Naver to re-enter game industry with new livestream platform

Industry

Published: 23 Nov. 2023, 15:54

Naver to re-enter game industry with new livestream platform

The Gocheok Sky Dome in western Seoul on Nov. 19 was packed with fans who came to see the final round of League of Legends World Championship between Chinese team Weibo Gaming and Korea's T1 [JOINT PRESS CORPS]

Naver, the largest portal site in Korea, is re-entering the game business with plans to roll out a new game livestreaming service next year as Esports explodes nationwide.

The move reverses the company's previous stance of shying away from the game industry ever since its gaming unit, now known as NHN, spun off from Naver in 2013.

The platform is expected to be tailored to the live broadcasting of games, equipped with a user-friendly interface and donation services. Livestreaming will be provided at FHD resolution, and video-on-demand will be available.

“At the earliest, we may start the platform’s beta test this year,” a Naver spokesperson said.

The business of livestreaming games has growth potential, according to global market researcher Statista. The sector's profit has spiraled upward by some 143.8 percent in the past six years; it brought in $4.8 billion in 2017, and $11.7 billion this year.

The live streaming market is expected to reach 1.7 billion users by 2028, per Statista, with popular titles such as League of Legends contributing hugely to that growth.

The industry estimates that more than 400 million people logged on to watch the League of Legends World Championship final, which is Esports’ biggest stage.

Live broadcasting is also popular among gaming YouTubers and streamers. Twitch, a U.S. streaming service run by Amazon, receives average of 35 million visitors per day, while 7 million streamers run content on the platform each month.

“Similar to the phenomenon where there are many soccer fans who watch the sport even though they don’t play the sport, there are more people now who enjoy watching games even though they are not direct players,” said an anonymous spokesperson for a company that runs an Esports league.

Naver initially dipped its toe into the gaming business with its acquisition of Hangame Communication in 2000. The merger led to rapid growth for Naver, enabling the company to fuse its search engines with Hangame's gaming services. Naver, however, spun out that game business as NHN Entertainment in 2013 in order to refocus on its other platforms. NHN Entertainment again changed its name to NHN in 2019.

Naver has since been focused on fostering game-related communities rather than providing direct gaming services, targeting demand from companies seeking tools to communicate with users and users who want to connect with other gamers and learn more about their titles.

In 2021, Naver began again to expand into gaming by integrating its Naver game community platform, Naver Game Lounge, with its Esports page. As for the upcoming livestreaming service, a Naver spokesperson commented that “it’s part of the strategy to strengthen functions of the game community.”

Some believe that Naver is entering the business in order to capitalize on profit opportunities following the departure of Twitch, once a dominant streaming platform, from the local market. Twitch Korea reduced the maximum quality of its videos to 720p in Korea starting in September last year and has also blocked Korean users from viewing VOD content since December. The company cited “increased management fees,” but users speculated that the changes were due to disputes global streaming companies face against network usage fees.

“Twitch has consistently abided by all local regulations while diligently paying all network usage fees and other necessary transactions,” the company said in a statement as it announced the retraction of its services. “However, we needed new solutions, as the management fees in Korea continue to increase.”

The name of the new streaming service is yet to be decided, but Naver is considering using a new name rather than fronting the Naver brand. The company is planning to input know-hows and technologies that it has built up while running its own streaming platforms, as well as integrating the service with the existing Naver’s short-form service and Shopping Live.

“This means that a new competitor is at the brink of entering the local market, which is dominated by foreign streaming giants with the exception of AfreecaTV,” said the insider at the company.

BY PARK MIN-JE [lee.jaelim@joongang.co.kr]