Online gaming seen to rival BPOs for office space

Metro Manila (CNN Philippines, September 26) — Business process outsourcing (BPO) may still be the largest user of office space in Metro Manila, but there’s a new game in town: online gaming.

Latest data shows online gaming outfits have expanded swiftly this year – just as BPOs also suffer a steep decline, with clients cutting down their accounts here for fear of political instability.

According to Leechiu Property Consultants, online gaming accounted for 19% of all Metro Manila office space as of August 2017, totaling about 125,000 square meters. That’s more than double the 9% share online gaming had in 2016, when the industry took up just 56,700 sqm. of office space.

BPO still holds the lion’s share with 53% of office space, equivalent to 346,000 sqm in the January-August period. It is a sharp drop from last year, however, when BPOs accounted for 75% or 472,500 sqm.

“Online gaming came out of nowhere and is now the second largest consumer of office space,” Leechiu CEO David Leechiu said in a press briefing on Monday.

He explained that online gaming companies started opening up to cater to mostly Chinese, Japanese and Korean locals who could not afford to fly out and play in the casinos here.

The companies typically set up shop in the Makati, Alabang, Bonifacio Global City and Manila Bay areas – all close to the PAGCOR Entertainment City in Parañaque, which houses three mega casinos: Solaire Resort and Casino, City of Dreams Manila and the latest, Okada Manila.

While online gaming outfits hire mostly foreign employees to run the business, Leechiu said they help prop up local businesses too, such as hospitality, property, architecture and furnishing.

“We’re starting to see companies go to developers and say, please build me a thousand-room dormitory for my employees,” he pointed out.

Leechiu said the online gaming boom should go on for another three to five years, given the size of the market here and abroad. He shrugged off concerns regulations could change in the Philippines, especially with President Rodrigo Duterte a vocal critic of online gaming.

“The upbeat sentiment won’t change regardless of the government’s stance on gaming. What’s actually been more important has been the significant improvement in diplomatic relations between this administration and China, Korea and Japan,” he said.

BPOs feeling jittery

BPOs, meanwhile, are seeing clients trim their accounts in the Philippines this year.

According to Leechiu, clients are opting to “divert” their business “for now” to ride out any possible political instability. He said investors may have gotten the jitters after the terror warnings in Bohol and Palawan, attacks by communist rebels in Batangas, the siege of Marawi by the Isis-inspired Maute Group, as well as the blanket declaration of Martial Law in Mindanao afterwards.

“Regardless, there is still confidence. The industry will recover when the peace and order situation stabilizes,” Leechiu said.

The property consultant said he knew of several big-name companies preparing to enter the Philippines for the first time, despite the political noise.

“The deals will be made public once they sign the dotted line. But when that’s revealed, we will look back on these days and wonder why we worried,” he said.