One of the first publishers to fully embrace the Asian microtransction model was South Korea's Nexon, publishers of MapleStory. This free-to-play online RPG has become a global success, with 72+ million users worldwide and $16 million in monthly revenues, according to Nexon's comments at Austin GDC last year.

The title is so successful, in fact, that many Western publishers have decided to emulate the game's business model. However, as Nexon America's director of game operations, Min Kim, argues here, many simply don't understand what drives the game's success.

In this in-depth discussion with Gamasutra, Kim clarifies and expands on that position as well as further discussing the company's dedicated console plans on Xbox 360 and Nintendo DS.

So, the business in America has been doing pretty well, as I understand.

Min Kim: Right.

But when I was talking to the folks in Korea, a lot of the players out there are really playing as a kind of job -- they're playing for money and stuff. Do you see that happening over here at any point? People are starting to get into real RMT stuff.

MK: I think a lot of that is really core. I mean, we do microtransactions, but that's more like a closed leaf system. I could see that happening here. Obviously, that's a big market, that whole secondary market. People say it's like one or two billion dollars.

People do that in Korea in games like Lineage, and I think without that, a lot of players would drop off. I think it's inevitable that part of the player base will go to that, but I think that's something that's very core.

Because multiple companies were disappointed by how many people do that, and I was trying to ask them if...

MK: Disappointed in what way?

It's like they would like the people to play the game to have fun, not as work. I was trying to coax out of people, "Do you wind up designing your game more for those people, because they're a larger portion of your audience?" And they were really cagey about it.

MK: I don't think they design it for that, but I think in the future they probably will. I think they probably stumbled upon it, and part of that could have been stopped at game design, in many ways, but I don't think they design for that. If they are, they've only started doing that now.

Yeah. I saw you talk at Austin, and you were saying that you do some Americanization and localization for MapleStory. How do you determine what needs to be changed? A lot of it has a pretty universal style.

MK: Right. That's the great thing about MapleStory. We look at it as very universal. But there are certain things that you know you have to do. For example, when we brought the service out here, they just had one light skin tone, and not that many eye colors. If you're going to bring it to the U.S., which is a melting pot of cultures and ethnicities, it just doesn't make sense when you have just one skin tone.

Like that, plus the wedding system in the game, we created a whole cathedral or Vegas-style wedding, whereas in China, they have a totally different type of wedding. If we brought that over, it wouldn't have made any sense, and we wouldn't have sold any wedding tickets.

I think a lot of it's really good, and we have a localization team that's sitting in the U.S. and thinks about what new items to put out and what new features that players might be interested in.

It almost seems like, with the wedding system, you could offer the wedding systems from other cultures at a premium, or something like that, so you can have an exotic wedding.

MK: Let me step back for a bit. In terms of localization, I think one huge part of it is the events. I keep saying this, but our business is a service business, not a product business, so one huge part of running multiplayer on the games is that you're running the service three, five, or seven years, and a big part of that is running events. And that's tied to holidays.

We do major things from... the biggest is Halloween into Thanksgiving into the year-end holidays for Christmas or Hanukkah. We try to localize that. That's one of the big localizations that we do.

Actually, I was thinking that, as you were saying, it's a smaller download, and there's a lot of stuff that you can do in the game, but it is, content-wise, easier to create than a lot of these high-end graphical MMOs. I'm just wondering if that enables you to react quickly to customer desires.

MK: Oh yeah. We're looking at forums and stuff all the time, seeing what people want. I'm not a game designer. I design functions that go into the game to try and increase social behavior and steer it in one way or another.

But to be honest with you, I don't know. Some of our design, because it's Dot, it takes a lot of time, and when you do 3D, you can just make one and then kind of tweak it and vary it. It depends on what you're doing, whether it's easier or not.

I actually didn't ask this when I was in Korea. What is MapleStory created with?

MK: Like what engine?

Yeah. What's used to make the art? It almost looks Flash-created, the characters, but I'm pretty sure it's probably not.

