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Korea Rising: Five Crucial Interviews

The South Korean game market has a multitude of vital lessons for the Western game biz, and Gamasutra presents an unprecedented series of 5 interviews with top Nexon, Webzen, Microsoft, T3, and Com2Us execs on the market in 2007 and prospects for 2008.

With the rise of microtransactions and MapleStory, South Korean gaming has been growing in respect and relevance in the west. There's a lot to learn from this rich, constantly evolving market, which grew up along lines so different from the U.S., Japan and Europe that it's difficult to compare -- and compete with.

To that end, Gamasutra presents five complete interviews with a variety of members of top companies in the market, conducted principally at the annual Seoul-based consumer games show GStar, to offer their perspective on the industry in 2007.

Nexon's manager of international business development, Stephen Lee, points out that "We think that the U.S. market, as a market, it's big enough for gaming, but mainly until now, it was focused on the console game side. I think it has a lot of potential and still has to grow." But he cautions that "Considering the market size and the existing number of gamers, I think we have a long way to go. We think in a couple of years, the situation will dramatically change." Despite relying on microtransactions for much of its revenue, Lee "can't rule out the merits of the subscription model."

Webzen's development strategy manager of global studios, Sang Woon Yoon, points out the company has one game in development in China -- as do some of the other participants -- given the rise of that market. He observes that though the Korean market is lucrative due to its high number of online users, the packaged software market in the U.S. allows Webzen to "...calculate ROI easier than online games. Also the next-generation consoles like the 360 shows great graphics, and a lot of CPU power... We have no choice but to go for those," noting, "We can't really push for the Korean way. In America, it just doesn't work."

Yoo-Ra Kim, CMO and director of T3, the company behind the massively popular Audition, speaks on the role of traditional media in promoting the casual-focused MMO. "So now, we have a regular TV show, where we invite celebrities on TV, so they're talking about gossip things and their current views and they are bringing their new album, if they are singers. So they just introduce, and with Audition users, they play the game, on TV." The company, however, is taking a different tack for the game in Europe, where it's struggling to find a foothold. "We will make Audition packaging that looks like a DVD case, which will have the client and some special item like clothes, and some special present inside. We'll make it very fancy, so it looks like a console game..."

The interviewees, which also include mobile developer Com2Us's president Ji Young Park and Dae Hwan Lim, Microsoft's marketing coordinator of the Entertainment & Devices (i.e. Xbox 360), were universally interested in vaulting into the console and handheld markets, and growing audiences both inside and outside Korea with these projects.

The groundwork is still being laid, however -- Nexon is working with Nintendo on MapleStory DS, but others are still evaluating the market. Lim sees the Xbox 360 market as presently laying the groundwork for consoles catching on in Korea -- "The console games market is not really successful here. We want to establish the base first for the Xbox 360 by releasing games more fit for Korean gamers. The company itself will make an investment for that. We're trying to establish the fact that games can be played by anyone, not just by adults."

For many more insights into this vibrant and unique territory for gaming, the full transcripts of these interviews follow.


Nexon: Stephen Lee, manager of international business development

From your perspective how is the expansion into the U.S. market going, from the Korean side?

Stephen Lee: We launched the MapleStory service back in late 2005, and it was the first time we actually started off by just putting our service there, without conducting any marketing activities or anything. We just launched our server there, and managed it remotely from Korea. We found out that... actually, the users were coming in without any marketing activity or anything. We thought that the market might now be mature enough.

In fact, we tried to service our game back in early 2000 -- I think it was 2001 or something like that -- and we haven't actually quite succeeded. We had that experience. But because of the success of MapleStory, we really saw how the market was going and how people were becoming more adoptive of the online experience.

Obviously through our studies, we saw that infrastructure and necessary surrounding environment for our online gaming was becoming more and more mature. We think that the U.S. market, as a market, it's big enough for gaming, but mainly until now, it was focused on the console game side. I think it has a lot of potential and still has to grow.

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What do you think of the results so far? Obviously you're trying to get in there before everyone else with microtransactions and that sort of business model. Are you pleased with the results so far, or is there a long way to go, you think?

SL: We are very much satisfied as of now. We have seen pretty good numbers for our game service, and we have actually received a lot of spotlight from all of the gaming industry. We have closed a deal with some major companies in the States as well.

You mean like the ad deals?

SL: Yeah, like the Viacom deal [and other deals which are] not necessarily for the North American market. Again, we have a lot of interest. Considering the market size and the existing number of gamers, I think we have a long way to go. We think in a couple of years, the situation will dramatically change.

Nexon was, I guess, really at the forefront of the microtransactions, even in Korea here. I heard that the first largely successful game that used that as a business model was QuizQuiz [released by Nexon in 1999]. I don't actually know -- at the time, was it a pioneering thing to go that route, or had there been some other models already?

SL: Actually, the way that we discovered our new business model was somewhat incidental. We didn't actually plan to switch to this model. First, it started off as a subscription model, but then we discovered that we had been losing users dramatically. We tried to fix the problem and figure out how we could re-attract the users that were leaving the game. As a way of that, we created a system where we could allow users to decorate avatars and things. They could purchase their decorative items through microtransactions. Surprisingly, users started to gather back, and we thought this could actually be a business model for the future market.

It seems like now microtransactions have started, they'll never stop. I don't think there's any going back to subscription from here. What do you think?

SL: I can't rule out the merits of the subscription model. These days, almost all games adopt the microtransaction model, but games like World of Warcraft are successful. It's one of the most successful games in the world. It depends on content, actually, not necessarily the trend. We could have both models combined, just like Mabinogi service in Korea. It's actually a combination of microtransaction and subscription-based model.

Do you think console will ever be important in the Korean market? Will it ever be something where people can actually make a profit? The console market in Korea is so small right now.

SL: Nintendo actually expanded their branch into Korea early this year. They're performing pretty aggressive marketing activities throughout the year. It's not as expected, compared to what Nintendo has been achieving in other markets, but it's doing fairly well, from what I've heard, and it's a good relationship with them as well. We'll have to see, but there has been piracy in most of the Asian territories, and that had been one of the main hindrances for the console market from growing. If gamers become aware of the fact that the copyright issue will eventually deprive them of their entertainment, and if the market... we hope that the gaming market as a whole will grow together. We'll eventually have to see how it goes, because we're also developing console games.


Do you think that the existing consoles are set up now, or if they will be for the near future, for a microtransaction-type model?

SL: Yeah, I think that's possible. Microsoft, from my understanding, that's what they actually are pursuing. There's no reason why they can't do it.

Nexon is doing MapleStory DS. How far into development is that, if you know?

SL: We're planning to launch it by the middle of next year. We're aggressively developing it, and we're in very good shape.

I've seen videos of it. I talked to Calvin Yoo at the Austin Game Developer's Conference, and he was very surprised to learn that there were already videos of it out on the Internet. Will it actually be an MMO-type thing?

SL: You mean MapleStory DS? It's not an MMORPG kind of game. It's a typical kind of action role-playing game. It will have fairly different gameplay compared to the original version. It will be specifically adapted to the platform itself.

So more local play than networked play?

SL: Right. Single player. We have some features that support multiplayer, but the main feature will focus on single player.

I was actually talking to Gravity yesterday as well. They're bringing Ragnarok to DS, and you're bringing MapleStory to DS. And your target launches are somewhat similar. But I don't think they're as far along as you. It will be very interesting to see, because I feel like those will be the two rivals, in terms of... also, can you say who the developer is?

SL: You mean for MapleStory? We're developing in-house, in cooperation with Nintendo.

I see. Yeah, because a number of companies have said to me that in Korea, there's still not many developers used to making full, boxed end products. That kind of workflow and making complete products from the very beginning is very difficult. How have you tackled that?

SL: To be honest, we also don't have that much experience with the complete, packaged kind of game. Most of the developers have grown up playing the famous console games and things. The basic idea is that we obviously have learned a lot from the development process, and we still have to learn more. Nintendo has been very helpful in that perspective. We obviously made a lot of mistakes as well, but we are very keen to... MapleStory is one of our representative IP, and if we're launching it, we have to make it successful. We're doing our best to make it a high-quality standalone type of game.

And it's also very appealing to global markets, like the U.S. and Japan, because it's got the right kind of look. Are you going to launch that in other territories as well?

SL: Yeah, we'll have to see. We'll first launch it in Korea, then try to expand it into other markets like the States, Australia, Europe, and so on, where Nintendo has their own existence and establishment.

