[Column] General: Two Koreans Grow, One Shrinks

SBFord

It's been a mercurial year in the gaming industry with layoffs and closures and mergers. In today's Free Zone, we take a look at three Korean companies as illustrative of the issue. Check it out before leaving your thoughts in the comments.

While I'm like most others in regarding Nexon as Korean, there's a technicality. It's actually headquartered in Japan. Among other things, this means its financial reports are denominated in yen. A couple of weeks ago, the company released numbers for both the last quarter of 2012 and the entire year. As usual, some of them piqued my interest. 

Read more of Richard Aihoshi's The Free Zone: Two Koreans Grow, One Shrinks.

Alot

Richard, the full article doesn't want to load for me. It's the only article I've encountered so far that acts like this.

Edit: It works now.

adam_nox

I think it's a punchline.

Talmien

I think the fact that our Market is only 3.6% if a very important number. It can really make you stop and think about why MMOs are headed in the direction they are.

 

I don't think its any big secret that most of us here on MMORPG feel MMOs are declining, but it may just be because the wants of our small market are different from the wants of Japan and Korea.

Superman0X

The Asian (and soon Russian) markets are so big that they dominate the global economy (for gaming). With the increased internationalization of gaming due to the internet... it is not unexpected to see the Western Markets become the secondary markets... even to the companys that operate here (Activision/Blizzard, EA, etc). It is becoming more evident that developers have to hit the major markets (Asia/Russia) else they will be pushed out of the global market, or just bought out by one of the companies that do hit the bigger markets.

 

There will be a lot more consolidation in the next few years.. with the Asian publishers just buying up the smaller developers, to re-tool them for the Asian markets. The good news is that this should generate a lot more indies, who can survive in the (smaller) western markets, until they are bought out also.

Battlerock

Im not a big fan of GW2 and they aren't big fans of apple pie. Doesn't mean they have to eat it.

Calerxes

EA Activison merger its the only way to compete for the west now, all their respective "fans" on here are going to love that, let the rejoicing comence  the futures bright for us video game lovers. 

moosecatlol

Guess who the largest shareholder for NCsoft is. Fun fact it's the behemoth of the article, and one of the worst things to have happened to the industry.

Ehllfhire

A 3.6% share of the market screams problems for western markets. It means the mmo devs will likely cater to asia in the forseeable future. Get used to global mmo's being catered to an eastern audience.

Razeekster

I'm honestly scared of Nexon overtaking everything. They are terrible at communicating to their players and never answer tickets. NCsoft always gets back to you within 24 hours (in my personal experience), while Nexon literally takes months, sometimes even years!

KenFisher

Originally posted by Torvaldr

Great article Richard.  There is a lot to chew on there.  What sticks out most to me is the 3.6% figure.  Why has our NA contribution become so anemic?  Is that because of a blooming Asian market or a lack of interest from the NA playerbase?

I'm also curious how Perfect World fits into all of this.  I understand there are a lot of publishers to consider but PWE seems like one of the biggies.  In one of your upcoming articles could you highlight how Nexon, PWE, and other major players fit together, are competing, etc.

Ditto on interest in an overview of the majors.  Also on the market share of individual properties.

Purutzil

A lot of dislike for the asian market and truthfully, I don't get it. A lot of the western market is WHY the market is declining. Many of those ideas of dumbing down games and the likes come from OUR side, not from over there. Not saying of course its all perfect, but I just find it silly people are calling that theres a decline in the MMo market and all the big names as of lately in the West have been Western games, very few Eastern games really get big due to xenophobia and people's reluctance to actually have 'harder' things mixed in.

HeroEvermore

Crazy how small our market. Suprising? Maybe not so much. Games in NA are just not what they used to be and the stuff we get is such a mess when its translated and "westernized".

daeandor

I find this scary and exciting.  Hopefully the indy developers will get supported by the western markets and allow us to play the games we want without succumbing to the asian mega-mmo's.  I'm hoping that we see a resurgence of companies similar to mythic (of old) or ccp that are willing to grow in their niche.

Thupli

3.6% is only scary if we know what it is relative too.  Maybe WoW is also in that same range when comparing %.  Obviously the market is bigger in the east, but I'd love to know total numbers of players for that 3.6% and compare that to total player of other popular western MMOs just to get a reference.  That would be interesting.

 

 

Calerxes

Originally posted by Torvaldr

Great article Richard.  There is a lot to chew on there.  What sticks out most to me is the 3.6% figure.  Why has our NA contribution become so anemic?  Is that because of a blooming Asian market or a lack of interest from the NA playerbase?

I'm also curious how Perfect World fits into all of this.  I understand there are a lot of publishers to consider but PWE seems like one of the biggies.  In one of your upcoming articles could you highlight how Nexon, PWE, and other major players fit together, are competing, etc.

 

You also have to consider that most people on here consider MMO's as mainly MMORPG's and with the article expressing that Nexons bulk of revenue comes from Dungeon Fighter http://dungeonfighter.nexon.net/ its a completely different market. In Asia you play in internet cafe's which makes playing together more natural so they have taken to all sorts on online games more easily than us westerners, games like Dungeon Fighter are mainly laughed at on this boards and ignored by most others. Nexon also has about the same income as EA and Activision so our market is not just about online gaming. It would be interesting to see what the figures are in Asia for non-online games.

Ozmodan

Originally posted by Superman0X

The Asian (and soon Russian) markets are so big that they dominate the global economy (for gaming). With the increased internationalization of gaming due to the internet... it is not unexpected to see the Western Markets become the secondary markets... even to the companys that operate here (Activision/Blizzard, EA, etc). It is becoming more evident that developers have to hit the major markets (Asia/Russia) else they will be pushed out of the global market, or just bought out by one of the companies that do hit the bigger markets.