MK: Right. I don't know what they call it in the States, and it's probably the same thing, but it's called Dot. We basically just draw every pixel.

Oh, so it's actually hand-drawn pixel art?

MK: Yeah.

Oh good. That's nice. I really appreciate that.

MK: The cool thing about that is, if you look at MapleStory, all the characters are the same proportions, so that was a genius move. Because the first game that we brought to microtransactions was a game called QuizQuiz, and that was originally a subscription product.

In '99.

MK: Yeah, like in '98 and '99. Once they turned it subscription, out of the beta, everybody was dropping off. And we were like, "How do we get people to come back in? Let's try to sell avatar customizations and whatnot."

But the problem was all the characters were a different shape and size, so when you develop one hat or hairstyle, you have to make seven different iterations for seven different body or head types. So for MapleStory, they just made it one size. So if you just make one hat, it fits everybody.

That was a good one-size-fits-all-type thing. Speaking of MapleStory, do you have any updates on the DS game at all? When I talked to the Korean team...

MK: When did you talk to them?

November. They were still working on it. I've seen footage of it, and it seems like it's going to be more of a single-player action experience.

MK: Yeah. I think the DS is making a huge push in South Korea right now.

I've seen the ads in the malls and stuff.

MK: In Korea, right?

Yeah.

MK: It's very cool. I'm surprised it's taken off like that. All the kids want it, and that's huge, because when I was growing up, kids weren't allowed to have things like that. If you were to go to the video arcade, your elementary school teacher would run in and pull you out by the ears. Now that we've become parents, we're buying it for our kids, and it's cool.

Do you know when it's going to be done?

MK: Last I read, and I think it was posted somewhere in the news, I think it was supposed to come out sometime this year, but I don't have full details, especially in North America, because I don't know if we even want to release that.

You should! I mean, the DS market's pretty rough now for third parties, but I think that MapleStory's got...

MK: Yeah. And I think what's cool with MapleStory is that I was reading an article that was saying that the Nintendo relationship with us was really good and that they've been giving us a lot of support.

But then I read some articles that say that they haven't been giving a lot of support -- but for us, they have. That's because they want to move into the Korean market so badly, and it's a big IP.

I know that the Kyoto office is actually helping with the development of the game. This is the Korean side, so maybe you don't know, but I'm wondering how they're going about putting narrative into it, because if it's single-player, they're going to have to write a story and things. So that's pretty different.

MK: Yeah, from what it is right now, because it's a persistent world and kind of free-form. They're probably just going to build a lot of quests and stuff, but you're right, I'm not fully aware of the details. All of the projects internally are top secret. They don't open it up to everybody.

It's funny, because I mailed someone at Nexon asking if Mabinogi was going to come out for the 360 in the U.S. and he was like, "Well, if you talk to Stephen over there, I think he might actually know more than me." It was sad. So do you know if you're going to bring it here?

MK: I know for a fact that I'd be responsible for it, and no, we haven't been doing anything for it, so not anytime soon. Right now, we're launching Mabinogi for the PC.

We just did the closed beta and got a tremendously good response, so we'll see how that picks up. It's really about how many Xbox Live subscribers there are, and how we can offer that, because all of our games are free-to-play. Unless we can offer it completely free, it doesn't make sense.

What kind of model do you think will be possible with the 360 for that, or even PSN?

MK: They have the same model. We'll probably just port it exactly the way it is, selling different items and hats things like that for a price, or cards.

Is that what they're going to do in Korea?

MK: For the 360?

Yeah.

MK: I imagine. I'm thinking it's probably going to be similar. We don't want to break the formula of what works.

I know that Microsoft has not really allowed free downloads of full games yet, so you might be the first.

MK: I think we will be the first. We wouldn't do it unless we could do that. A lot of people don't understand. They're like, "Why don't you just charge a little bit? It's not that much, just a little bit."

But for some people, they don't want to pay anything at all, and you lose that customer that could have been business down the line. As I've said before, we make our content for other people, and there will be paying customers and non-paying customers, and we need that whole ecosystem for the business to work.