Actually, some other developers I spoke with said that Nintendo was not helpful at all. It's interesting to hear you say that. Their office is so new that maybe they just can't support as many people.

SL: I think the function that Nintendo Korea... I think the first duty is allocation of function to different entities within Nintendo. All their developing resources at Nintendo are located in Kyoto, in Japan. We're actually talking to both sides. While gaining subsistence for the developing side, we talked to the people from Kyoto, and in terms of business, we're also talking to Nintendo Korea.

That makes sense. So you're getting more of the actual hands-on help from the Kyoto side.

SL: Right. Also the relationship with Nintendo... I can't disclose specific deals with them, but for us, it was a special kind of deal. It's pretty much different from a mere third-party kind of contract.

It makes sense that they would want to. They're trying to make a big push in Korea, so it makes sense that they would try to partner up with someone and get a really good product out there from the Korean market, for the Korean market. How did the Counter-Strike deal come about?

SL: Counter-Strike, as you know, was once the market-dominating product in Korea. But because of its commercialization policy for PC cafes and things, it sort of lost its power in the market. But there are still many core fans of the product, and a lot of potential. It was successful enough through the Steam platform in the States and Europe and western territories, but in Asia, it didn't do as well there. There were piracy issues, and compared to playing online games, people weren't used to purchasing packaged products and playing the game. I think the interest of both parties were sufficiently met with each other, and I think that resulted in closing the deal.

Is it still developed by Valve?

SL: No. It's actually in co-development with Valve.

Interesting. So is the intent to launch in this market first?

SL: Yeah. Actually, the service will cover Korea, China, Japan, and Taiwan -- four territories in the Far East. The first service launch will be Korea.

That's interesting, because they have Counter-Strike in arcades now with Namco, I think, who is releasing it. They have their arcade Counter-Strike product, and then you'll launch your PC Counter-Strike product. It'll be interesting to see how that goes. I actually didn't even know that this was happening.

SL: We made an announcement back in July.

I'm just out of the loop! So here at Gstar, you have a very huge presence. It's very impressive. I was surprised to see it. You have this whole space we're in now, and you have the biggest space on the show floor. Why is that? Do you think a lot of consumers will come that you can influence, or is it to just show your power?

SL: We can't deny the fact that Gstar, in terms of the size of the show, is getting smaller and smaller year by year. That's what the market actually perceives. Since it's the biggest game show in Korea, and we're one of the largest online game companies in Korea, we have a lot to show, obviously. For gamers who would actually come to the show and have anticipation in terms of what new products will be released and how the market will turn out to be in the near future, I think it's worthwhile to let them know what we're doing and how dedicated we are to providing new entertainment to them.


What is your perception of the Korean market right now? I've heard a lot of different ideas about how it's going. Some people say there are so many people bringing out MMOs right now, and there's going to be a big crash. I've heard some other people say that it's unstoppable, and the market will just keep growing. What do you think right now?

SL: I would actually like to know that! (laughs) The market has actually been a pioneer kind of existence in the world. Before it even formed a decent console market, the market had been developed by the online gaming industry, and so the characteristics might be slightly different from existing western markets or in Japan. Apparently people usually say that it's pretty much saturated, and conditions are getting more severe year by year.

Why do you think the market grew up so fast with online games before console was even fully developed?

SL: There had been a lot of creative developers who had the talent, ideas, and creativity to develop competitive content and games. Since the console game market had not been mature enough for them to develop new titles and new game products inside Korea, I think that resulted in... not failure, necessarily, but slower growth of the console game market. As you know, we developed the world's first graphic MMORPG back in 1996, and also we had a huge boom in terms of the IT industry in the late 1990s. That had actually provided the perfect condition for modern game companies to grow, and we had been one of the leading companies in Korea. All those conditions combined, I think, provided sufficient condition for the market to grow.

What do you think of that from the player's side? One thing I've heard is that a lot of people are using MMOs not so much as a fun thing to play, but as their job, by buying and selling items and things.

SL: The core users are very loyal to a game, and we can't complain if that's their way of playing, right? Actually, MMORPGs these days are so sophisticated, and you can do a lot of things. It's not just playing a game. You can conduct missions and stuff like that. It's also effective means for socializing with people, and making new friends, and things like that. I think it's an interesting phenomenon.

h505_65280_03_jpg.jpg In terms of your console development, aside from the DS, is that with an eye on the western market, then? You said that Nexon is now working on console development, so since the market doesn't exist much here, are you more focusing on that market?

SL: First of all, referring back to my saying we're developing console games now, that doesn't necessarily mean that we are seriously focusing on that console gaming field. We're just trying to develop our games -- the DS version of MapleStory, and the 360 version.

So there's a 360 version also of MapleStory?

SL: Yeah, that's been announced here. That doesn't necessarily mean we're converting our business direction to the console gaming field. Since we have a lot of content that's been successful in the online gaming market, we're trying to figure out what possibilities we may have in other fields, such as console games, animation, merchandising, and all those related types of products. As a result of that, if it can actually help us expand our users in western markets, then that would be a perfect result.


Webzen: Sang Woon Yoon, development strategy manager in global studio management

Can you tell me some basic stuff, like the number of employees in each market for Webzen right now?

Sang Woon Yoon: I'm not exactly sure about subsidiaries, but in the whole world, we have 600. And then we have development studios in Shanghai, and Webzen America, Webzen Taiwan, and Webzen China. We also have small offices in some other places in East Asia. Right now, they're focusing on the East Asian area. They're pushing forward to the U.S.

How much development is in China?

SY: For the most part, it happens in Korea. We only have one project in China. That project is targeted to the Chinese market, mainly. For other projects, we have two western developers.

Right. Realtime Worlds and Red 5. How big is the development staff in Korea?

SY: In Korea, overall, about 300.

I'm just trying to figure out the scale of a lot of companies here. There seems to be a big variety, but a lot hover around 100. Why has there been such an interest from Webzen in consoles recently, like the 360? Well, it's not exactly recent, because Huxley was announced a long time ago. Things are going to start coming out in the next year for the consoles. What is the reason behind that?

SY: For the most part, I think our company's vision -- especially the CEO's vision -- is originally, he's an animator. We're looking to a lot of western games, actually. What he really cares about is graphic styles. So far, we have been working on online games for PC, but we still have a lot of interesting western style -- like console style -- in graphics. It's more polished. In addition to that, online games are quite risky. Console games are... the U.S. market is big, and generally sells a lot. We can calculate ROI easier than online games. Also the next-generation consoles like the 360 shows great graphics, and a lot of CPU power. So generally, it's all over the place. We have no choice but to go for those. Up until now, it's not really easy for us to get into the console market, as we are strongly based in MMO PC games. We're trying.

Yeah, I've been discussing with lots of people about how not many companies are able to create finished, boxed products in Korea yet. Did you have to get any additional outside help in terms of learning the project flow and how to create a project that's finished?

SY: So far, for those console technologies within the company, we don't have the original staff that was working on the console. So far, the strategy was for us to try hard to collect people from other companies. Actually, sometimes we try to hire whole development studios, but now we have a different strategy for things. Probably I think in the near future, we'll talk to outside companies to make things work. Until now, we were just trying to solve everything within the company.

But also bringing in some foreign developers, is what you're saying? Inside the teams?

SY: Of course, if there are no communication problems. We try hard. We have some foreign developers. They have some console experience. What they do here is they develop online games. We are targeting a game title for consoles pretty soon, right after we handle some PC first. Like Huxley. Always, PCs are first, and then we go for the consoles.

But you're trying to keep the porting to console in-house, but maybe in the future you're going to change that?

SY: We are looking at several solutions at this moment. There are other games than Huxley, like some casual games. We have some strong interest in Xbox Live also, for casual games. For the porting or the conversions, we'll look at some way to get some help from other companies.

What kind of stuff are you looking at in terms of Live Arcade? Do you have any projects we've announced yet, or anything coming soon?

SY: Not yet. We've been discussing within the company. So far, the only plan we had for Live was Huxley. We've crossed platform to the PC and 360.

So you're looking at the smaller, more casual game-type stuff? It seems like the downloadable Live Arcade space is pretty natural, coming from online space.

SY: Yeah. We're discussing within the company. There is a possibility.


I'm curious to know your thoughts about PlayStation 3 versus 360, considering the Sony brand has always been much stronger in Asia. Also Sony had an office here for several years, and the 360 only just launched here more recently. But you're focused on the 360. Is that western consideration, or... what is that?

