Inside Asian Gaming

INSIDE ASIAN GAMING | September 2008 12 Cover Story LowTrust Culture Asians have some trouble with live online gaming “Asians’philosophy about gambling is that nine out of ten feel that someone will be trying to cheat them,” explains Mr Hsu of iFaFa. He says their fears are not always unfounded. “I’m always having agents come to me and say:‘Please set up a [video streaming] website for me,extend credit tome,but can you guarantee that I’m going to win?’”, says Mr Hsu. “They want some ‘hanky panky’ business,”he adds. “There are unfortunately some disreputable companies that are spoiling the business now. The players have found out there’s some cheating in the online gaming world, and they’re hesitating to go there. They are looking for the reputable and trustworthy online operators. “It’s a very small community,”he explains. Bad news travels “If you are dishonest or defrauding people, other people will find out right away. For example, if you wanted to engage in fraudulent activity via the studio, at least ten people would know right away. You would have to involve the dealers and the studio staff.” Mr Hsu says the problem tends to be with some private Asian companies, not the foreign public companies. “I think company culture is very important,”he points out. “Public gaming companies are supervised not only by the government where they’re domiciled, but also by the market. The stock price would be affected tremendously if cheating were discovered,” he adds. One way to combat this threat to the credibility of the video streaming industry, says Mr Hsu, is to set up a legitimate company in a reputable online gaming jurisdiction such as the Philippines and then work with a local advisor with experience of the culture and the market. Some publicly owned foreign companies would prefer for due diligence reasons to own the company that is giving them cross-cultural advice, but this may not work, suggests Mr Hsu. Culture gap “Many foreign companies come to me and say: ‘Mr Hsu, why don’t you sell your software to us? Why don’t you sell your whole company to us?’They sometimes offer a lump sum. “What they don’t always appreciate is our business isn’t just a marketing operation. It’s a door to another culture and another way of doing business. You can’t just take the door down and set it up somewhere else.”