VNG, the Vietnamese king of online video games that wants to conquer the world


An employee at the headquarters of VNG Technology Group, December 8, 2023 in Ho Chi Minh City, Vietnam (AFP / Nhac NGUYEN)

VNG Technology Group, which is essential in Vietnam, wants to become a player in the global online gaming industry, illustrating the new international ambitions of the country’s entrepreneurs, long focused on the domestic market.

Gone are the days when its founder Le Hong Minh traveled around Vietnam on a motorbike with a handful of friends to visit the country’s 5,000 Internet cafes and put up advertising posters for his online gaming start-up Vinagame. It was in 2004.

Renamed VNG in 2014, the group became the first Vietnamese technology company to reach $1 billion in capitalization and filed for listing on Nasdaq, the holy grail of the stock market for companies in the sector, in August.

“The goal I have set for my team is that within three to five years we will be a global player in the game,” explains the 46-year-old manager from his offices on the banks of the Saigon River in Ho Chi Minh City. City, the economic capital of the country.

VNG Technology Group founder Le Hong Minh at the company's headquarters in Ho Chi Minh City, Vietnam on December 8, 2023 (AFP / Nhac NGUYEN)

VNG Technology Group founder Le Hong Minh at the company’s headquarters in Ho Chi Minh City, Vietnam on December 8, 2023 (AFP / Nhac NGUYEN)

To achieve this, “we need to be visible on the world stage and attract capital and talent from all over the world,” he emphasizes to AFP.

VNG, which already operates in Thailand and Indonesia and marginally in China, initially wants to expand to Latin America and the Middle East.

Because the Vietnamese market is already too small for him.

– Head of News –

In addition to online gaming, VNG is also a major player in mobile payments, cloud and messaging in Vietnam through its Zalo app, which is used by up to 75 of its 100 million residents.

Employees at the headquarters of VNG Technology Group in Ho Chi Minh City, Vietnam on December 8, 2023 (AFP / Nhac NGUYEN)

Employees at the headquarters of VNG Technology Group in Ho Chi Minh City, Vietnam on December 8, 2023 (AFP / Nhac NGUYEN)

If the country, like many others, has a youth eager for new technologies, Zalo has established itself as an everyday tool for the entire population instead of most western applications.

“Zalo is very practical,” emphasizes Ha Thi Minh Hoan, a 74-year-old retiree. “As we get older, we stay at home a lot and this allows us to send photos, chat and laugh with others. Life would be monotonous without it.”

However, VNG’s main business remains games, which represent 80% of its turnover. The group, which employs 4,000 people, launches at least ten new products a year.

Employees at the headquarters of VNG Technology Group in Ho Chi Minh City, Vietnam on December 8, 2023 (AFP / Nhac NGUYEN)

Employees at the headquarters of VNG Technology Group in Ho Chi Minh City, Vietnam on December 8, 2023 (AFP / Nhac NGUYEN)

The search for new international markets is therefore a “logical development”, believes Lisa Hanson, CEO of Niko Partners, a firm specializing in the Asian online gaming market.

For Huy Pham, a lecturer at RMIT University in Ho Chi Minh City, markets today are attentive to proposals coming out of Vietnam, which is experiencing “increasing momentum”.

Vietnamese electric vehicle maker Vinfast had a spectacular debut on the Nasdaq in mid-August, even briefly overtaking General Motors and Ford in market capitalization…before a severe correction.

– Pitfalls –

Mr Huy believes the road is likely to be strewn with pitfalls for VNG.

Because if the group already counts among its shareholders the Chinese giant Tencent -​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​a

An employee works at the headquarters of VNG Technology Group in Ho Chi Minh City, Vietnam December 8, 2023 (AFP / Nhac NGUYEN)

An employee works at the headquarters of VNG Technology Group in Ho Chi Minh City, Vietnam December 8, 2023 (AFP / Nhac NGUYEN)

VNG suffered a loss of $27.4 million in the first half, following losses of $86.7 million for the full year 2022, according to SEC filings.

Entering new markets, with all the product customization requirements that entails, “will increase costs … and losses,” at least initially, notes Mr. Huy.

According to the specialized agency Bloomberg, VNG has also postponed its entry on the Nasdaq, originally expected in the fall, in anticipation of more favorable conditions.

But Le Hong Minh assures that his determination is unbreakable.

He remembers the day in 2002 when, as a young “gamer,” he was able to leave his still underdeveloped communist country to participate in the World Cyber ​​​​​​Games in South Korea.

“The ultimate goal is to compete with the best in the world, right?” notes. Today, “Vietnamese companies have gained a lot in skills and confidence. We have to look beyond our borders.”

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