SY: Not really. Honestly, I think the 360 is easier to develop for. The PS3 is a little bit harder. It's not easy to find people who have experience in previous... like PS2 or PS3. It's not easy for us to start to work on the process. Once we had a project for the PS3 called Endless Saga. We had trouble with it, and [it was cancelled].

It seems like right now, there aren't a lot of consoles out, so it's hard to justify the risk of extra development costs right now. Any interest in the handheld space yet? Like the DS and PSP?

SY: Not yet. We had a mobile game before, but it's not really...

I know Webzen is mostly focused on really large-scale games.

SY: Yeah, that's company style.

Yeah. Definitely seems like, as you say, the vision is for big blockbuster stuff. It makes sense. Speaking of which, how is the use of Unreal Engine 3 going?

SY: Unreal 3 for Huxley?

Yeah. Well, you're not on the Huxley project, but...

SY: Yeah, I'm not on it. I have some information. At the beginning, they had a really tough time to understand the engine itself. Also we were not just making an FPS game from Unreal 3. We were making an MMO/online game. As you know, the Unreal Engine is not for MMOG, right? At the beginning we had a tough time. Right now Huxley just had a [closed beta], and we're preparing for our second CBT at this moment. The understanding came a lot better than before. We get better.

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The upcoming MMO FPS hybrid, Huxley

I was wondering if they're providing much support in Korean, or if it's all English language.

SY: It's all in English! (laughs)

Is that a difficult factor?

SY: They try to understand English. It's probably way better than things that are in Korean. Most of our information comes from forums. However, a lot of people don't really speak Korean.

You're working on APB with Realtime Worlds, and Red 5 on stuff. How did Webzen get in contact with and start relationships with these western developers?

SY: Because these western developers, they used to work on console games... especially a person like David Jones, the head of Realtime Worlds. He has his own objective in online games. He was looking for a partnership. I think it's kind of natural for us to meet each other, because they were looking for some online publishers, and we were looking for some good western developers. It's natural.

Through the agency, they were looking for a publisher [for] Korea. Webzen was a possible candidate. [Korea doesn't] have a lot of huge publishers, and at the time, we were looking for some really good IP from the western market. We thought that rather than make the Korean game first and then try to get into the western market, we were thinking about having some really strong western-placed developers. We met a lot of companies, and Realtime seemed suitable for us.

That's pretty smart. Still a lot of companies now are trying to bring Korean MMOs into the U.S., and they're having varying degrees of success with that, because there's a new one launching every day pretty much. Is it still a 2008 target for APB?

SY: Yeah.


How is the development going on that so far?

SY: We're getting busy, in crunch mode.

It seems like a very ambitious project.

SY: Yeah, it's very big. We have a lot of big features, and some ambitious stuff.

They actually wrote a postmortem of their Crackdown game for us, and they were mentioning that now they're fully cranking on APB. It seems logistically very difficult to create an MMO in a sandbox-type environment, because in that type of game, everyone just likes to screw around and do dumb stuff and throw trash cans on top of buildings and stuff like that. If you've got thousands of people doing that, it seems like...

SY: Crazy! (laughs)

Thousands of people trying to break the game at the same time.

SY: Yeah, you're right. We're trying hard, as realistic as possible, but there's some technical limits for us that don't really let us do those things in an online game. But we're trying hard to make it as close as possible to a console game.

Are you having to do a lot of instancing and stuff? In terms of the servers that people are going to be on, since it's going to be very... I haven't seen it, but I imagine it's going to consume a lot of resources to have these people doing this stuff at the same time. How many people do youthink you can have in the same world?

SY: Generally, you're right. I'm not sure, because it's kind of a sensitive issue. I think that Realtime will [take] care about releasing the information about the project. Maybe the exclusive stuff. You might have to wait a little bit more.

Might as well ask! With Red 5, how did that come about?

SY: Red 5 is in the preproduction. They're working on stories, and prototyping game design. So far, they've been good. At this moment, we only watch them. So far, there's no problem. They're very experienced.

Did they come to you, or did you go to them?

SY: They came to us.

Have you seen much of the Project Offset engine yet? The engine they're using?

SY: Yeah, I'm seeing those things, but only for the gameplay prototypes, so it's not showing the true power of the engine. Three years before, they had it at E3. After that, I don't know. The Offset Engine itself, I didn't see a lot of detail. I've only seen a little part.

I was just wondering if you've heard a general impression of the engine itself yet. I know they're the only people licensing it. I know part of it is the vision of the company, but Webzen has this kind of eye toward the western market, in a different way from a lot of Korean-based companies. Releasing console games, and releasing the big-budget, graphically impressive games. You do have your MMO space as well -- traditional Korean-style MMOs. What was the choice to diversify like that? So many others are trying to focus on making the big money in the microtransaction space and stuff like that. It's a similar question to before, but basically, why are you not going for the easy money as much on the Korean MMO side?

SY: Easy money, like the typical Korean title? Making money in that way?

Yeah. You know what I mean?

SY: Yeah. We did that in Korea and the Asian market, with traditional Korean MMO games. We did that.

It's just not as much of an intense focus on that.

SY: Basically, the other markets other than Asia -- the European market, and the U.S. market -- are not really mature for the micropayment stuff. They also have a lot more games when we go for the western market. The rivals are totally different. Over here, we are competition to similar Korean games. If we go over there, there are a lot stronger games, and popular western MMOGs, and western users are used to seeing those things, and used to paying money like that, with monthly subscriptions. Micropayments... there is a barrier. There is a risk. We're trying to bring those things into the U.S. market very carefully. We can't really push for the Korean way. In America, it just doesn't work.

And another thing that I was trying to get at was... do you think that the Korean market for these MMOs and microtransaction games, do you think that it can support as many people as are currently in the market? There are a lot of people trying to do similar types of games.

SY: Still, it works, I guess.

I don't mean from the Webzen side, because Webzen obviously has large products. But I mean, do you think it will be able to support as many companies that are still trying to do this?

SY: I should think so.

I've heard a lot of different opinions. Some people say that there's going to be a big crash soon, and a lot of people are going to fall out. Other people say that it could keep getting bigger.

SY: I think that the goodness of these micropayments is that pay is very flexible. Depending on the game size and the number of users, you can balance it easily, rather than with a monthly subscription. I think there's a chance for us to study more of this. However, we have thousands of games that are with micropayments. I think we still have chances to make all of them be profitable.

I wonder if there's going to be another model beyond microtransactions that will work even better. First, subscription was the only thing. Then microtransactions came along and changed everything. Do you think there's going to be another big shift in the future? Do you see anything like that on the horizon?

SY: Definitely.

Any prediction what it might be?

SY: A mixed, hybrid model's already there. I think from the marketing side, a model would be a mix between timed promotions and microtransactions at the same time. It's possible.

So maybe ad-supported and things like that?

SY: Yeah.


I'm wondering if there will be some more convergence-type stuff. We're already seeing things like games that are playable across Windows Live for the 360 and PC, and some companies are trying to do things where you can keep playing your MMO in certain ways on your cell phone. Do you think there's going to be more convergence in the future?

SY: Yeah. Convergence will tie everything together. It's all about flexibility, micropayments. So we have chances.

It also seems like the way people use money is changing. Here I've got my subway card. In Japan, with this, I can also buy stuff at a convenience store, or a vending machine. In America, Nexon has released their Nexon Cash. It seems like with all of these things that money is becoming really virtual. It's very strange.

SY: Every day, we're looking for those solutions in new ways for billing systems. Sometimes, we look at credit card companies and how they do bonus points and all those things. We're also looking for other possible methods. Building it up is probably the things we have to solve. We're looking for all of the possibilities.

It seems like game companies these days are having to become much more financially aware, like really thinking about and dealing with ways of using money. I feel like they're almost pushing virtual money forward much more than any other media. It's very interesting to me, to see that progress. Maybe some day I'll be buying my dinner with Webzen dollars! (laughs)

SY: (laughs) Or you get some item after you have some dinner!

It could be! I guess that's already happening. You can buy a Coke can and get some item in your game.

SY: Yeah, we do a lot of that.

It's very strange.

SY: But it works! (laughs)

It works! And it works for everybody. In the past, those kinds of tie-in promotions would be like you buying some cereal and it comes with a little toy inside that a kid plays with for like five seconds and throws away. But now, it's like you don't even have to have anything in the box. You just have a picture, and maybe you can scan it and it goes into your... it's the future.

SY: That's because we have too much confusion. More than 50 percent of users want to play the game for free. We do an open beta for several months, many, many months, until we realized that enough people willing to pay for the game. But we still needed to do the free game service. That's why we're looking for all sorts of things that generate profit to keep the test part going on, to make it finally commercialized.

