Gaming firms look for love from Indonesia’s recast Creative Economy Ministry

The ministry is no longer in charge of tourism and now has a deputy head with a gaming investment background, which has developers hoping for more government attention to address longstanding issues of their industry.

Aditya Hadi

Aditya Hadi

The Jakarta Post

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Deputy Creative Economy Minister Irene Umar (center) shakes hands with President Prabowo Subianto (left) during her swearing-in ceremony at the State Palace on Oct. 21. PHOTO: PRESIDENTIAL SECRETARIAT/ THE JAKARTA POST

October 28, 2024

JAKARTA – Game developers have lauded the revamp of the Creative Economy Ministry in Prabowo Subianto’s Red and White Cabinet, particularly the appointment of a former gaming investment professional as deputy minister.

They suggested that the new structure, which excludes tourism as part of the ministry’s responsibilities, would increase the government’s focus on the emerging gaming industry and might help address longstanding problems of talent development and access to funding.

Upon assuming office on Oct. 20, President Prabowo announced the recreation of a separate ministry for tourism, which during former president Joko “Jokowi” Widodo’s second term in office had been part of the Tourism and Creative Economy Ministry.

Prabowo picked Teuku Riefky Harsya, a senior politician from the Democratic Party that had backed his presidial campaign, to lead the new Creative Economy Ministry. While Teuku had handled creative economy-related policies during his two-decade career as a member of the House of Representatives, his main experience lies in the telecommunications industry and hospitality.

Prabowo’s pick for deputy creative economy minister, however, has been greeted with enthusiasm by game developers, because Irene Umar is a well-connected figure in their industry.

Prior to her appointment, the 40-year-old served as managing partner at Discovery Nusantara Capital (DNC), a gaming-focused investment fund. She is also the cofounder and CEO of W3GG, an organization dedicated to empowering gamers, developers and investors to participate in blockchain play-to-earn games.

“I am honored by this appointment and the opportunity to serve my country in this capacity. I look forward to leveraging my experience with W3GG to help Indonesia harness the full potential of Web3 technologies,” she said in a statement on Oct. 20, as the firm appointed another cofounder, Chin Yu, as new CEO.

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Shafiq Husein, chairman of the Indonesian Game Association (AGI), expressed optimism that the government would now pay more attention to the creative economy sector, especially game development, with the establishment of the new ministry.

He described Irene’s appointment as “a big advantage” for the local gaming scene, which may lead to improved public-private collaboration.

“With her experience and knowledge, Irene can help [the government] identify the specific needs of the industry, such as talent development, infrastructure and wider market access. We are confident that she can strengthen her contributions to defend the interests of the local game industry,” he said to The Jakarta Post on Wednesday.

Shieny Aprilia, cofounder and CEO of major game developer Agate, stated the spin-off of the creative economy portfolio into a dedicated ministry signaled that the new administration understood the importance of the sector.

According to her, Irene’s position as deputy minister was strategic, as she was a “direct representation” of the creative industry in public policy-making. With a deep understanding of the challenges and needs of the industry, the ministry’s second-in-command was well-placed to make domestic developers more competitive and help them push their games into the global market.

“Her support for the game industry is evident from her efforts to introduce industry players and stakeholders, as well as her support for talent development through various programs. We believe that the expectation of more industry-supportive policies will soon be realized,” she told the Post on Wednesday.

Read also: Indonesian game developers worry over potential losses from local presence rule

Hidden potential

App and game development is expected to see annual revenue growth of 13.3 percent in the coming years, outpacing all other creative economy industries in Indonesia, except for the performing arts, according to the Institute for Economic and Community Research at the University of Indonesia’s Faculty of Economics and Business (LPEM FEB UI).

However, the sector contributed only Rp 27.92 trillion (US$1.8 billion) to the country’s gross domestic product (GDP) in 2020, or 2.42 percent of the total creative economy, which is still dominated by food, fashion and handicraft.

Shafiq from the AGI stated that the growth of the local game industry was hampered by a lack of talent development, digital infrastructure, funding options and exposure to international markets.

He suggested that the government address these issues by providing incentives, establishing incubators for local game developers, supporting the development of servers and facilitating building partnerships with investors.

Agate’s Shieny said many traditional investors were still reluctant to invest in the local game industry due to a lack of understanding of its dynamics and market potential. Therefore, aside from providing funding through incubators, the government could also support local players through dedicated venture capital or grants.

“We also hope for programs that encourage more partnerships and knowledge transfer between local and global game companies, as well as policies that attract more foreign investment,” she concluded.

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