October 23, 2014

泥中蟠龍's Game愛歌 _ Korea's game industry in crisis

泥中蟠龍's Game愛歌
[A love song for games of the dragon waiting for an opportunity]
 
Korea's game industry in crisis
 
The United States and the Soviet Union had always been rivals in many areas since World War II and the two superpowers put securing German rocket technology, the best one of those days, on the top of the list. Of course, it was possible because of Nazi Germany's defeat. America recruited German scientists, engineers, and technicians before Germany was defeated and collapsed under a secret program named Operation Paperclip. Soviet Russia, which was fallen behind the competition, secured production facilities. As a result, the Soviet Union stayed ahead of the competition for aerospace industry based on its infrastructure, however, it was beaten by the United States which had the world's best space technology.

In recent years, the Korean gaming industry has developed in a difficult situation. Government has regularly imposed regulations to reduce the teenagers' playing time under the pretext of protecting the right to study and sleep of youths and recently there is a discussion of a Game Addiction Law to regulate video games such as drugs. Some people in the gaming industry call themselves as 'drug manufacturers' and other ones think about parental roles because their children might be ashamed of what their parents do.

Recently Chinese big companies have successively invested in domestic video game companies. Even some people say that huge capitals from China are taking over Korean game studios like shopping. The gaming industry is mostly based on gaming industry workers because there are very little manufacturing facilities. Eventually, there might be left local game firms and employees that are subordinate to Chinese capitalists.

It usually takes at least a few years up to more than a decade to bring qualified professionals after being aware of a shortage of workers. Now a lot of game developers prefer overseas companies to domestic ones and many of them regret being members of the gaming industry. Also, a large number of game studios are going broke daily. The recent Korean gaming industry, in spite of its poor industrial base, has maintained the growth relying on foreign capital. But the gaming market is becoming more dependent on overseas capital. There should be the drain of the domestic industrial base into foreign countries and the local companies would disappear due to a shortage of new workers when it will be incessant a few more years.

A flower in a flowerpot grows as much as the size of the pot. I don't mean that the gaming industry should be the beneficiary over the other field. But we should not stand in the way of the industry's advancement at least. The local gaming industry is mostly dominated by overseas firms and they might take full control of the whole industry in which more than 100,000 workers are engaged. The continuously tightened regulations, aside from support from the government, is not much different from confining the domestic gaming industry in a small flowerpot.

Many local game developers are seduced to shift their companies overseas with various benefits in a bad situation where there are higher marketing costs, excessive government restrictions, and increased competition, etc. It seems like an Operation Paperclip for Korean game companies somewhere. The local game industry hasn't collapsed yet. But I cannot help thinking of a cup of soju because of tens of thousands of employees who are called drug manufacturers. With due respect to a great number of workers in the gaming field, I deeply hope that the Korean gaming industry will not be German rocket technology.



※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.
   (http://www.khgames.co.kr)

    Translation by Kim Ki-hui

September 25, 2014

泥中蟠龍's Game愛歌 _ Looking back on 10 years in the mobile gaming industry

泥中蟠龍's Game愛歌
[A love song for games of the dragon waiting for an opportunity]
 
Looking back on 10 years in the mobile gaming industry
 
I have worked in the gaming industry since a cold winter day in January 2002. Looking back, writing a column related to a game, it seems as if ages had passed since then when I was an amateur gamer who had no background in the field.

The reason I give a long-winded explanation is to mention what I felt during a recent meeting for investment with a developer about the constraints of a mobile device for a mobile game. The developer, who has played an online game for a long time, talked about mobile computer device bringing about inconvenience: small screen, low specification, and difficulty of customization due to various devices.

Listening to him, it brought back the moment when I just set foot in the gaming industry, which made me be lost in the old memories. Mobile phones featuring color displays, one of the technologies that phone manufacturers were evaluated by, were first introduced in 2002. Phone makers also competed for a better sound such as 16 or 40 poly sound. And it was the time when flip phones were commonly used. A slide phone, which is rare to find these days, however, was considered as one of the most innovative technologies, was released in 2002 and its commercial formed attractive subjects of conversation in those days.

