Korea Games Industry | 5 Facts
Local Publisher Market Dominance
South Korea's gaming market is characterized by its unique blend of global influence and local dominance. Companies like Nexon, Netmarble, and NCSoft are not just major players locally but also command significant attention on the global stage, especially in the mobile gaming sector. In the first half of 2023, these companies continued to lead in revenue generation, partly due to their strong IP portfolios and savvy investments in both domestic and international markets. The absence of American publishers like EA for example is especially noticable given how strong their EA FC Mobile game performs in Korea.
What might be one of the contributing factors to why these local Korean firms perform well is because of their integration with many of the payment platforms that players have at their disposal. Take a look below at just how many methods players have for buying stuff.
Lot of Payment Platforms…
This really struck me, coming from NA at least. Carrier billing is quite novel and so are the digital wallet options. The competition among payment platforms in Korea reflects the broader digital transformation of the economy. Digital wallets like KakaoPay and Naver Pay, alongside traditional game payment platforms, provide consumers with multiple options for transactions, underlining the importance of convenience and security in payment methods.
What’s intriguing is just how hard these platforms have to fight to secure market share. Two things hurt these platforms:
The margins on payment platforms generally (e.g Stripe) are incredibly thin. They require massive amounts of transaction volumes and value to pay the operating costs of running their business
Almost every player juggles multiple payment options, they are practically interchangeable. We see this in India as well (think Google Pay vs Paytm). It is near impossible to build customer stickiness.
This variety in payment options supports the monetization strategies of game developers and publishers, enabling them to capture a wider audience by catering to different consumer preferences.
Consumer Spending Habits
Understanding why some players choose not to spend money on games is crucial for the industry. No North American moral high ground here, dismissing free to play monetization as predatory here. The primary concern for Korean gamers revolves around the perception of value and cost, rather than the monetization model itself (e.g., freemium vs. pay-to-play). This insight prompts game developers to focus on creating more engaging content and fair pricing models that can convince players of the value they're getting for their money.
It's a delicate balance to strike, ensuring games are financially viable for developers while keeping them accessible and attractive to players. Every game strikes it differently and every market values it differently. This is really tough for developers who want to enter multiple markets with different monetization models (e.g compare MTX focused Korea to Ad-spend focused India) but can’t really execute multiple monetization models.
Regulatory Bodies
Korea is one of the most mature gaming markets in the world and with it comes an armada of regulatory bodies. Organizations like the Korea Creative Content Agency (KOCCA) and the Game Rating and Administration Committee (GRAC) are instrumental in both promoting and regulating the gaming sector. Their efforts include supporting game development, ensuring ethical game content, and managing the legal framework within which companies operate. This dual role of support and regulation reflects the government's recognition of the economic and cultural importance of gaming, while also addressing societal concerns related to gaming habits and content.
The impression I get is that they are not restrictive as let’s say China or Vietnam in preventing game launches for example. But what it does say as is just how much government spending is going into the support of its games industry. I
Genre Popularity
RPGs (Role-Playing Games) continue to dominate the mobile gaming sector in South Korea, a trend that has been consistent over the years. Not exactly a surprise, and this data point is heavily influenced by how MOBA’s are categorized as a genre. This genre's success is attributable to its deep narratives, character development, and engaging gameplay, which resonate well with Korean gamers' preferences.
The financial success of RPGs also reflects the effectiveness of their monetization strategies, often involving in-game purchases that enhance the gaming experience without being overtly intrusive. Games like "Lineage M" by NCSoft have set benchmarks in how to successfully blend engaging content with profitable monetization, illustrating the potential for other genres to grow if they can similarly engage the Korean gaming audience.