In the U.S., Sony Online Entertainment made all of their games free, but they didn't have any microtransaction model, so it was just free. They weren't making any money. They were just losing money only. Everyone was kind of laughing at them, but if they could introduce some sort of model, maybe they could be profitable. It's very tough in the U.S.

SY: We're trying hard to bring those things into projects like APB. APB is going global, but we're not going to have different games. It's one game for a global market. That's why both companies are working together, bringing Webzen's know-how and experiences with the development team's. APB is really western originated, and we can make this work in the U.S. and Korea at the same time.

So you're going to try to have people from multiple regions playing together in one space?

SY: If you don't care about lag, then you can.

Are you going to have to deal with language stuff at all, or are you going to let people speak whatever language they want?

SY: That's probably... in a few more months.

Then we'll know the answer to that?

SY: Yeah.

I think that's interesting in some ways. It would be like California or something, with different districts where people speak certain languages and stuff like that, and you can go there.

SY: That's a good idea. I think Crackdown did a similar thing. In some areas of the city, they speak Spanish.

I think it's a good idea, because it's like a real virtual world that way. People do speak different languages in the world, you know? Like I came here, and I can't say anything to anybody, for instance! After APB and these kinds of things that we know about, what's next for Webzen? I don't necessarily mean specific titles, but just in terms of your thought about the future for Webzen.

SY: At this moment, we still have concept things to finish up. We do think about the future. Not much changed. We've got the online games, and also the console-styled thing. They're very strong IPs, and we go for those. Not much changed from three years ago. It's really the same.


Do you have any projection for how the console stuff will do in the west, versus your online efforts? Do you anticipate the console stuff will be bigger, or the online stuff will be bigger in the other markets?

SY: I don't really anticipate anything for that. We just follow...

Just waiting to see what happens?

SY: That's it.

One thing I've been wondering about is that still in the west, there's not a great perception of Korean companies yet. There's not a lot of trust in those companies, which I don't think is justified, but it's there. Right now, if Capcom releases a game, people are like, "Oh, Capcom made it, so I'm going to buy it." But that kind of thing doesn't really exist very much yet for Korean companies. Do you think that's going to change when you release stuff like APB and Huxley? Are people going to be like, "Oh, that's a Webzen game?"

SY: I think they will. There will be a positive impact on us. We're not just pushing our games into another market -- we're trying hard to adapt to your style, and combine those things into our styles and make something new. When this becomes successful, there will definitely be a positive effect.

Huxley is developed in Korea, right? But it's for the western market.

SY: Mm-hmm.

Kind of. It looks very much like a western style. I know you don't work on the project, but how was the thinking, in terms of, "Okay, we're going to make this kind of look and aesthetic, and we're going to make it appeal to the western market without actually being from the western market."

SY: I don't think we especially tried to make it feel like western games. The thing is... those styles are good. They both like it. Wherever you go, they like it. We just have a little bit different approach. Both approaches are good. Wherever they go, they like it. Stuff like Final Fantasy everybody likes. Games like World of Warcraft, even though it is a western game, over here it's huge. Both styles are good. All we do is we don't really try to make it look western. We catch a lot of good things, and they like that stuff. They find good stuff from western games or comic books or whatever, and then we add our good stuff into those games. That's the way we approach.

apb2.jpg Even for APB, do you do usability and market testing in each region? Do you change based on that stuff for specific markets, or is it more like, "Okay, we need to make the whole game more accessible in this way."

SY: We try to adapt as much as possible to both markets. Realtime has a strong vision and understanding of the western market already, but a game like APB doesn't really exist in the Eastern market. We did some research, and collected some information, and tried to deliver this into a western-style game.

Is Webzen providing more support for the online systems and all the network stuff? I know they struggled with Crackdown, because they hadn't worked on that kind of stuff before. I think they had to get some help from Microsoft and stuff.

SY: Yeah, we do that.

It makes sense, because Korea's obviously incredibly strong in that kind of stuff.

SY: Realtime had some experience too, at this moment.

Yeah, now they do.

SY: Now they have some experienced staff.

I recently learned that one of the reasons that the creative network staff was so strong in Korea, was because the IT industry started booming around the same time that everything was coming up, and Internet was deregulated. It makes a lot of sense, but I didn't put two and two together to realize that's why it got so much bigger at the time. I think that's probably all I need to say, unless there's any other thing you want to say about Webzen right now.

SY: Webzen... 2008 will be a really important year, financially. We announced big projects at the beginning of 2005, including APB and Huxley, and they're all coming out in 2008. That will be a really good year, and an exciting year for us to watch over this and go to other divisions in the U.S. market and other countries and see what users' reactions and all those things.

People will finally take some vacations.

SY: I hope so! (laughs) The bad thing about online games is that there's no vacations. It just never ends.


Microsoft: Dae Hwan Lim, marketing coordinater in the Entertainment & Device Division

How long has Microsoft had Xbox operations in Korea?

Dae Hwan Lim: Version one? They launched the Xbox in 2001, in December. The 360 was launched in 2006 everywhere.

Sony was launched a lot earlier. Why did Microsoft decide to take the approach to jump into Korea?

DL: The PlayStation 2 was launched one year before the Xbox version one. At that time, people were aware of video games but not many were in the userbase then. With the PlayStation, they could see the possibilities of the market. Microsoft saw the prospect in the market, so they decided to come to Korea. After the launching of version one, we had a competitive relationship with the PS2, and in 2006, we launched the 360 and started forward.

How many 360s have been sold in Korea so far? I think I saw a number at the Gstar presentation -- like 150,000, maybe?

DL: 100,000, here.

That's about what I thought. It's not a secret that the Korean and the Japanese markets are very small for the 360 still.

DL: It's a market with a huge possibility, because 80 percent of people are aware of games and understand playing.

What do you think it's going to take for Microsoft to have a big success in Korea?

DL: There are some games for the Korean market, like the games developed in Asian territories. So there are some anticipated games, like games developed in Japan and Korea. They're making games preparing for the holiday season.

It seems that most Korean companies in the past made Sony games, but currently, they're targeting PC and 360. What is Microsoft doing in Korea to support them, or give them incentive to make games for Microsoft platforms?

DL: They need some tools to get Korean developers to make Xbox games, so they have a special person who is in charge of that kind of stuff. They have a third-party manager, so that they can give regard to the developers and help them. The online game market in Korea is huge, so there is a lot of convergence going on from online to Xbox. They are doing a lot.

Are you doing any funding of games that are created in Korea?

DL: We don't do the funding with money, but we support development of the software. We have our own R&D team, and when third-parties import those games, they support the localized version.

How much is done in localization? Do you do voice as well as text and the manual and all that?

DL: Our goal is to localize the games with 80 percent of text, or sometimes voice. But sometimes there are games that don't really need localization, like racing games and shooting games.

So those are usually in English language, right?

DL: English and sometimes Japanese.

Microsoft in the U.S. has internal game developers in the Xbox division, and in Japan, they have Microsoft Game Studios. Will there ever be similar internal development at Microsoft Korea?

DL: We don't have any development studios.

Yeah, but is there any plan to do anything like that in the future?

DL: There are a lot of start-up development companies here we'll support first. Still, I think there's a possibility if the market gets huge and gets bigger, because it's a very good environment for game development.


Some companies I've spoken with have said that Korean game developers now don't have enough experience making full, complete products. Is that something you can help with?

DL: Because we support development companies, developing for the Xbox in that environment is very similar to the PC game environment. We provide support, and I think they're already equipped with the skills to develop the games.

Pretty much everyone I've talked to so far does not feel that way. They feel like they need a lot more project management and quality control, and experience with making finished projects. Pretty much everyone said that they needed a lot more help to finish these projects.

DL: They say they don't have experience, but I think they have the ability to develop these games. It was a good investment in console games, where there hasn't been any big success. That's the problem. It's not a problem with them. By giving them good prospects of success by making the Xbox successful here, they can get that good environment they need for their success.

I can tell you my opinion of what could change some things. If Microsoft in Korea set up a division to assist these companies with creating end products... if you could assist them, and give them the idea that they could release that in the west, they would be much more likely to create a finished 360 project. Then if that game gets released here, more people would want to buy it. I think that's how it...

DL: We're planning that, but I think the market base is not really established yet. We're in the process of doing that first, with that kind of assistance.

So what are you doing to make the install base larger?