 

There will be a lot more consolidation in the next few years.. with the Asian publishers just buying up the smaller developers, to re-tool them for the Asian markets. The good news is that this should generate a lot more indies, who can survive in the (smaller) western markets, until they are bought out also.

The Russian market is smaller than the US market, not sure what you are attempting to say there.  China is the bull in the china shop here, the Koreans will probably all be looking at China as a leader soon.

Besides GW2, NCSoft has not had a lot of winners lately.  I don't see anything coming down the pipeline this year either.  Could be that NCSoft is on the decline?  Only time will tell.

I think that 3.6% you are all referring to is the percentage of that companies market share in the west.  You should not confuse that with western MMO market share.  Eastern MMO's do not seem to be that popular in the west.

ShadowVlican

Originally posted by Razeekster
I'm honestly scared of Nexon overtaking everything. They are terrible at communicating to their players and never answer tickets. NCsoft always gets back to you within 24 hours (in my personal experience), while Nexon literally takes months, sometimes even years!

+1 they've still not answered my support ticket to date (my dragon nest account was hacked last year due to THEIR insecurities)

therain93

Originally posted by Ehllfhire
A 3.6% share of the market screams problems for western markets. It means the mmo devs will likely cater to asia in the forseeable future. Get used to global mmo's being catered to an eastern audience.

I'd like to say "not necessarily".....for a self-published game.  I'm terribly sad for the loss of City of Heroes, developed by Cryptic and then sold/developed by Paragon Studios, but it was published by NCsoft.  The percent share that CoH contributed to NCsoft was definitely piddly when you talke about it relatively speaking and I'm sure it contributed to the shutdown, but had CoH been independently published, it could have flourished.

And I think that will be the difference going forward -- purchasing retail rack space for your game box is no longer a requirement, making working with a publisher not necessarily a requirement.  Yes, there are conveniences such as the economies of scale for various support functions (marketing, help desk, server farm, etc.) that a publisher can offer, but social media and proliferation of high-speed internet in America really do make it more than possible to run a profitable game in the West, so long as you're happy with a profit and not just a WoW-sized profit.

snapfusion

This has zero impact on me since NC Soft, Nexon, all these eastern publishes dont make a single game I like or ever will, its just an art style and game design I dont enjoy.  There will always be a western themed niche MMO I like.  Thats the great thing about software.

jtcgs

I have talked about Nexon at length on this site many times...and each time the mouthbreathers refused to believe that F2P can make that much money...

I should place the URL to this article in my sig...

A company does spend over 300 million in a year buying out other companies, including a 15% stake in NCsoft unless they are making hand over fist in profits.

CyborWolfTK

Originally posted by HeroEvermore
Crazy how small our market. Suprising? Maybe not so much. Games in NA are just not what they used to be and the stuff we get is such a mess when its translated and "westernized".

+1

 

Cname

I think the "3.6%" NA market share mentioned in this article is just referring to Nexon's global revenue only  and not the global MMOG market as a whole. 

bobfish

This isn't really anything we didn't already know two or even three years ago.

 

The key piece of information that is missing though is that the Korean market saturated a long time ago and the solution was to diversify, create games that targeted different segments of the market to maximise the revenue.

 

This hasn't happened in the west yet, though we're seeing signs of it with the rise of games like World of Tanks, but there is a long way to go  yet.

 

The money is there, the North American and European markets are massive, but as long as all of the MMO publishers are going after the same "WoW" crowd, they won't reap the benefits.

 

Also, keep in mind that Eastern Europe is full of emerging markets, this year and next Europe as a whole is likely to surpass North America in market size. Leaving NA third fourth on the list behind East Asia, China and Europe (Note China is counted seperately due to their laws against foreign companies).

Draemos

Originally posted by Ehllfhire
A 3.6% share of the market screams problems for western markets. It means the mmo devs will likely cater to asia in the forseeable future. Get used to global mmo's being catered to an eastern audience.

What are global MMOs?  

 

Eastern flavored MMOs already greatly outnumber western ones, if that's your meaning.  There are dozens of MMOs you've probably never heard of that will never see the light of day in the Western market.

MMOs will continue to cater to both markets, and there will continue to be far more eastern flavored ones than western flavored... exactly like it is now.

Basically, your panties are getting in a twist worrying about the future of something that already has happened.

Western MMOs will continue to be released and published, because western gamers on the large don't like asian MMOs.  It's kinda like the same thing with comic books vs anime. 

Now, it's entirely possible that Asian company's will buy up American and European development company's.  But you can be assured that the games they produce will still be catered to a western audience.

Popple

Originally posted by jtcgs

I have talked about Nexon at length on this site many times...and each time the mouthbreathers refused to believe that F2P can make that much money...

I should place the URL to this article in my sig...

A company does spend over 300 million in a year buying out other companies, including a 15% stake in NCsoft unless they are making hand over fist in profits.

 

Don't know about you, when i do math if you have 1000 players and 1/4 pays at the free to play cash shop.How are they making money hand over fist? Player base on a lot of these Free to play games are low.. Now the companies are changing again, because they knew they lost money.The companies are slowly heading to buy to play with cash shops or Vip's..Again i am laughing at those who jump on the ban wagon and fall for the "Market Trick".. Sooner or later it will go back pay to play, when SOME of the players realize they got screwed all along on free to play..

Oh and proven fact if the companies were making money hand over fist on free to play..Why are they laying off, merging, or closing..The only ones who can put the bigger companies out of business are the small companies who does it right the first time..

I rest my case...

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