I think one of the critical things is going to be how easy it is to add money to your account.

MK: I was just going to say that. You read my mind. Yeah, that's the biggest thing, even for us in North America. We didn't really take off until we got the cards into Target and Best Buy and 7-Eleven.

Over 50 percent of our player base doesn't have access to plastic, between 13 and 17. They just couldn't pay, so we'd effectively lose more than half our business. So that payment side is, I think, one of the biggest battles that people will fight.

Yeah, definitely. Luckily the 360 does have prepaid cards, so that's pretty good, and it's pretty easy to redeem them and stuff.

MK: I think as more and more things come out, and as they start running products and services like ours, they'll probably sell a lot more. When you do a subscription, you do 13 or 15 dollars a month. For us, certain customers pay nothing, and certain customers pay like 25 bucks a week. It really has to do with appetite and consumption.

Yeah. I was thinking about Final Fantasy XI. That has a subscription for your console, and then it also has a subscription to the general Square Enix PlayOnline service. It's like two subscriptions, and that's super-complicated when you've got consoles.

MK: It's a huge psychological barrier. It's like, "Oh man, every month I'm going to have to be hit up with a subscription." I'm not saying that subscription models are going away, but for certain players, you just can't justify that. It's like, "I know I'm only going to be able to play three hours this month, or next month." It's hard to do.

It's a big barrier for me, because I don't want to sign up for more stuff. (laughs)

MK: That's why our business took off. In Korea, it all started with the core MMOs that were subscription. We were a very small business at the time, because we were going for mass. Now the business has turned into mass, and it's totally blown up for us.

It's funny. People still don't really believe that you guys are going to have the future model and that MapleStory is going to do well.

MK: It's because we're private and we don't put out any numbers. (laughs)

That's part of it. Well, that's probably a big reason, but there's a lot of skepticism about a lot of stuff coming out of Korea, because it seems like everyone is launching a Korean MMO.

MK: Right. With shoddy localization and stuff.

Right. But you obviously have the advantage of having an actual American office. And I was asking them what the benefits are of that. But from your perspective, can you say to Nexon Korea, "Hey, we really need to do this. Give us the resources to do this thing," or is it all them saying, "All right, you've got to do this now,"?

MK: It's a little bit of both. I think it really depends. They trust us with the U.S. business, so when it comes to the U.S. business, we're pretty much guiding that effort. If we need help with certain types of development,

Nexon's a huge company. I don't know what their numbers are. It might be like 2,000 employees now. So if it has to do something with systems or individual games, we're always pulling from each other to get resources.

In terms of whether Mabinogi comes out here...

MK: So is that driven there or [here]? I'd say it's a little bit of both. I'd say it's us picking the timing, and them asking us whether we think the title's going to work here or not. It's a little bit of both.

Okay. I've been really interested to see how the relationship is with Microsoft Korea and the Korean game developers there. I know that in Japan, it's not public, but Microsoft has given companies money to develop for them. I don't know if that kind of thing is happening over there too.

MK: I can't say, but I'm sure they probably are or will. It makes sense. They just need to build out that content there to get that Korean audience to adopt it.

Yeah. I recently saw that my friend Spencer was in Seoul, and he was watching TV and he saw an Xbox 360 TV station, talking about the 360 and trying to push the competitive gaming edge. It's interesting to see how they're rolling out there.

MK: I don't know if they have it, but at the COEX [World Trade Center Seoul], they had this huge 360 experience center. It was pretty cool.

When was that?

MK: That was probably at least three years ago, maybe up to even now. I'm not sure they still have it. But for a lot of Korean players, the console was something they could never get their hands on. Like I told you before, there was no way you could bring that into your house several years back. Now, people are doing it.

When I went there, all I saw was advertisements for the DS. What was funny was that I couldn't figure out where to buy it. There isn't a huge game retail thing there.

MK: That doesn't exist at all.

