泥中蟠龍's Game愛歌 [A love song for games of the dragon waiting for an opportunity] Think different bit

泥中蟠龍's Game愛歌

[A love song for games of the dragon waiting for an opportunity]

 

Think different bit

 

Recently, the banning of the 'burkini'—the-whole-body-covered swimsuit, except face, for Muslim women—has stirred up controversy in France. France's ban on wearing the bathing suit, which is similar to a full-body athletic swimsuit, is obscure to me in the country representing liberty, equity, and fraternity. The move was criticized by many people throughout the world because it's the suppression of personal liberty. On the other hand, others believed that it reflected public sentiment in France against radical Islamic terrorist groups. But I think that we can look at this from a different perspective. In France, politics is constitutionally separated from religion and all types of religious expressions from public places are unacceptable. The burkini ban may be a matter of sartorial choice, however, it is quite a different story in the country where a big cross or other religion-related installations cannot be displayed in public places by law. Because the general public can be aware of it as a sign of religious expression. But, apart from that terrorism is a deadly sin or crimes of violence, there is a whole different story about whether Muslims are good or bad.

 

I'm not particularly interested in the swimsuit for Muslim women. I'd like to mention vastly different perspectives on the issue. Some value freedom and others warn of possible dangers of Muslims. Someone talks about the social significance of religion or the historical legitimacy of Islamic groups. Diversity helps people to keep things in perspective beyond the superficial single event. Sometimes a narrow-mindedness view makes us forget important things or blinds us to different ideas. Uniformity leads to other problems all the time. A diversity-deficient-organization may expose itself to the danger of ruining the whole structure due to an unsolved problem. If a farmer plants a single item, the crop may be heavily damaged by blight and harmful insects. Therefore, valuing diversity is an essential aspect of the cultural industry. Similar films or video games will eventually threaten to put all of the film studios or game developers out of business when they are shunned by consumers demanding the new.

 

The recent gaming industry is flooded with numbers of video games that are only slightly different in appearance. Users are no fools. Gamers are obviously aware of the similarity between those games even though they haven't turned away from them yet. You are probably getting tired of eating the same food for a month no matter how delicious it is. Cook needs to try to come up with various recipes to enjoy the same ingredients. So do video games. Even many video game planners making complaints about users—most of them feel safer doing something familiar—and management—they prefer well-tested systems—, are often afraid of breaking free from the frame. Korea's gaming industry is experiencing large difficulties. The local gaming industry is losing competitiveness due to diminished both foreign and domestic investment and lower returns in Korea, while China further enhances video-game technologies. I don't mean that developers should ignore or throw away the genre of conventional video games. But the similar games lacking novelty may speed up user migration faster and there will be no place for national game makers to take a step back.

 

 

※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.

(http://www.khgames.co.kr)

 

Translation by Kim Ki-hui

 

泥中蟠龍's Game愛歌 [A love song for games of the dragon waiting for an opportunity] Video game and fund (Part.3)

泥中蟠龍's Game愛歌

[A love song for games of the dragon waiting for an opportunity]

 

Video game and fund (Part.3)

 

In Part.3, I'd like to mention how investors see video game startups. Recently, I had an investment consultation with the CEO of a video game developer. Of course, as a venture capitalist, it was not unusual for me to have a one-on-one consultation with a potential investee looking for an investment opportunity. I was merely surprised at a heavy amount of fixed costs. People who want to start a so-called business venture should be ready to explore an unknown territory by taking risks for future growth. In particular, they can cut non-labor costs including rent, buildings, and office machinery, etc. in contrast with other process industries. Workers in listed or large firms commonly receive high salaries, however, most employees in startups with very low sales cannot expect it as much as those large income earners. Furthermore, the median wage for the workers in those company is not that much higher because of various levels of salaries of the members. For example, a company, where its total number of employees is about twenty, generally spends an estimated 80-90 million won for monthly fixed costs including personnel expenses which account for approximately 80-90 percent of the total costs.

 

The fixed costs of the twenty-employee company were about 140 million won which is equal to the average costs for a sound firm stayed in the black. Of course, I don't mean that a worker at a young company should be paid well below the minimum wage. As a nine-to-fiver, I think it makes perfect sense that salary should be increased depending on individual ability. However, start-ups generally are made up of future-valued people and they offer many ways to motivate their workers such as various incentives or stock options. If workers in the company without any sales receive the same pay as other stable corporate, it means that not only working-level staff but also executives are paid very high salaries. From the investor perspective, those executive directors seem to live comfortably with other people's money. The more absurd fact is that there are many similar cases in the industry.

 

As I mentioned earlier, the external environment is not friendly to the domestic gaming industry. And I said that surviving is the most important in these hard times. Most people in the field probably agree that the current investment environment is not that good and the industry is in deep trouble. Nonetheless, whenever I have a conversation with local video game business owners, I often feel that most of them are not tend to aware of the current crisis. All members have to tighten their belt if they want to survive. And executives—the biggest beneficiaries when the company succeeds—should naturally sacrifice the present to the future than working-level employees. Intensity and passion are essential for a business venture. I've never heard of the word 'cash-rich startup' before. The rich business venture is no longer a start-up.

 

 

※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.

(http://www.khgames.co.kr)

 

Translation by Kim Ki-hui

 

 

泥中蟠龍's Game愛歌_Video game and fund (Part.2)

泥中蟠龍's Game愛歌

[A love song for games of the dragon waiting for an opportunity]

 

Video game and fund (Part.2)

 

In Part.2, 'd like to talk about not the influence of the world capital market but the global video game market on the domestic gaming industry. The Korean gaming industry is highly interlinked with the global games market. In the early 2000s, many local video games—mostly PC games—generated a lot of revenue since they made inroads into the global market, which helped some of the companies to list on KOSDAQ at that time and they are now estimated between hundreds of billions to trillions won worth of valuation. Also, Korea's mobile-game developers were in high demand worth of between tens of billions to hundreds of billions won of valuation across the world based on their advanced technology in time for the initial growth of the smart-phone market throughout the world. It could not have happened without large foreign capital in accordance with the high valuation of the national mobile game makers. China, which was emerging as a powerhouse in the field of the mobile game, particularly tried to find potential developers with state-of-the-art technology to put its money on.

 

However, Korea's mobile game companies are not attractive investment destinations to foreign investors any more than before. It's because of the closed technology gap between local game developers and foreign game makers. If there is a relatively lower valuated company within a neighboring country, it's natural for a foreign investor to move its capital to the new attraction.

 

A corporate is a product in the investment market. Of course, prices depend on demand and supply. A company, which was worth about thousands of millions won just three or four years ago, is now valued to be approximately 1 trillion won of valuation and vice versa. In recent years, while new mobile game studios have popped up around the globe, developers in their early days are appreciated way below than expected on the whole. It is because the supply and demand are not well balanced. However, in spite of a glut of video game companies all over the world, most domestic game makers are not satisfied with a lower valuation than they hope to obtain. Decreased demand results in lower prices. The narrowed technology gap and way too high valuation won't attract not only overseas investors but also domestic investors. And in fact, that's what has been happening since last year.

 

I don't mean that local mobile game developers should unconditionally lower their valuation to get funding from investors. But, as I mentioned earlier, people make a video game and money is essential for the employees. It's time to prevail over hard times. Only survival is ever really strong. Surviving means that firms adapt to a changing business environment. However, many local developers still cling to false hope. I suspect that it's time for them to seriously consider to survive in the overheated mobile game market.

 

 

※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.

(http://www.khgames.co.kr)

 

Translation by Kim Ki-hui