Why Local Game Industries Struggle to Scale A Structural Analysis of Indonesia’s Game Development Ecosystem
Main Article Content
Abstract
The gaming industry in Indonesia presents a significant paradox where a massive domestic market value of nearly two billion dollars contrasts sharply with a local market contribution of less than one percent. This study analyzes the systemic structural factors hindering the scaling of the local game development ecosystem, moving beyond simple symptom identification to understand the mechanisms of industrial stagnation. Unlike prior studies that examine talent, financing, regulation, and market barriers separately, this research offers a novel ecosystem-level perspective that reveals how these barriers reinforce one another. Employing an exploratory qualitative approach, this research integrates data from three years of Focus Group Discussions with developers, associations, and government bodies, alongside a thematic analysis of recent policy documents and secondary industry data. The findings reveal a critical phenomenon of structural lock-in caused by six mutually reinforcing barriers. These include a micro-scale trap where studios rely on outsourcing rather than intellectual property creation, a talent gap characterized by a mismatch between vocational education and industry management needs, and a financing disconnect in which more than 90 percent of studios rely on self-financing because financial institutions reject intangible assets as collateral. Furthermore, the ecosystem is plagued by market inequality favoring global publishers and regulations that function only as administrative frameworks without implementation power. It is further weakened by an unsustainable reliance on community volunteerism to bridge institutional gaps. The study concludes that current isolated interventions are ineffective because these barriers are interlocked. Consequently, sustainable growth requires a holistic ecosystem transformation that aligns education, financing, and policy execution to break this cycle of stagnation. These findings offer practical guidance for policymakers, financial institutions, and industry associations seeking to design interventions that address the lock-in rather than its symptoms individually.
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