DL: I can't think of a basic answer, because the console games market is not really successful here. We want to establish the base first for the Xbox 360 by releasing games more fit for Korean gamers. The company itself will make an investment for that. We're trying to establish the fact that games can be played by anyone, not just by adults.

So more casual-oriented games?

DL: There a casual game coming developed by a Korean company, and an RPG game that Koreans really like, all developed by Koreans. There is an edutainment game as well.

Oh really? There's been no edutainment-type game in the U.S. so far for the 360. Is that going to be first in Korea?

DL: It's an English game.

Like teaching English?

DL: [In English] Yeah. My English is very small, so it's for me, in this case. (laughs)

How many games are in development right now for the Xbox 360 in Korea, that you know of?

DL: Six are in development. There will be more eventually.

Can you say which companies? I know some of them.

DL: Studio Nine is developing a game. Also Phantagram, from Kingdom Under Fire. Nexon's Mabinogi. I can't say more than that.

mabinogi_012.jpg

Do you think that Mabinogi is going to make a big difference in the market?

DL: Mabinogi was a really successful game in Korea, and I'm expecting getting users from online games, and it will give them new experience in video games.

Do you know if there is a plan to release it in the west?

DL: It's up to Nexon.

Are there some Live Arcade games being developed here as well?

DL: Some companies are thinking about it, but we're not exactly planning on it. Many people have interest in it, and have requested that.


When companies are coming to you to release a game on the 360, do they expect that it will do really well in Korea, or are they usually hoping that it's going to go over to other markets?

DL: They want success in both sides. In Phantagram's case, they suggested they may be more successful than that.

How many people are working in Microsoft Korea on the Xbox division?

DL: Xbox division? Ten.

So it's still very small. Do you think the company needs to grow in order to make the market grow, or the other way around?

DL: We keep hiring people.

Ah, okay. That's good. Why do you think a lot of people have been reluctant to move into the console space so far in Korea?

DL: Console game development is what Korean developers desire. Why they couldn't move into console game development is because there aren't that many companies doing that. And it's really hard to get a job overseas to do that, because of English.

So what are you doing to make them feel better about developing on console?

DL: I can't make my own company, but... (laughs) Instead, I'll make the Xbox a big success, to show that console games can be successful here.

It's easy to say, but hard to do!

DL: Sony should try too!

What's more successful in Korea right now? 360 or PS3?

DL: Xbox is doing much better. There is a huge gap in market sales.

When I talked to Blueside, they said that in the past, Kingdom Under Fire sold more than Halo. Do you think Kingdom Under Fire: Circle of Doom will sell more than Halo 3?

DL: Any game can get over Halo 3 if it's well-made. But Halo 3 is a really well-made game, so to sell more than that, they should try to make better games.

They're not sure if they can beat it this time, but they're trying! There are other companies out there that have made games for PlayStation platforms in the past, but have not done much more console development. Are you trying to get them to come to Microsoft's side, like T3 or Sonori, or other smaller companies like this?

DL: There is a company like that. The company who made Magna Carta.

Softmax?

DL: Yeah, Softmax. Officially, there is nothing else. But we're planning on talking.

So Softmax is discussing with you, or talking to people in general? Or they keep saying it?

DL: Softmax already did a 360 game, and other than that, there's nothing officially there. The next Magna Carta being made is for the 360. We're still discussing with other companies.

Gamasutra: Do you think that Korean 360 sales will be able to surpass Japanese 360 sales?

DL: The number of people will surpass it, I guess. It's already a success. The physical number of the sales is not impossible.

When do you think that might happen?

DL: You should talk to the PR manager first! (laughs)

Marketing and PR are very close!

DL: Talk to them first, then talk to me. I kind of mentioned it, about the other markets.

You know, if you say that Korea will beat Japan and Korean people hear it, they'll probably make that happen!

DL: Maybe! (laughs)


What do you think is next for the 360 in Korea, after the holiday season?

DL: Christmas is very important. With the holiday season, we'll focus first on our own marketing, and on all games developed by Korean and Japanese developers. We think this season can be a really important opportunity, and we can try to make a big market for us.

It seems like a good time to take advantage of your lead over PlayStation 3.

DL: Actually, the PlayStation marketing managers are envying us, because we have a lot of various content lined up.

That's true. In terms of what kind of marketing you're doing... well, what kind of marketing are you doing? Walking around [in Seoul], I see Nintendo DS advertisements everywhere, and commercials and stuff. What kind of initiatives are you putting forth?

DL: We're going to have TV commercials for specified cable TV channels. It has a specific target base. Nintendo's for kids and teenagers, and... we will be in a lot of communities that can play the Xbox.

I see. So will you set up kiosks in malls and things like that?

DL: Yes. We're already doing it, and we will increase the presence. Especially in winter.

Do you think that price is a factor in people not buying it? Have you considered any further price cuts?

DL: I don't think price is the main factor. Because it's the holiday season, there will be a lot of packages, so that will have the same effect as a price cut. Still, even if people think it's kind of expensive, it will persuade them by showing how fun it is, by experiencing the opportunities.

So it's like pack-in software and stuff like that?

DL: Yes.

Which games are you going to be putting in?

DL: There will be an Xbox 360 Arcade. It will include arcade games, and HDMI ports newly installed, and other stuff, so they can buy it at a cheap price.

So kind of the same as the Arcade console pack release in the U.S.?

DL: Yes.

Right. Is there anything else you want to say about the Xbox initiatives in Korea and what you're doing?

DL: In Korea, there are not that many console games, the type where the main game is too big, so we want to share how fun console games are, and how it can be successful for the holiday season.


T3: Yoo-Ra Kim, CMO and director

Can you talk about the company's history, first off?

Yoo-Ra Kim: T3 was established in 2000. As other companies did, we also started with a PC singing game. In 2002, we changed our business sector to online, because as you probably know, there are a lot of illegal copies in Korea. We couldn't make any profit from the game, so we decided to change our business sector. Then we made three or four types of different casual online games at the time.

In 2003, we faced financial difficulty, so we had to choose one of them. That was Audition. So we just focused on developing Audition, because it's not a blockbuster huge game, but we were sure that it has a unique point to appeal in the market, so we decided to keep going. Finally, we made it. Since we launched in 2004, Audition has more than 300 million registered accounts worldwide. Especially in China, where we have 800,000 concurrent users. Worldwide, there are more than one million concurrent users.

05142_asd.jpg

So China is the biggest market?

YK: Yes.

Why do you think that is?

YK: I don't know exactly. People said it was Korea's actors, actresses, movie, [TV] drama, [became] popular, and in China, exactly the same things happened. Audition has fashion and dress, and music, and dancing -- current, up-to-date dancing. These three types of things, plus community things.

We created a lot of gamers not from another game, but non-gamers. As you know, the game market is dominated by male users -- like 90 or 80 percent. But in Audition's case, it showed fifty-fifty. So we created a lot of female users from this market. That's one of our big issues when we do Audition research. It is true that in many of the countries we've launched so far, it's so successful, especially when we put the marketing with a media company, like a broadcasting company, and a lot of media [types]. Radio stations, TV channels -- things like that. Then the power became really huge.

A funny story in Vietnam is a report that's known as Small China. Now, Audition is the number one casual game in Vietnam. Our partner, VTC, never operated an online game before. Audition was their first time. But they had five TV channels. So they're the only one and the very first [game that] appeared on a TV show in Vietnam for the first time. Also they did some kind of music audition competition, so a lot of their users pick very cute and beautiful users on TV. The audience is there, and it was on TV nationwide, so it became an annual festival. This year, also, they did this audition in Ho Chi Minh city.

That's impressive. How did you decide to choose that partner? Obviously it worked out really well, but it's surprising if they've never operated a game before.

YK: The first thing is that when we were so small in Korea, we couldn't find any proper partner in Korea at the time, in 2004. What I decided was, "Okay, let's do some TV shows." So we met some game TV people, and I suggested, "Why don't you guys make a TV show with Audition?" So far, game TV was shooting or killing monsters, or fighting, or racing, or sports, or something like that, but never had there been a dancing game on TV. Once it appeared, people would just see what it is. People got a lot of curiousity, and since we started a TV show in Korea, our concurrent users became double. When we did three months, it became thousands, thousands, thousands. So I thought it's kind of a mixture of media [beyond games]. Not just simple games -- game business.

So now, we have a regular TV show, where we invite celebrities on TV, so they're talking about gossip things and their current views and they are bringing their new album, if they are singers. So they just introduce, and with Audition users, they play the game, on TV. So it gives another [way of having] fun, you know? Because certain singers have a lot of fans. That's how we created the market in domestic and overseas, and so far, that's why I think Audition became one unique specific genre in the market.