Let's back to the point. There have been many changes in most industries in the last 10 years and the mobile gaming industry is at the forefront of those changes. Early mobile game developers used to stay up all night to reduce storage space like 1-2 kB due to poor device environment. Given my first game with 127 kB, the recent environment, in which mobile games of over 100 MB are common, is quite different just like independent films and Hollywood blockbusters. I do remember and I was deeply impressed when a first mobile game of 1 MB was released 10 years ago. It is still fresh in my memory about the MB-capacity mobile game which was finally come out. The earliest mobile game developers had to make dozens of different versions in accordance with image resolution, mobile device, and mobile carrier, which is compared to today's slightly different versions depending on the producer and wireless carrier.

Mobile game market, as I mentioned in the beginning, is the fast-growing industrial field. It is needless to that it will move ahead for quite some time. It seems hard to expect what is coming out in 10 years because I cannot help laughing at mobile games released 10 years earlier. Picturing a local mobile game as the leader in the global market, I hope that I will enjoy talking about memories with device constraints and game-making difficulties, etc.
 

※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.
   (http://www.khgames.co.kr)

    Translation by Kim Ki-hui

September 11, 2014

泥中蟠龍's Game愛歌 _ Video game development and investment

泥中蟠龍's Game愛歌
[A love song for games of the dragon waiting for an opportunity]
 
Video game development and investment
 
I have serially written a column about the video gaming market and video game development over a period of time. But this time, I'd like to talk about a game developer which I, as a venture capitalist, invest in. I don't intend to whine about it.
The reason I chose this topic because of what I went through recently. This column is actually for game developers which attract investment on the borrower's side. The recent experience made me feel bad is quite simple. A cash-strapped game studio having developed a good game asked me to make an investment and I couldn't help but turn down the suggestion after thorough consideration. Some readers might think that what the problem is if there is a good game. Besides, the majority of leaders of game developers actually do think so.

It takes a long time and effort for a developer to make a game in general. The process includes game design, development, and graphic art, etc. Even a very simple game takes at least 3~4 months from designing to publishing, up to 5~6 years. Of course, I don't mean that it takes 5~6 years to implement investment. But, on the contrary to this, it absolutely cannot be done in 1~2 weeks.

When it comes to investment in a video game, a venture capitalist (VC) decides to invest money after examining a developer, the production team, and its business condition etc. in 1~2 weeks to a few months and additionally looking into a difficulty in an external problem, a legal issue, the accuracy of the data from the company etc. And the investor should discuss the details about the condition of investment with the investee and perform the basic administrative procedure. It takes 2~3 months to 1 year for the whole process.

Let's go back to the story of the game studio in the beginning. When I had the meeting with the representative, the developer was in a sticky situation where employees weren't being paid regularly and the leader came to me after doing everything he could. I felt sorry as I told him frankly, however, investment to the developer is actually quite challenging. Because there is a possibility of causing troubles within a few months while going over issues related to the investment; talented staffs might move to other companies due to unpaid salaries and the investor might find other debt which he/she didn't catch. What I want to talk about is that the investee should come to ask the investor at least 6 months before actually he/she needs the extra money. That way VC is able to have enough time for a proper review of the data from the developer and also have affection for the company. And, last but not least, it is human nature to want to do someone a favor whom I've been watching for a long time. So I hope that many representatives of video game makers which want to attract investment go over the expense plan and get things ready early in advance. The investment process cannot be done in 1~2 weeks like as if a new game cannot come into the world in such a short time. Failure to provide an opportunity for the potential firm is personally very sad and heart-breaking.


※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.
   (http://www.khgames.co.kr)

    Translation by Kim Ki-hui