel.

Thu Do Media doesn’t sell cartoons in Vietnam. Han said it is difficult to distribute films in the domestic market because of the strict regulations on censorship. The domestic market cannot bring attractive profits because of copyright infringement.

“An animated film in the Philippines can bring five times more revenue from ads than Vietnam,” he said.

The CEO said that the serious copyright infringement in Vietnam hinders the development of digital content services useful to society, such as education game shows.

“The digital content industry is nearly ignoring the online education field,” he said.

Some firms have been developing online education games and earning money from the products. Monkey Junior, for example, collects VND500,000 a year in fee from users each year. However, it is not easy to earn money. The developer of Chinh Phuc Vu Mon had to stop providing the game because of reactions from parents.

VTC Mobile is the first digital content firm investing in producing TV content. VTC Mobile’s CEO Nguyen Ngoc Bao said online games now are just one of many services it is providing, including added value services for mobile devices, TV programs and KidTV, a TV channel for moms and kids.

As online games are no longer the key digital content service, mobile network operators now act only as the data infrastructure service provider and a part of the SMS payment channel.