[In this editorial, Game Developer magazine EIC Brandon Sheffield discusses the fascinating South Korean game market, explaining why a visit to Seoul's Gstar game expo opened his eyes to a vibrant and different market - from IP ownership to microtransaction dominance.]
Some time ago, I went to South Korea to attend the GStar expo, and met no fewer than 13 different Korean game developers, either at the show or in their offices - and I had the very distinct impression that I'd just been schooled.
It's easy to feel like you know what's going on in the world. I've been following the Korean market since 1999, when I picked up my first Game Infinity (representing Korean game companies as a whole) brochure at E3.
I've long had faith in the region's entertainment industry, and time has proven me right in that regard - but actually going there, meeting the developers, visiting the studios, and feeling the vibe, there turned out to be a whole lot I just didn't know.
The first developer I visited was Blueside, the biggest console developer in Korea, with titles like Kingdom Under Fire
and Ninety-Nine Nights
under its belt. Shockingly to me, the office is incredibly small, with over 100 people crammed into a small space that was clearly a normal paper-shuffling office before they occupied it.
Developers there commented to me how difficult it was to get competent coders and designers, since everyone wanted to go off and work on the MMOs. It's hard to imagine the largest console developer in America being in that position.
The next place I visited was Gamevil, a mobile developer, maybe the second or third largest in the country. That company too had just over 100 people, but their space was easily twice as large, in a building in a much swankier part of town, with gorgeous company-green walls and frosted glass partitions for the big bosses' offices. The difference in vibe (and revenue) was palpable. Gamevil, for its part, doesn't feel it's the right time to get into the console space.
Next there was Gravity, a middle-tier player in the online space, which had early success with Ragnarok
- success that hasn't yet been repeated, as Ragnarok
lumbers on with higher rates of use than its sequel.
Gravity for its part occupied five floors of the Meritz Tower in the Gangam part of Seoul - one of the nicest areas around. 380 people are spread across those floors, with plenty of space for all. The difference in scale was just staggering, and almost seemed inverse to the situation in the West, where console still rules.
We all know about microtransactions, of course. But what surprised me is that Korean developers get much larger revenue shares than we do on this side of the pond. Gamevil gets 85 percent of the profits revenue from their games, while the carrier gets only 15 percent. For games that need servers (like mobile MMOs), it's more like 60/40.
Then there was N-Log soft, developer of B.O.U.T.
, which Acclaim brought to Western markets quite recently. N-Log is relatively small for an online developer, with (again) around 100 people, so I asked if it was difficult to keep their IP since they always partnered with publishers.
They looked at me like I was crazy. "You mean developers in the West don't keep their IP? It seems like you would really want to." It was tough to talk after that, what with my jaw permanently affixed to the floor.
Different Skill Sets
Korean companies are looking to expand into the West, so naturally they're toying with the idea of entering the console market. Trouble is, the industry grew up so fast around online games, which are never finished, that very few companies know how to make finalized, complete boxed products.
Blueside and Softmax (Magna Carta) are the only companies that have really done it in the current era, and I didn't realize what a large problem it was until I interviewed, well, everyone. The consensus was; "If we move into the console space, somebody has to help us figure out how to make a complete product out of our property." Their pipelines aren't even set up for it, given the different nature of the online space.
In terms of those who have done it, Blueside had help from Microsoft, and has hired a foreign graphics engine coder. Softmax had help from Bandai. Nexon, I learned, is getting help from Nintendo for its Maple Story
DS port. Ntreev's Pangya
for Wii was handled by Tecmo. Gravity is looking for partners.
It's basically ubiquitous - no matter how creative and lucrative these companies are, they grew in a very different direction, and while they're ahead of us in network infrastructure, they're behind in other ways.
Gold farming and real money transactions are a fact of MMO player demographics, there's no denying it. But I didn't realize just how many players actually consider item sales their "jobs."
It was Blueside who first introduced the idea to me, cynically stating that consoles won't succeed in Korea until players start just playing games for fun, instead of treating them as work. I laughed then, but subsequent meetings only served to confirm the theory.
Companies from Gravity to Ntreev to Nexon agreed that a very large number - varying from 30 to 50 percent, depending on who you ask - of players in South Korea are playing games as a job. Generally, people didn't feel too good about it either, which at least indicates that people aren't designing them with that as a goal. But it's still disconcerting.
South Korea's got Seoul
The fact is, Western developers have ignored, discounted, or simply not known about the South Korean market for far too long, and now we're face to face with reality. Aside from World of Warcraft
, they've taken a genre we invented, and perfected it to the point where an online dance game like T3 Entertainment's Audition
has tens of millions of subscribers worldwide.
That's rather a lot of people, and we're ignoring it. When I first noticed that company in 2002, they were making a game called Raphael
that was so rudimentary as to almost be freeware.
I know it gets tired, and people tend to scoff at the changed brought on by microtransactions and smaller web-oriented MMOs. But the industry has come a long way. It's time to start paying attention to what we can teach each other.