There's some in the Yongsan Electronics Market, but it's really small and a lot of it's underground and sketchy.

MK: I went to the COEX and they had a DS experience center that they built up there. I was pretty impressed with that.

Have you had a lot of people coming to Nexon with questions about how to build out their business here?

MK: In terms of free-to-play microtransactions and stuff?

Yeah, because you guys really pioneered it.

MK: Yeah, we've got quite a bit of people coming in and saying, "How do we do this or that?"

I've just been curious about that, because it seems like some people don't really believe in what you're doing yet, but a lot of people are realizing that they need to get into it.

MK: Right. There's a few, but at the same time, I don't think... I don't want to discount people, but I don't think they're doing all the right research, because I see all the misconceptions that people have about what our business is. If they're going to ask the right questions, we could probably tell them.

Or if they would just go in and experience our games. A lot of people talk about it like, "Hey, this can't work," or "It doesn't have the right balance," and then when I ask them questions like, "Have you played it or seen it?" they're like, "No, but it's like this!" and I'm like... (laughs)

Is that the biggest mistake that you think people are making? What are some other examples of misconceptions that people have?

MK: Literally, a lot of people think it's a product, and that it's going to turn into a cash cow, so you make a product that you finish and then you open it up and start selling some items in it and you get a continued steady revenue stream.

That's not what it's about. You've got to constantly feed in content and keep players engaged. It's about social experiences. Again, it's a service and not a product. There's just various things that they don't get.

When I was over there, one of the amazing things to me was that I knew that Korean developers weren't really making finished, boxed products for a long time, but I didn't know that there was a perception that among the developers that couldn't -- they didn't know how. It's kind of the opposite here, where people are so used to making a boxed product that they're thinking of this different environment in that same light. It's like the two environments have the opposite problems.

MK: I think people that are just getting into it now don't realize that they need to have a live team. We call it a live team. Basically, after you developed a product, it's released at beta and then it ultimately goes to commercial service.

You need a live team to continue to make more content for that. Some people look at it as, "Hey, let's make it, and then what do we do next? Let's move on to the next project." You can't do that.

What I've heard is, that's why developers there get a much better share of IP and the revenue stream for themselves, because they're continually still developing the game. It's not done, so the publisher can't just give them some money and then finish.

MK: Their incentive lies in keeping that project running.

It's a really different and interesting scenario that's building up around that. I think a lot of people don't really understand it yet. I guess eventually it'll come.

MK: Not just eventually. I think it's going to happen fast. I think it's going to take maybe two more years. EA's making a big push, and once they do it, everybody else is. If you're a public company, investors are going to force you to get into the business.

As soon as they find out that somebody's making money from it, they will ask, "Why aren't you a part of that industry?" Everybody's going to do it, but I don't know how well you will do it if you're forced to do it.

Do you think that Nexon's still going to be at the forefront of it here?

MK: Yeah, I think so. Right now, we've been running online games since 1995. We've been running the microtransactions business since probably the late '90s up to now. So we've got a lot of institutional knowledge.

At the same time, we're bringing our best products out here, but we also have a development studio in Vancouver. That's run by Alex Garden, Steve Rechtschaffner, and Chuck Osieja.

We firmly believe that the big moneymakers in this market are probably going to be made by developers in this market, because of cultural things and et cetera. We're trying to position ourselves by bringing products from Korea, while at the same time making products here.

When do you think you're going to see your first product that comes from North America?

MK: I can't say, but pretty soon.

Cool. In terms of the development process and the Vancouver team, did they learn a lot of the process from the Seoul office?

MK: Yeah. There's a lot of collaboration, and they don't have to reinvent the wheel, so they can use a lot of the server technology and things that we've already created.

It's a really different pipeline style.

MK: It's cool to see them work together, though, because it's two totally different mindsets. I think if you bring the two together, you'll have something pretty freaking awesome. It sounds really corny, but it's like Asians brought the noodles and Westerners brought the tomato sauce, and you've got pasta! (laughs) Everybody loves pasta!