[OUTLOOK]Time to target global markets

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[OUTLOOK]Time to target global markets

The world’s content industry has grown rapidly in quantity and technology, and its speed of change has increased every day. The growth rate of the industry is over 7 percent, about 3 percent higher than the world’s average economic growth rate. As such, it is highly rated as a growth engine industry for the next generation.
Through the Ministry of Culture and Tourism, the Ministry of Information and Communication, and the Korea Culture and Content Agency, the government has provided a great deal of policy support to various sectors of the content industry to date. This support has largely been concentrated on the establishment of industrial infrastructure, including production facilities, technological investment and human resources training. As a result, Korea could achieve great things in the game, animation and character design industries. In particular, the online game industry has come to be equipped with world-class technology and competitiveness.
The great success of investment in the online game industry proved that the content industry is one that is high value-added. Recently, Softbank, a Japanese Internet company, purchased for 400 billion won ($390 million) the majority shareholding of Gravity Co. Ltd, which provides the “Ragnarok Online” game service to 39 countries. Gravity acquired the shares by investing 500 million won in 2001. What is noteworthy here is that Gravity earned 46 billion won from overseas markets, which accounts for about 80 percent of last year’s total sales of 58 billion won. Rather than doing business in the domestic online game market where competition is fierce, Gravity turned its eye to the rest of the world early on so as to actively open up overseas markets.
Consequently, the market share of the “Ragnarok Online” game ranks top in the online game area in most Asian countries, including Japan, Taiwan, Indonesia, Thailand, Malaysia and the Philippines.
A similar case is that of NCsoft Corporation, Korea’s largest game software publisher, which earned about 17 billion won from overseas royalty payments alone in the first half of last year. This figure excluded the earnings of local subsidiaries; if they were included, the amount would likely have been much larger.
Gravity was sold to Softbank at a high price because the company greatly increased its corporate value by focusing its sales strategy on overseas marketing. Of course, the sale of Gravity to a foreign company could result in Korea’s online game technology and experience being handed over to a rival country. There was a case in which a Korean business was taken over by an overseas service provider because the business pursued a misplanned overseas marketing strategy from the start. Shanda, a Chinese game operator, conquered the Chinese game market after it imported “The Legend of Mir,” developed by Korea’s Actozsoft, and later became China’s largest game service provider by importing Korean games, eventually being listed on the Nasdaq stock market in the United States. Shanda later bought Actozsoft outright for 100 billion won.
Clearly, when China imported online games made in Korea, Korea was strong and China was weak. But at a certain point, the strong and the weak became reversed.
Korean game-makers are facing this reality because they have been busy pursuing short-term interests with no global marketing strategy from a long-term perspective.
Thanks to intensive investment and effort, the infrastructure for the Korean content industry has been developed to a high degree. Therefore, from now on we should concentrate our investment and effort on developing a global marketing strategy to sell content products made using this infrastructure to the world market, which has unlimited potential.
The slogan from when Korea was first developing its economy, “The world is wide and there are many things to do,” may still hold true, at least in the world’s content industry market, where there is boundless potential for opening new markets. The support policy should be changed to developing an overseas strategy for the content industry.
In this regard, it is significant that the Ministry of Culture and Tourism and the Korea Culture and Content Agency have recently established a “Global Leader Course.” This course was established from the necessity that for the globalization of our country’s content industry, there should be, above all, education for industry managers with global insight. Failures arising from the absence of an overseas marketing strategy shouldn’t be repeated.

* The writer is a professor of communication at Seoul National University. Translation by the JoongAng Daily staff.

by Kang Nam-jun
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