Now Audition is on PSP.

YK: And arcade machines.

Yeah, and arcade. So you've got it in multiple game media right now. Why did you decide to do that?

YK: We wanted to show in the market that we're not only just using the online game section, but also if something is happening in the market, we just want to make a variety of business. So the PSP was kind of challenging. We didn't expect a profit from the title's release -- just 10,000, or something like that. It's not that much. But it was a very good try for us, and once the company made certain general games, people just say, "Oh, how long is this game's lifecycle?" or something. But if the lifecycle is going to be longer and longer, then we need to do something, not only online as it is, but in many different related sectors. That's why we decided to make Audition musical, and Audition arcade machines, and Audition for PSP, and later, we could make Audition for the PlayStation 3 or Xbox or something like that.

Do you have any plans for any of that yet?

YK: If the Xbox people suggested us a very good condition, then we'd love to. That's one of our goals to achieve -- not just the online section, but we want to broaden our brand.


Did you also make the PSP version in order to gain some experience making a full, shelf release product?

YK: Regarding PC games, we already have a lot of experience making finished products in the market.

Well, you made the offline PC game, right?

YK: We started with that, but compared with the online business sector, it's too small. And these days with USB, people can do everything. They can put movies and games and everything inside. If that is 4 gigabytes or something, you can do whatever.

So I guess that's not the answer, but indeed, it seems like... well, there's no quality control or specific console parameters you have to deal with in PC, so that was what I was wondering. But the answer seems to be no.

YK: For now, the European market is dominated by the console game market still. Now, we have a London office, and are operating Audition there alone. We're struggling. Two weeks ago, I had an interview with the BBC, and they're asking, "What is an online game?" or something. And I answered, "These blahblahblah things." One thing difficult for us also is to educate them about what is the real enjoyment of an online game. It's really tough, because unless government policy supports the broadband system as a private company, it's really difficult to achieve this kind of goal.

The reason we became popular here is because the base structure was so good. When you download a certain game's client, it just takes five minutes or something. When you try in the UK, it's four hours or something like that. People get noisy, and they just give up. What I've done while I was in the UK was meeting online PC game and console game distributors in the UK. What they are doing was... he's an ex-Infogrames director, and that's why he has very good knowledge about both online and offline marketing. He agreed that Audition has really good potential, so somehow we'll do some free download from their sites. Then we will make Audition packaging that looks like a DVD case, which will have the client and some special item like clothes, and some special present inside. We'll make it very fancy, so it looks like a console game, but as it is, it's online. We test all things like that for the local market, but we can distribute them, so we can create UK users easily, because they don't need to download from the website.

Is the arcade business in Korea still good enough that you can make a profit off of that?

YK: As far as I know, the arcade market size became really small, compared to years ago. But what we believe is that Audition is something different. It's not gambling, it just [relieves your stress] when you play the game. People have some kind of reminiscence about the DDR thing. It happened five years ago. What they did was they didn't do any update. What we can do is we can do regular updates on the song side, dancing side, and the featuring and outfits. One more good thing is that Audition is now worldwide. We have millions of users. So yesterday and today, I already got some orders from our partner company, and some in Indonesia and in India, and Japan.

For the arcade version?

YK: Yes, arcade versions.

So the arcade machine will be networked?

YK: Now, you play with NPCs, or you can compete with one person versus one person -- two-person multiplayer. But we put a computer inside, so what we can do later is also do some network play. But the arcade is offline, so it's kind of a different fun. You don't play an hour or two hours on the arcade machines -- just five or ten minutes. You just have some fun, and that's it. What we can do is we have scratch cards, so when you have a point, you can use the point in your online site. It's that sort of consolidation.

When you said you could update frequently, can you update remotely, or do you have to install it?

YK: Of course, we need to put some guys in there -- engineers. But it's very simple work with CDs or USB. We can simply do that, like what we did with online updates. It's exactly the same.


What is your perception of the console market in Korea right now?

YK: Console? The Sony people and Microsoft people are thinking about, "What is this Korean market?" because they were so successful in the European market, [as well as] the U.S. But in Asia and Korea, not that much. What I'm thinking is that somehow, we need some sort of connection between console and online. Online's fun element is never ending. It's long-lasting. But on console, when you buy certain packaging, if you have one week's enjoyment, that's it. People feel, "Oh, that's enough."

But for online games, even if you play one week or two weeks and then if you feel, "Oh, I'm sick of this," you just quit. So for us, the homework is how we make them never bored. That's our issue. If we somehow make a cool product with consoles, then if they want console fun -- very simple fun -- then we just give it to the console side. But if they want some communication, we put that element into the online side. Both sides, if they can co-work, like in the engine side, then I think the market will be really huge. Otherwise, I think console in Korea will be really tough.

Microsoft does have their Games for Windows Live, so people can play on their PC against people on the 360. It seems like that might be the kind of thing that could...

YK: The one difficult thing for the console market is that people need to buy hardware, which is very expensive. If we could put that function in a screen, in an Internet cafe or a house or wherever, people would see the screen and then [just play.] Boxing, you and I, we can do it. I was really enjoying Nintendo's [Wii] boxing game currently. I said, "Oh my God, if we can make this online in an Internet cafe, it would be really good for us!" Or golf, or whatever they can do. That's maybe the next level of game.

In the current timeframe, do you have any interest in making games for the Wii or stuff like that?

YK: The Nintendo Wii? We are very flexible, so unless they suggest too tough of conditions, we'd really love to do it. Some of our titles really fit for the Nintendo Wii. They really fit. Luckily, yesterday, I met a Nintendo guy from here. He was interested in one of our titles, and next year, we're going to have a meeting. Soon, I can show you another Nintendo version!

audition07042401a_1177387222.jpg It seems like with the success of Audition Online, other companies are trying to create online rhythm games.

YK: Yes, like dancing games.

Do you think the market is going to get more crowded because of your success?

YK: There are already five or six dancing games in the market. On one side, we're very happy, because the market size became very big, and also they believe, "Oh, we can also create another market for dancing or the rhythm game genre."

Another thing is I think they just try too simple of an idea. Audition is already three years old. For the last three years, we've experienced a lot of ups and downs, which means that with Audition, we've put many, many things in it. If they don't make comparative quality to Audition, they will fail, easily. That's my concern.

Also, once in the market, one very huge dancing game is coming out, then our inside team might be nervous, and they will show more passion for the Audition project. My hope is that in the market the dancing genre will become bigger and bigger, because dancing and singing -- these kinds of action are universal activities which never get boring. If we just keep changing the type of music and dancing and those sorts of things, then people will enjoy this game forever.

It seems a lot of people are not really trying to develop their own original ideas.

YK: Yeah. They're copying.

Yeah, there's a lot of that happening.

YK: If I see Audition now, three years before, Audition was totally different. If I see three years before the [current] game... "Oh, it sucks!" or something. It's too simple, or something. But now, we have many types of game modes. We have sports dance, salsa, hip-hop, disco, a lot of '70s and '80s dancing... many types.

If you know, what is the most popular form of dancing on Audition?

YK: Choreography. They want to be backup dancers, or a team. The second one is freestyle. That is, they can create choreography as they want. The choreography mode is... we already put the system in, so once they press certain buttons, everybody does the same dancing. But in freestyle, if I'm a master, I can give you all kinds of recipes. "So you guys, let's do this in order," and they play their own choreography. One good thing about Audition is that once you've played a game, you can record it, so you can see your replay. They're just, "Oh my God, I did it!" or some kind of achievement.


Can you talk about the other projects you have going right now?

YK: Milman 2 is on the booth there. That's actually our first online game. But the sad story was that even though we developed it before Audition, at that time, our programmers' quality was not that good. Their game design was very unique, funny, and simple, but technically, it needed support. So as I said, we had several titles to develop, and we had to choose one. At the time, we decided to give up Milman. Last year, we started to develop the game with a very good team, and now we are ready to release it. The reaction of users is quite good now.

So since you got enough money from Audition, you're able to do the other games you wanted to do?

YK: Yeah. You know what? While we were developing Audition, we also had many different types of game scenarios, but at the time we didn't have money. Now we have cash, so now it's like, "Let's do it!" (laughs)

Is T3 still independent, or has someone tried to purchase you yet?

YK: No. We're independent.

Are you going to stay that way?

YK: It might be changing. We might be going public.

