How The Korean Video Game Industry Has Changed

PC games like MapleStory and Ragnarok Online became international hits that established the South Korean video game industry over a decade ago. To keep costs low, South Korean developers came up with the concept of microtransactions, which are standard now but the idea of selling virtual goods was uncharted territory when Nexon experimented with the idea. While some developers dabbled with console games like Crimson Gem Saga which Atlus localized for North America and the quirky PS2 game Muta Juice, for the most part game developers in South Korea focused on online PC games.

Recently, the market has changed with Gamevil rising and more developers even giants like Nexon turning their attention to mobile. NHN Entertainment, a subsidiary of the goliath Naver Corporation, publishes the MMORPG Tera in South Korea and is expanding in the mobile game market with their Toast brand. They also have their eyes on the West and opened NHN Entertainment USA. In this interview, Siliconera spoke with staff from NHN about the evolution of the games industry in South Korea and what makes a game successful in the region.

How has the video game market in Korea changed over the past decade? What was the biggest change in the market and what do you foresee will have the biggest impact in the future?

Online PC games dominated last decade in Korea. However, last year was all about mobile games. The market grew fast with a successful business model that integrated mobile games with Kakao Talk, the #1 messaging service in Korea.

Actually, the speed of growth was so fast that people already say that the market is being saturated. Thus many companies including NHN Entertainment USA are focusing on delivering games to global market. You will see many Korean mobile games trying to penetrate western market in the third quarter of 2014, and its result will have great impact on Korean game businesses.

Guardian Stone, one of NHN Entertainment’s games scheduled for release in the USA in the near future. 

What are the key factors that make a game successful in Korea?

The game should be fun to play. That’s always the key in the game business. Apart from that, what makes Korean gamers unique is that players are really competitive. Any genre (RPG, Sports, Runner or Simulation) that doesn’t satisfy the players’ need of a competitive gaming experience cannot guarantee its success.

And what factors make a Korean developed game successful in the West?

I think that many Korean development studios have strengths in their graphic quality and seamless network play. As high speed mobile network service (4G LTE) in the Western Market becomes more widespread, the better chances Korean games will have in the West.

Wooparoo Mountain was localized in English. 

What are the biggest barriers for getting players getting a player to download a game in Korea? Is finding new players different in the West?

It’s pretty much the same as Western market. It costs a lot to acquire new players. Costs per install, cross-marketing, and pre-launch marketing are typically what we rely on.

What monetization strategies work for Korea and how does this compare to the US? From some of the local Korean games I’ve played, it feels like monetization is more aggressive in South Korea than it is here.

It’s been 15 years since Korean gaming companies adopted and developed a freemium monetization strategy. At the beginning, it wasn’t easy for us to monetize players who were not used to it. It took some time for freemium model to settle down in Korean market, and now players are more open to relatively ‘aggressive’ monetization.

Due to the different trends between the Korean and Western markets, some Western gamers may feel that the Korean model is more aggressive. Some Korean gaming companies do understand the differences, and try to adopt the western players’ expectation for their monetization model.

Is NHN USA able to make unique events to go with the local market and events in the US?

From the beginning, we tried to build an American company. Most people who work in NHN Entertainment USA are American. I believe we can provide services that the US players want to have.

Undead Slayer is also available in the West. 

Games like Undead Slayer fit the West well while GoStop games are for Korea. But, how does NHN Entertainment decide which games to release outside of Korea? Could you explain the decision making process and is it different for China or other Asian regions compared to North America?

There’s an internal decision making process that both Headquarters in Korea and NHN Entertainment USA both participate in to decide each game’s main target market. Basically, the evaluation from NHN Entertainment USA has big influence on whether or not to deliver a certain game to the western market.