The origin of Garena Vietnam - the leading online game publisher in Vietnam
Just looking at the rapid growth and development of online game publishing companies such as Valve, Tencent, or Ubisoft is enough to imagine the development potential of the gaming industry, as well as the esports industry. These companies not only earn revenue from their games, but also find ways to maximize profits through products based on those games. Esports in the world has become a billion-dollar industry and is still growing.
Garena Vietnam earns trillions by releasing online games, but the tax paid for the whole year is not equal to the revenue earned in 2 days.
In Vietnam, data from the Vietnam Game Producers and Publishers Alliance shows that the revenue of the Vietnamese game industry in 2022 will reach more than 600 million USD. With an average growth rate of 9% per year, along with a large number of players of 54.6 million, Vietnam is considered a very potential market.
Standing out among the biggest game publishers today is Garena Vietnam, which owns the most popular games such as: Lien Quan Mobile, Free Fire, FIFA online... and even built a separate platform for players to connect with each other.
Saigon Phantom team won a Lien Quan Mobile tournament organized by Garena Vietnam
Along with that, Garena Vietnam is also an online game publisher that is quite "attentive" to building its image, opening tournaments, investing in teams, gamers, supporting life, developing personal skills, building images for athletes with a value of up to billions of VND. Therefore, if only counting the Vietnamese market, the number of players of Garena games has reached tens of millions of people, from young to middle-aged.
According to the investigation of the Journalist & Public Opinion Newspaper, the Vietnam Electronic Entertainment and Sports Joint Stock Company (also known as Garena Vietnam), formerly known as Hoa Binh Informatics Joint Stock Company, was established on May 10, 2011. Initially, Garena Vietnam had only 3 founding shareholders including Le Quang Tra; Mai Thanh Binh and Mai Thi Hoa. However, all three of these shareholders have transferred.
Currently, the ownership structure of Garena Vietnam includes Mr. Mai Minh Huy owning 69.5%, foreign shareholders owning 30% and Mr. Le Minh Tri owning 0.5%. Garena's current charter capital is at 9 billion VND. The General Director and legal representative of the company is currently Mr. Vu Chi Cong (born in 1984).
It is known that the foreign shareholder of Garena Vietnam is Garena Vietnam Private Limited, a subsidiary of Sea Limited Group (Singapore). Currently, Sea Limited is one of the big names in the online entertainment business industry in the world, with famous games in Vietnam such as: League of Legends, Lien Quan Mobile, Free Fire or FIFA Online...
Garena Vietnam has a revenue of thousands of billions, earning an average of 19 billion per day, but only pays less than the money earned in 2 days in taxes.
Thanks to attracting a large number of online gamers, collecting money through selling in-game items, advertising, organizing events, tournaments... Garena Vietnam has brought in huge revenue. Currently, the card top-up portal for Garena Vietnam gamers is now linked and allows users to top up through a series of forms such as: via Shopeepay wallet, Garena issued cards, phone top-up cards of network operators, via banking apps via iBanking or via Visa, Mastercard cards...
According to research by the Journalist & Public Opinion Newspaper, in recent years, Garena Vietnam's revenue has continuously increased year by year, reaching a record of more than 6,900 billion VND in 2022, equivalent to an average daily revenue of nearly 19 billion. This revenue increased by 14% compared to the previous year and was nearly 4 times higher than in 2017. However, it is worth noting that Garena Vietnam's profit is very thin and fluctuates erratically.
After nearly tripling in 2020 to VND143 billion, Garena Vietnam's after-tax profit fell 27% in 2021. By 2022, the game publisher's net profit increased again to VND115 billion, but this figure was still much lower than the record level in 2020. The net profit margin was only about 2%, meaning that VND100 in revenue was exchanged for VND2 in profit.
In the past, Garena Vietnam even unexpectedly reported a loss in 2014 despite a four-fold increase in revenue to VND1,200 billion over the same period. That year was also the first time the company recorded revenue of over a trillion. The high cost of capital of up to thousands of billions each year is the main reason why the game publisher's profits have been eroded over the years.
Thin profits make Garena Vietnam pay very little tax. In 2022, despite revenue reaching more than 6,900 billion VND, this company only paid less than 26 billion VND in corporate income tax, which is not even equal to the amount collected in 2 days. In the past 5 years, the amount of corporate income tax that this game publisher has paid is less than 111 billion VND, although it collects thousands of billions every year.
In fact, the scale of Garena Vietnam is not large, even somewhat inferior to other businesses in the same industry such as VNG (formerly Vinagame) although its revenue is equal. With a charter capital of only 9 billion, the company's equity is mainly "replenished" by undistributed profits. By the end of 2022, the company's equity was at 553 billion VND.
Garena Vietnam's liabilities also decreased sharply last year to VND579 billion as of December 31, 2022, the company has no financial debt. This is the second consecutive year that total liabilities have decreased sharply after reaching a record high in 2020 (VND1,300 billion). This has also caused the scale of this business to shrink, with total assets at the end of 2022 at only VND1,132 billion, down nearly 31% compared to the end of 2020.
According to some experts in the industry, this is the most surprising thing when looking at the business results of Garena Vietnam when seeing the "sky and earth" difference in revenue and profit. This is quite difficult to understand for a game publishing business of such scale when it only pays taxes less than the money earned in 2 days.
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