Behind the growth of Malaysia’s digital creative content startups

Many things come to mind when one thinks about Malaysia. The country is a key producer of rubber and palm oil, an industrial powerhouse, and a popular tourist destination. But it is also the home of a booming digital creative content scene.

Photo credit: pat138241 /123RF

In 2020, Malaysia’s gaming market stood at US$786 million, which made it the third largest in Southeast Asia. Its animation industry was valued at over US$1.6 billion in the same year, with exports in the sector standing at over US$285 million, doubling from 2014. Local animation studios also produced more than 65 original pieces of intellectual property, creating nearly US$40.5 million in export value and expanding its presence to more than 120 countries.

The products of Malaysia’s digital creative industry have also received recognition around the world. Programs such as Upin and Ipin, which explores the adventures of two twin brothers, and Mechamato, which revolves around a boy and his robot companion, have reached global audiences. Meanwhile, games like multiplayer arena brawler GigaBash and action-adventure title No Straight Roads have won accolades at international competitions.

It’s no surprise that the industry plays a key role in Malaysia’s growing digital economy.

The value of digital creative content

“Digital content has great potential in driving the growth of Malaysia’s digital economy, making it an area of great interest for us,” says Mahadhir Aziz, CEO of the Malaysia Digital Economy Corporation (MDEC), a government agency supporting the country’s digital industries.

In his perspective, there are several reasons why this is the case.

Mahadhir Aziz, CEO of MDEC / Photo credit: MDEC

First, the digital creative industry has been put forward as a key driver of the post-pandemic economy in Southeast Asia. This is a result of rapid digitalization and a growing generation of millennials and Gen-Z consumers who value experiences and entertainment, alongside an even greater demand for digital content globally.

Second, digital creative content provides a way for many key skills in tech to be utilized.

“Digital content is based on established digital creative skills and tech, such as programming, design, art, and narrative construction,” explains Aziz. “Not only does it help train essential base skills, it also allows room for innovation and creates opportunities to explore use cases for new tech, such as virtual reality, augmented reality, and blockchain.”

There is also a significant growth opportunity for Malaysian startups in the digital content market for Islamic entertainment.

In 2019, Muslim consumers globally spent US$222 billion on media and recreation, up from US$214 billion in the year before. The pandemic saw the consumption of Islamic content rise to unprecedented levels, and Muslim consumer spending on media is expected to reach US$270 billion by 2024, although the market remains largely underserved on the content front.

Building up a digital creative economy

Given the potential of the digital creative content industry to drive Malaysia’s digital economy, the nation has rolled out several initiatives to help support its growth.

MDEC is leading the Malaysian government’s efforts through the Digital Content Ecosystem (DICE) policy under the Ministry of Communications and Multimedia, which focuses on attracting investments, building up local talent and companies, and strengthening the ecosystem through government and private sector partnerships.

According to Aziz, MDEC’s support of the government’s DICE policy will take form across four areas, namely business development, creative skills and talent, digitalization, and research and partnerships. These include competitions and business-matching opportunities, as well as access to a number of strategic investments and grants to help fuel the growth of local companies.

One Malaysian startup that has benefited from MDEC’s support is content development firm The R&D Studio.

In 2017, the startup participated in MDEC’s Intellectual Property Creators Challenge (now known as the Digital Content Creators Challenge) and won the competition, receiving a 75,000 ringgit (US$17,800) grant to produce its short film Batik Girl. The movie went on to premiere in 17 countries, receive official selections in 28 international film festivals, and win awards in Chile, Japan, and the US.

Poster for Batik Girl / Photo credit: The R&D Studio

Aside from the support available in its home turf, The R&D Studio was also able to take advantage of opportunities that MDEC offers to local animation companies that aim to go abroad and tap into new markets.

Alongside two other startups Zappy and Durioo, The R&D Studio exhibited at the Malaysia Pavilion during Expo 2020 Dubai, which was held in January this year. Through the event, the firm was able to exhibit Batik Girl to an even broader audience while connecting to potential clients in the Middle East.

Expo 2020 Dubai also opened up opportunities for Zappy and Durioo. Zappy has worked with a local government in the Middle East on an animation project and is in talks with several companies in Dubai. Meanwhile, Durioo has connected with broadcasters in the Middle East and North Africa to bring its Islamic children’s content to wider audiences.

“[Having these startups participate] in Expo 2020 Dubai allows us to give them exposure to global markets, as well as bring the brand name of Malaysian digital content space to the wider audience,” says Aziz.

From Malaysia to the world

The CEO is bullish about the future of Malaysia’s digital creative content economy.

“The future looks good, as is evident by the success seen by startups in the space,” shares Aziz. “These startups represent the funnel of new creators entering the space and are the lifeblood of creativity, and earlier studios have paved the way for other entrants to enter the field.”

MDEC will continue to fuel the growth of the country’s digital creative industry, both through supporting startups and developing the necessary talent for keeping the sector going.

“These initiatives will help provide a strong foundation for our growing industry and ensure that there isn’t a lack of talent,” Aziz explains. “With steady flow of talent, infrastructure, and consistent government grants and initiatives, the gaming and animation industry will be able to not just profit, but also fuel the growth of Malaysia’s digital economy.”

As Malaysian content continues to cross borders, the CEO is confident that the country’s startups will be able to reach consumers all over the world.

“As the global audience expands their taste for diverse content, Malaysia with its culture-rich and diverse population would be able to deliver content that is different and unique,” he says.

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.23 ringgit.

Malaysia Digital Economy Corporation (MDEC) is the agency under the Ministry of Communications and Multimedia Malaysia leading the digital transformation of the country’s economy for 25 years. It aims to enable a progressive, innovation-led digital economy.

Learn more about MDEC on its website here.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.