That's different from getting bought. That's probably better, actually.

YK: Maybe in the U.S., hopefully. I need to say "no comment" about that. That's my duty.

Aside from things you can't talk about, what is next for T3?

YK: We have ten more pipelines.

Ten? Wow.

YK: We have 370 developers now.

That's quite impressive. So ten separate teams?

YK: Yes. We have 80 members in Shanghai. They're all in graphic design.

Is everyone else in Korea? All the rest of the developers?

YK: Yes. And two are in London! (laughs) So they are making ten different types of games. It's all very different -- a very new genre of FPS, and a new genre of strategy, and role-playing, and some simple and mixed ones. Sports, as well.

It sounds like you're taking some risks now.

YK: Yes, because I'm not God, so I'm not sure which one will be a hit. For Audition, I also didn't expect this much success. So who knows? We're preparing for the future. I think each game has unique points, so each team will be competing with each other. We'll see who will be the winner.

It seems like a good idea to try and do a lot of different ideas at the same time. Then you can actually experiment and see what works. Not a lot of people seem to want to try to do different things right now.

YK: Yes, [doing too many] different things [is] too tough. So slightly different and slightly unique... people can feel sort of cozy with it. If it's too different, they don't even try, because it's too tough to learn.

It's good that you're doing that, because when most companies become big, they become like, "Okay, now we have to be really safe. We have to make sure each game is a hit every time."

YK: It's not possible.

Yeah. It's a bad way to do business, I think, because you're just making your market smaller and smaller that way.

YK: Yeah. We saw some of our seniors who did big successes, but later on, now they are struggling. We won't make that kind of mistake again.

Yeah. I've seen a lot of that, especially in this market. It's happened many times.

YK: And also many people are young. The good thing about our company is that our senior has a big dream. He's not only a game graphic designer or programmer, he's kind of management side. So he's drawing a big forest, not just a tree. That's a good thing for our company's future, I think.


Com2Us: Ji Young Park, president

Can you give a bit of your company's background and history?

Ji Young Park: The company was founded in 1998. At first, we were not a mobile game company, but we started developing mobile games since '99. We were the first company who started to service mobile games in Korea. Certainly at the time, it's a really early stage. Few Japanese and Korean companies try to service mobile games. We were one of the first companies to develop Java games for the phone, and the game was showed when Sun Microsystems introduced the Java system.

We now license mobile games in Korea, and we also are servicing our games through our global network over employee carriers. Also our game library is almost over 80 titles, over eight years. We're now focusing on making the handset to a real game platform, so we make the creative titles designed for handsets. Even though users download mobile games, they can play over three hours. If they want to keep those games on the handset for whenever they want to play it, they can play it. Last year, we launched a mobile MMORPG. Many people log on through the mobile and play with each other.

minigamepack20060412021849157.jpg Is that only in Korea right now?

JP: Right now, it's only in Korea. Over 10,000 people are playing this game, and we're upgrading. When they log into the game, they check on the current version, and if there is an upgrade, then they push down the upgrade files on the handsets. Those kinds of mechanisms...

Don Lim, general manager: Such as adding more maps. It's a regular MMORPG based on a mobile.

JP: They make guilds in the game, and then groups play together. Also, Mini Game Pack was our number one downloaded titles. Mini Game Pack 1 and 2 combined generated five million downloads in Korea. Five million downloads is like megahit film sales. Now we're persuading the market that mobile games can be a hit content, and the messenger can be a content conveyor to the users.

What did you do before? You founded the company. What did you do before that?

JP: Before that, at first, in '99, we were a private company. At the time, we were just university students. We wanted to [release an] MP3 player at the time. It was just an idea, so to make that real, we needed money. We started to find out how we can make money, so from that time...

So you wanted to create one?

JP: Yeah, create. At that time, there were no [players]. At that time, it was really only staged for the Internet. There was no business in mobile in the internet. So we started a BBS, and we started to service content. We shared the information about computer hardware, and when they see the contents, then we charge them. Also, we started service through hardware and video game information services.

After that, we found out that the information service is really hard to earn money, so we knew that there would be a new Internet system for the handset. At the time, PC Internet was all free, but with handsets, people recognized that it was not free. I think we can try something through handsets... if the Internet in handsets becomes popular, people will potentially like the games. That's why we started mobile games.

How large was the company when you started at that scale?

JP: Only three people, started with a donation of $5,000. I lent them money from my father.

So who designed the first games?

JP: We really kept together and had an idea about which kind of game can be possible. At the time, the platform was just a web browser, so it was like a character raiser like Tamagotchi, or fortunetelling. The first RPG on the WAP platform we launched in 2000. At first, it was fortunetelling, but in a year, we launched an RPG.


This is kind of an obvious question, but how do you find the Korean and U.S. markets to be different, in terms of mobile stuff?

JP: When Verizon first launched mobile titles, we launched about four or five games. At that time, they were really basic titles, like bowling and baseball. As time goes by, many web publishers had to do the business and they had licensed the titles. I feel that the gameplay itself is not different. I feel that our game title, in gameplay itself, was really exciting. I'm very confident in the content. With our brand, it's really hard to persuade the carrier. It's a big barrier. US players try to buy brands and combine brands and games... It's kind of hard to persuade the carriers.

Yeah. The other problem that happens with that is that when people are buying the licensed titles, they're usually not very good, and then they think that all cell phone games are like that.

JP: Everybody has limited resources. We put orders on developing titles. That means that we put 12 months with a full team developing and testing and leveling and separate things. But with a branded title, capital for development would go to acquiring the license, whereas we focus on development itself and making quality games. Developers should reduce the development costs to get the brand. It's really tough to make a better game.

Some of your games seem to have a very Korean art style. Do you think that is a plus or a minus in the U.S. market right now?

JP: In the mobile platform, it can be a minus, because there is a gateway to persuade a person. It's really up to the person who chooses the game in that market. If he likes that style, then it will be great. If he doesn't like the style, then it is really tough. In Korea, carriers don't decide it. Carriers have usergroups to play the games. They rely on the gameplay and the usergroups. We think it's really good for us in the Korean market, but in the U.S., usergroups are not that popular. We should get to do the research later, whether this game is good for you or not. Then we need to decide to upgrade or not.

DL: In Korea, each carrier has their own usergroup. They change the user every time, in every genre. So each usergroup gives feedback, and a score, and then for each game, the carrier gets a score and feedback. It's more open and clear.

JP: On the development side, it's beneficial, because we can reduce the size of the graphics and put more on the gameplay. In mobile games, the size of the game file is very limited, so we put more real-style art on the mobile games. That will take over half the size of the game for us. But if we simplify the graphics, that will only take under 30 percent of the whole file, so we can put in more stages or make more playtime, or put the scenario of the games. With that, we can do more.

It seems like a much better way to do things, but it seems like it's really hard to push over here, because it's all very carrier-driven, rather than being a publisher or developer-centric market. It's very unfortunate. I hope it'll change, because if it doesn't change, mobile games aren't going to get any better.

DL: My philosophy of the mobile game is to increase the game experience, and the playing of the games. At your first impression, you're like, "It's okay," but as you play, you become more addicted, and you start to like it. But for some publishers in the U.S., their first impression of the sound and the graphics is so powerful, and people have a very high expectation for these games. As she said, the game itself is just a very generic game, or a simple game, and the gameplay time is so short that you can't play for more than ten minutes.

A lot of them seem to focus their attention on the intro screen and the music at the very beginning.

DL: The attract mode.

Yes, that's right. It's totally that, except it's unnecessary, because you can't actually see it from the menu. This is a total market question, but why do you think that Korean companies have excelled so much in mobile and online games more than consoles?

JP: For consoles in Korea, people need to buy before they experience. That means that people should buy additional console platforms, and should buy titles at first before they experience something. Those console titles were [pirated] a lot on the market, and the market itself had a very hard time. Same with the PC game market.

The offline PC market.

JP: Yeah, right. So all the game developers moved to the Internet platform. That means that people can download games for free, and after they spend some time with it and they like it, they decide to spend money. It can happen because we have a really good infrastructure, Internet-wise, where mobile-wise we had a really rich network and rich computer system. It's a power source in everyone's house, and there are Internet PC cafes. Almost all of the gamers are very good at games, because there are a lot of games that can be played without paying any money. If they like it, they can pay. We need really good games which can persuade them to pay money, so they make us really concentrate. But after we persuade the user, it's really a full market.

