Pakistan’s video game industry struggles to fetch foreign exchange, create jobs for developers

Employees at weRplay, a game development company based in Islamabad, Pakistan, develop animations for video games on September 14, 2023. (AN Photo)
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Updated 17 September 2023
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Pakistan’s video game industry struggles to fetch foreign exchange, create jobs for developers

  • The country earned $171 million by developing video games last year, reflecting a small share in the $300 billion global market
  • Pakistani universities do not offer animation and gaming degrees, making it hard for local developers to compete internationally

ISLAMABAD: Pakistan’s video game industry has gained international recognition by developing award-winning products, though it has not found it easy to generate foreign exchange or create jobs for young developers in the absence of government support and international payment gateways like PayPal, as admitted by leading industry players this week.

The gaming studios in the country contributed $171.3 million to the national economy last year, reflecting its minuscule share in the over $300 billion global market.

Pakistan’s video game industry employs nearly 8,500 people who help local companies create products for different platforms, including cellphones, desktops, Mac devices, and consoles like PlayStation and Xbox.

Speaking to Arab News, Chairman of the Pakistan IT Industry Association, Muhammad Zohaib Khan, maintained that the country could employ 3,000 more developers annually to achieve a 30 percent year-on-year growth in the industry’s foreign remittances, provided it invested in human resources and skills development programs.

“We need to invest in the game development and animation skills of our youth to get a fair share in the global gaming industry,” he said. “Our designers and professionals will have to be trained to compete at the international level by developing quality products.”




A video game designer draws character sketches on a digital tablet at weRplay, a game development company based in Islamabad, Pakistan, on September 14, 2023. (AN Photo)

Fawad Asghar, the chief technology officer of weRplay, an award-winning game development company based in Islamabad, concurred with him.

“Pakistan does not even have one percent [share of the global gaming industry],” he said while mentioning lack of training opportunities in game development at Pakistani universities along with the absence of government support for the industry.

Asghar’s company was launched in 2010 and employs nearly 250 people. It has created about 40 games in all these years, including “Lost Twins 2” that won international awards on the basis of its demo released on iOS, Android, PC, Mac, and Nintendo etc.

The organization plans to release the game on all platforms within the next few months.

“We hope it will be a big win for us,” he said, saying that developers in his company took up about four years to develop the game. “It will be, I guess, the biggest game so far for weRplay.”




A video game developer at weRplay, a game development company based in Islamabad, Pakistan, develops animations for video games on September 14, 2023. (AN Photo)

Responding to a question about the company’s revenue stream and target audience, Asghar said about 90 percent of the income was made through downloads and ads, and much of it came from the United States.

Another game produced by the company, “Run Sheeda Run,” had one million downloads in Pakistan, though he said it was really difficult to make revenue here.

Explaining the reasons behind the low revenue of video games in Pakistan, co-founder of tecHouse Games in Lahore Sanwal Nawaz said the cost per ad impression rate in the country for 1,000 was just Rs30 to Rs40 ($0.1 to $0.13) while it was $15 to $20 in the US and European markets.

“We don’t have a good economy,” he told Arab News. “Therefore, those who play games in Pakistan don’t go for in-app purchases which keeps our revenue negligible.”

Nawaz pointed out the developers in Pakistan lacked capital to market and promote their games online to capture greater market in the western countries since they would have to pay a minimum $300 per day for the purpose after the game was launched.

“If you don’t invest in marketing, it means your game will not be doing good in terms of revenue,” he continued, adding the industry was getting tough for those with minimum capital since Google had recently changed its algorithm to promote only paid ads.

Additionally, Nawaz pointed out Pakistani universities were not offering animation and gaming degrees unlike the developed world, saying this made it difficult for developers to compete at the international level with just certificate courses in game development.

“There is no shortcut in this industry,” he said. “Your product will sell only if it meets the international standards.”




The screengrab taken on September 14, 2023, from a video game shows the start screen of the game 'Explottens'. (AN Photo)

Discussing the impediments to the industry’s growth, Khizar Javed, director of business operations at weRplay, said it was not easy to pay employs working for the company from other countries.

“We have to go through the hassle of withdrawing money before depositing it in [employee] accounts through other channels that are not so cheap,” he said, adding the authorities should bring payment gateways like PayPal and Stripe in Pakistan since they were “pretty convenient and cost effective for money transfers.”

Despite all the odds, he noted that weRplay had produced award-winning games.

Huda Mahmood Khan, who worked on “Lost Twins 2” and “Explottens” for the company, described Hayao Miyazaki, a Japanese animator and filmmaker, as her inspiration.

“If you see them, they have a very immersive but a bit unrealistic world which we have created,” she said.

Khan specifically mentioned “Explottens,” saying it was selected in the top 30 games from across the world and subsequently did very well.

She said it was an action arcade game that revolved around “cats that are flying on planes and have their own world.”

