Korean game companies make their mark abroad
The rising popularity of Korean games in the Japanese market is considered a huge success, as Japan has long been considered a market whose walls were too high to penetrate with many of its own games dominating.
In the first quarter of the year, Korean game developers posted impressive results, according to Korean game industry insiders. The so-called big three game companies - Nexon, Netmarble and NCsoft - saw their combined revenue overseas increase 45 percent to 630.4 billion won ($541.4 million) compared to the same period last year.
Netmarble reported a 393 percent revenue surge year on year. The company’s mobile role-playing game (RPG) Seven Knights has already been downloaded three million times since its release in the Japanese market in February.
NCsoft thrived in North America and Europe, as sales of the multiplayer online RPG Blade and Soul rose 136 percent year on year in those markets.
Nexon’s sales in China increased 14 percent, largely thanks to its online action game Dungeon Fighter.
Sales of all games significantly improved in Japan. The three companies made an estimated 100 billion won in the first quarter alone in the Japanese market. Combined revenue from Nexon and NCsoft reached 60 billion won. Netmarble’s earnings were estimated based on the company’s game ranking on Japan’s Google Play, since Netmarble isn’t a public company and doesn’t disclose regional revenue.
However, while Korean game companies have specialized in online games, in Japan, console games have dominated the market. It was considered the graveyard for foreign online and PC-based game developers.
But Korean companies in recent years have changed strategy and started to focus on localizing their games to cater to local customers.
One such company is Com2us. Its mobile RPG Summoners War has seen its popularity in Japan rise.
“Japanese gamers, unlike Korean gamers, emphasize strategy over competition, and we have incorporated this preference from the development stage,” said Kwon Ik-hoon, head of the game business department at Com2us.
Netmarble, when developing Seven Knights, designed the game as well as the characters similar to that of Japanese RPGs. For example, in Seven Knights, gamers can create some 400 different characters.
The localization strategies employed by the Korean game companies are also working in other markets like China.
In the Chinese market, Korean developers aggressively design games that reflect Chinese culture. This meant designing the characters’ outfits in red and gold, the two favorite colors in China.
“In Japan, a certain level of [skin] exposure by female characters is a must, but in China, that’s one thing that needs to be avoided,” said Kim Chang-hyun at NCsoft. Too much exposure will not only raise the eyebrows of Chinese government officials, but Chinese gamers themselves are also more conservative.
In North America, Nzin Corporation, an affiliate of Korea’s largest mobile messenger conglomerate Kakao, recorded the voice of its massively multiplayer online RPG Black Desert in two different accents, one British and one Middle Eastern. The variation was designed to help increase game players’ concentration. The game, which launched in North America and Europe in March, now has more than 800,000 paid subscribers.
Additionally, the buy-to-play, or B2P, sales strategy, where the gamer has to pay only to play the game, also helped make North American gamers take interest in Korean games.
Companies have been aggressively expanding their overseas sales and marketing as the local market has become saturated. The Korean game companies are hoping to follow in the footsteps of global game developers like Finnish game company Supercell, which earns 95 percent of its revenue, or about 2.8 trillion won, from the overseas market.
The company’s revenue has struggled in its domestic market due to regulations, including mandatory shutdowns for children between midnight and 6 a.m. The game company has profited primarily with three to four games, including Clash of Clans.
Game industry insiders say for the K-game phenomenon to continue, companies need to work to make sure developers aren’t scouted by foreign game companies while also increasing research and development activities.
Korean “companies need to be persistent in investing in research and development while studying strategies that will help localize their games,” said Lee Jae-hong, chairman of the Korea Game Society.
“Chinese companies stealing Korean R&D talent is a serious problem,” said an official at a small-to-midsize game company who requested anonymity. “The game industry ecosystem needs to be reorganized, including easing up on regulation so that Korean talents will still be interested in working here in Korea.”
BY LEE CHANG-GYUN [email@example.com]
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