That makes sense. Do you think that something like Xbox Live Arcade could do better in Korea than previous consoles, just based on what you said? After you buy the console, you can download demos of smaller Arcade titles as well as big titles. Do you think that could do better there?

JP: There are still lots of people who love console boxes. With those people, it really makes the market. But people who already enjoy online games already have good PCs in their house, and pay to have network. In Korea, the PC or mobile platform will be the better platform for games, for the time being.


I don't know if you can answer this question, but in terms of development cost versus number of purchases, what does it take for a mobile game to be considered a success for you?

JP: How many downloads?

Yeah. In terms of getting back your development cost, and being more profitable on top of that. What does it take for a title to be considered successful? Does it have to be 100,000, or 50,000?

JP: Nowadays, our game development cost is going higher and higher, in fact. Now people will only pick what they want to buy. Over half of people buy games because of other peoples' recommendations, so they are really focused on buying games. We need to do more on the culture side, and giving them new experiences. They make us spend a higher cost to develop. Right now, we put that 300,000 downloads -- that means about $600,000 -- then we put this game as successful in a year. But even after a year, if we see it's a good game, it keeps selling. So in a year, if a game makes over 300,000 downloads, then we think it's successful.

That makes sense. In terms of getting word of mouth, or people saying which games they like, have you looked at Nokia's N-Gage platform at all? What do you think about that? It's got user reviews and stuff.

JP: On their website?

No, actually on their handset. They have a front end where you can see the games and look at user reviews, where people say, "Yeah, I really liked this game, and here's why." And also it's got Achievements inside the games. I was just wondering what you thought about it, if you've seen it.

JP: I haven't seen that yet, but I feel that making word-of-mouth... if it's only possible in some handsets, it's really hard to make word-of-mouth. They can make an N-Gage community, but I'd like to talk about the game with my friend sitting beside me. So it's really important for mobile games. I know that discussing with my friend or people in my class, discussing about the game itself make word-of-mouth. So Nokia should sell more.

We talked about this a little bit, but do you think developers or publishers will ever be leading the market in the U.S. the way they are in Korea, Japan, or even Europe? Even in Europe, you see ads on TV for mobile games. Here, you never see that. It's easier to find out how to get that game. You can text to something, and get the game. But the carriers have a lot more control over everything, and you have to go through them in many situations. Do you think that will change here? Do you have any idea?

JP: I'd like to ask you about it! But now it's growing in the U.S. It's really an appealing platform. Now everyone has handsets, and everyone can connect to the Internet and download games, even though right now they can't find what they want to download. But it's really easy to download. It's really a cool platform. As it is, it will grow, but at some point, it will stop growing. Then, people in the market will find out the ways. They need to enhance the infrastructure, or they need to find out more creative content. People always prepare for the hard times, but the market will change, I believe, sometime. I saw that the U.S. market has really good potential, and if people believe that is the new way, they will go. I believe in some points about the U.S. market. They have a high possibility and potential to decide something and then go with it. I believe that it will go the right way.

I hope so. In terms of ease of download, it seems like Japan is the easiest. I don't know if you have this in Korea, but there and the UK, they have barcodes, and you can take a photo of it. Does that happen in Korea as well?

JP: In Korea, it's a different way. We have a link system. It's numbering. So if we put 777 and then press the Internet key, then it will go to the website of our service. It's like a picture, but we chose to put the number in. It's like a URL. 777 is our site. We only need to advertise our number, "Come to join by pressing 777."

I see. That seems good in some ways, and then in other ways... one thing that I saw that I thought was kind of amazing was that I saw a magazine of mobile games. It had reviews of the mobile games you can look through, and it has a barcode at the end of each one. It's like, "Oh, that looks good. Take!" It's so easy. If something like that happened here, I think people would play games.

JP: Yeah, in every ad, at the end of it, we put, "777, and then download this game."


Something I meant to mention earlier about the Korean art style is that sometimes it seems like it is...we still have this anime and manga culture that's growing up over here. It seems like for those people, it could be appealing. I think that's one of the big reasons that MapleStory is doing well. It has that distinctive, cute, and fun art style, but it's a super-Korean art style. You would never think it was anything but Korean.

DL: They spend a lot of money on advertising. As far as the Korean MMOs go, they've probably spent more money on advertising than anyone, like maybe all the others combined.

But it's also the only one I would ever even consider trying, since it's side-scrolling and casual, and I don't like playing games on my PC. So 3D stuff where it's got like deep stats and stuff, I don't want to touch it, even though you could consider me a hardcore gamer type. It's not for me. It's possible that it could be a draw for some people. It just depends on the market.

DL: I read in Wired that manga has taken over America.

I know. Well, that article is several years late.

JP: We are focusing on easy play, but after you play, you can play whenever you want to play. For a mobile game, its playtime is very short. So while waiting for someone for about three minutes, I can play this game and when my friend comes, I shut down. And then another time, my gameplay is still stored on the phone. Those kind of mobile lifestyles we researched, and then we put that kind of function on the handset games. We can make our mobile game unique, and people think it's really easy to play.

Do you have to put that functionality for each handset in each game? All the handsets obviously have different capabilities -- like, you can close it by flipping it closed, or you can slide it closed, or maybe you have to press "end." Do you have to make sure that's the same?

JP: We record the [ending] point, and we automatically record the progress. Some games make the game itself very short in playtime.

Do you have any interest in handheld console platforms like the DS or PSP?

JP: Yeah. We are interested in them. But before entering the market, we need to do some projects. Each platform has a difference, so we think we need some experience. We will try something, and then for serious after that we enter seriously. It will be in two years.

It seems like it's kind of difficult to get into in different markets. It's good not to rush into it. But right now, I think there are maybe only three Korean companies doing their own titles. Not all of them are developing themselves, but with their own IP. There's MapleStory, Ragnarok, and...

JP: Pangya.

pangya21.jpg

Korea's popular online casual golf sim, Pangya.

Pangya is on the Wii. [Note: Pangya is known as Super Swing Golf in the North American market.]

JP: Yeah, I saw. It's developed in Japan.

DL: That comes through Tecmo.

And then there's the one doing the touch dictionary.

JP: Oh, touch dictionary?

They titled it very unfortunately. They abbreviated dictionary as "Touch Dic." It's really funny. But there are only a few companies doing that. It would be interesting to see how it goes. More Korean companies actually seem interested in Sony platforms like the PSP, like Pentavision.

JP: Yeah, because we feel that Nintendo has a more closed environment for developers. That's why.

Although they're trying to change that a lot now. This may change over time. We'll see. About the console games -- what do you think it will take for consoles to be important in the Korean market?

JP: I think that the major Korean developers start to release titles, at least. The timing will be important, because now there are many Korean publishers, and they announced that they will develop console titles, but none were really released, besides MapleStory and Pangya. But I heard that it was also developed in Japan.

So, the big publishers getting on is what you think it'll take? The thing is, the large Korean companies have not been making offline games very much anymore, and consoles are starting to be online, but it's mostly offline titles. So you've only got companies like Phantagram and just a few companies doing those sorts of titles. It's a strange kind of thing where it seems like no one wants to take the first step, and nobody wants to fail.

JP: Phantagram was merged with NCSoft, but again they divided. So maybe the culture of online games and offline companies might be really different as it is, but soon they should find out to grow more, a Nexon or NCSoft kind of company should go from online to offline, and offline companies like EA or U.S. companies should grow to online and mobile. It's really the same mission, to see who can do well and be successful in the next eras. I think it will be the mission of the companies, so we'll see who can do well.

It's going to be interesting to see that.

DL: The big offline hurdles for MMOs and making them connected here is that your basic U.S. living room is not set up with an online connection. You may have it as a cable box, and you may have it as a satellite dish, but your basic family doesn't consider the TV something to play against other people online.

It's kind of funny, because I live in one room. I have my computer right here, and my TV right here. But still, I don't hook up my console. I have to go out and buy some stuff. Like I have to buy a wireless adapter, or a cable. Actually, even for my 360, I would have to buy a different router so that I can actually get another ethernet cable to plug into it.

DL: For the computer, they say, "We have to have the Internet for homework and business." Nobody buys a computer without hooking up to the Internet, but consoles are considered game machines.

JP: About the Nokia, I heard that their N-Gage platform is going to a general platform for all Nokia handsets, right?

Right now they've only announced six, but eventually it may be supported on more.

JP: We believe that the platform of Korea or Japan will eventually be at the same level. It will be the next model of platform, I think, of European or U.S. handsets -- a type of game platform. So we want to try to do something for the Nokia, because it will eventually be the same. I think we want to do that.

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