“We built that world and the whole game around [that concept],” she added.


Pakistan’s transportation strike could cause economic losses of $1 billion, warn analysts

Updated 41 min 22 sec ago
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Pakistan’s transportation strike could cause economic losses of $1 billion, warn analysts

  • Traders, textile mill owners say strike has cost $60 million per day in exports, port demurrages, detention charges
  • Analysts warn 10-day strike could threaten economic stability by deepening inflation, widening current account deficit

KARACHI: Pakistan’s ongoing transportation strike has the potential to cause economic losses of up to $1 billion and threaten macroeconomic stability in the country, a leading economist warned this week. 

Transport unions have been protesting against stricter enforcement of axle-load limits — legal caps on how much weight trucks can carry — as well as increases in toll taxes and what they describe as heavy-handed policing on highways and motorways.

The strike, which began on Dec. 8, is now in its tenth day. It has slowed the flow of goods between ports, industrial centers and markets, raising concerns over supply chains in an economy heavily reliant on road transport for domestic trade and exports. Trucking is the backbone of Pakistan’s logistics system, moving food, fuel, raw materials and manufactured goods. 

“We are expecting a tremendous impact of the ongoing transportation strike,” Ahsan Mehanti, CEO of Arif Habib Commodities, told Arab News on Tuesday. 

“I believe that the major impact could be to the tune of $1 billion. And the reason behind that is primarily Karachi being a business hub will be most impacted with the ongoing strike.”

While a section of the transporters, the All Pakistan Goods Transport Association (APGTA) called off the strike after successful talks with the Punjab government on Friday, the rest of the transporters have vowed to continue the disruption. 

Manufacturers and exporters from the textile industry, which earns Pakistan the highest amount in exports, have estimated their daily losses at more than $60 million. 

Kamran Arshad, chairman of the All Pakistan Textile Mills Association (APTMA), said these losses were on account of disruption to exports as well as demurrage and detention charges that affected traders are bound to pay at local ports.

“I have estimated disruption to as much as $60 million ($540 million for nine-day losses) worth of exports and demurrage and detention charges of up to $300 per container per day stuck at ports,” Arshad said.

Arshad lamented that the textile industry was facing a critical situation as raw materials and essential inputs were stuck at ports and not reaching factories. On the other hand, finished export consignments were also unable to reach ports, he said. 

“Containers are stuck at mills, ports and depots and inventories are building up,” the APTMA chief said. “And backlogs are growing by the day.”

Pakistan Textile Exporters Association (PTEA) Patron-in-Chief Khurram Mukhtar calculated Pakistan’s monthly average textile exports at $1.5 billion.

“An eight-day transport shutdown alone has already caused approximately $400 million in export losses, with severe supply chain disruptions on top,” Mukhtar said. 

’BIG HIT’ TO EXPORTS

Prime Minister Shehbaz Sharif has tasked his government to ensure sustained economic growth through an export-driven economy. However, Pakistan’s exports have shown far from promising results, falling by 15 percent to $2.4 billion in November, according to data by the Pakistan Bureau of Statistics (PBS). 

From the July-November period of this fiscal year, the country’s exports declined by six percent to $12.8 billion, while imports surged by 13 percent to $28.3 billion. This widened the trade deficit by 37 percent to $15.5 billion.

Arshad said other than financial losses, the trade industry was suffering from “serious reputational damage” when it came to international buyers due to the strike’s disruptions. 

“Missed delivery schedules result in cancelations and loss of future orders,” he told Arab News. “And once a buyer is lost, it is extremely difficult to regain their confidence.”

Rehan Hanif, president of the Karachi Chamber of Commerce and Industry (KCCI), agreed. 

“Our exports are already in trouble forcing us to run after dollars, so the exports are going to take a big hit,” Hanif explained. 

He urged the government to engage transporters and address their “genuine” demands immediately. 

Information Minister Attaullah Tarar and Finance Adviser Khurram Schehzad did not respond to queries sent by Arab News till the filing of this report. 

Hanif said the prolonged strike had created a huge backlog of cargos at local ports.

“They would have no space for more containers if this strike persisted for a couple of more days,” he said. “Pakistan’s daily losses from the strike are running in billions of rupees.”

POSSIBLE INFLATION SPIKE

However, Karachi Port Trust spokesperson Shariq Amin Farooqui rejected Hanif’s claims, saying that cargo “is coming and leaving” the country’s largest port smoothly. 

Pakistan’s inflation rose by 6.1 percent in November and is expected to fall in the SBP’s target range of 5 to 7 percent this financial year, which is ending in June. 

Pakistan’s current account balance reported a $112 million deficit in October from an $83 million surplus in September, according to the central bank. 

Mehanti warned the strike could pose dangers to Pakistan’s hard-earned macroeconomic stability.

“Inflation will be higher, and the current account deficit will be higher due to challenging economic situation,” he said.