泥中蟠龍's Game愛歌 [A love song for games of the dragon waiting for an opportunity] Quo Vadis? Where is the global gaming industry going?

泥中蟠龍's Game愛歌

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

 

Quo Vadis? Where is the global gaming industry going?

 

I wrote about U.S. interest rates and its influence on inward investment in South Korea a couple of weeks ago; American investors will leave for the States as the U.S. interest rates go up. And recently, Donald Trump was elected the 45th president of the United States, beating his strong opponent Hillary Clinton. I don't like to mention who the better leader for America is. I don't know that much about him and I can't explain the difference between the former presidential candidates just in a few lines. However, It's predictable that the United States will shortly raise its key interest rates according to his presidential election pledges regarding economic policy. It can be bad news when it comes to investment in the national gaming industry.

 

The U.S. president-elect made his support of a weak dollar blaming the Federal Reserve. The flow of cross-border investment depends on the U.S. dollar. Many local game developers are highly regarded for their technical skills and production capabilities, however, they seem relatively less competitive in the global market compared to made-in USA or England products. In other words, they are undervalued to their rivals in Europe. European game makers will have chances to enter overseas markets and exchange fluctuation will lower their corporate values. Many foreign investors will prefer to choose the European companies—the better one at the same price, to communicate effectively.

 

Besides, China's economic retributions are growingly visible throughout Korea's cultural contents including movies, K-dramas, K-pop, etc. since the Park Geun-Hye administration announced the deployment of the THAAD missiles to South Korea. China has stepped up its sanctions against South Korea more than ever before—including stricter sanctions on local video content—, which means a definite sign that China will impose new sanctions on domestic video games. Amid heating competition in Korea's video game market, the Chinese mobile game market has been a very good alternative for national game developers for a recent couple of years. It means that the domestic game makers will lose their market.

 

I don't want to discourage local game studios from staying in Korea because the domestic video game industry is at risk. They need to find the causes of the sudden change in the global environment and should cope with it in advance. Now the local game developers need to study hard and learn more about the rapidly changing world situation. It's the right time for them to establish a niche in the international market with the aims of globalizing their Korean-made video games. They should not be contained within the narrow domestic market where thousands of developers are competing with each other.

 

 

※ 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] Start-ups and pro baseball

泥中蟠龍's Game愛歌

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

 

Start-ups and pro baseball

 

Recently I read an article about Kim Jin-Wook, a new manager of KT Wi—a South Korean professional baseball team. In the story, although it may sound strange, he was said to order his staff not to give him any information about players. It was quite new for me who have been familiar with the teachings of elders or superiors. But I could not help nodding my head in the agreement since I heard the rest of the story. He means that pushing players to take them to the next level will not lead to a high level of baseball proficiency. The new head coach thought that a very important skill is making good relationships with each player to help them to learn how to play for themselves.

 

This case cannot be simply work in most other companies. Running a business is based on manuals for stable production and management and the firm has to produce a product of the same quality in spite of changes in group membership. And creating effective business systems is very important. On the other hand, the professional baseball team and start-ups have much in common.

 

Performances of both greatly depend on individual ability. If the highest level players—Ryu Hyun-jin, Lee Seung-Yeop, and Lee Dae-ho—are replaced with moderately skilled players or inexperienced rookies, the team cannot be expecting to do well as much as the original members. Likewise, if a developer, senior executive, or team leader in the start-up with a small number of employees is replaced with someone, the company is not what it used to be.

 

Since I have worked in the venture capital firm for five years, I've seen many cases that CEOs fired employees, who were definitely not impressed, to replace them with new staff; they tended to identify start-ups with mid-size companies. In general, the chief executive officers made mention of the system. They thought that a reliable and effective business system can guarantee the company's stable growth. Of course, it applies to midsize businesses. However, a startup company, which typically faces high uncertainty, starts to lose its power to grow at the very moment when members of the firm feel that they are part of the business system. I'm sure that nobody wants to be treated as an alternative mechanical part. They probably would get a stable job without the fear of taking risks not joining as employees at a recently created company. Safety and stability are not so bad, however, they do not fit into general startup characteristics.

 

Video game developers are mostly startup companies. Building a stable system for those startups does not hold water. In addition, so does a venture capital firm where I work for or a business organization that partners with a startup to come up with something. If you discourage members of the group for expressing their opinions only emphasizing the business system although you are also a startup related worker, it's not much different from an idea that a high school baseball team which moves according to its coach can perform well as much as a pro baseball team does. Startups and mid-size companies are totally different. In other words, they are not in the same league. I hope that a lot of startup CEOs will not be under the illusion.

 

 

※ 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] What publishers need now is to reflect on themselves

泥中蟠龍's Game愛歌

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

 

What publishers need now is to reflect on themselves

 

My wife and I watched a movie Where to Invade Next last weekend. It's the black-comedy-like American documentary film—suggesting some European countries' alternative methods of solving social and economic problems in the United States—directed by Michael Moore who is famous for his other films such as Fahrenheit 9/11 and Sicko. I was more interested in labor rights among many issues—school education, health care, and human rights, etc—which the film deals with. To sum up, a corporate has to protect the rights of workers if it wants them to promote the company's interests. It also applies to every boss-subordinate relationship by employment agreement in the entire industry. I'd like to talk about how to establish a fair relationship between the two parties.

 

Recently I participated in a workshop for the revision of the legal system in the content industry. There were case presentations on various unfair business deals, especially examples in the gaming industry. Most of them were about dishonest business practices between big publishers and small businesses. Most smaller developers actually can't afford to take legal action against those large-size companies. And large publishers know the fact better than anyone. Domestic game publishers have canceled contracts with developers due to the recent slowdown in the Korean economy and deteriorating profitability in the local gaming industry. Besides, some have neglected to promote newly-released games. Most publishers are now only focusing on marketing for a few cost-effective existing video games disregarding the other untested new games. In this situation, a developer who made a new game cannot help facing a state of financial difficulty.

 

As the employer-employee relationship, it is highly desirable that the developer's achievement leads to the publisher's success. However, at present, many publishers turn a blind eye to smaller game studios in a predicament for its immediate gains. Even worse, the game maker, which I invested in, was absurdly asked to make up for the financial loss recently when the company demanded cancellation of the contract since the publisher didn't spend proper marketing expenses to promote the new game. I heard on the grapevine that the publisher will downsize its publishing business to concentrate on self-development games while it's focusing on existing games that have gotten satisfactory results so far.

 

A video game publisher is a company that publishes and distributes video games. If it looks down on smaller developers because it is the large company with sufficient money, none of the game makers want to work with the untrustworthy distributor. Neither of them will help out with the publisher when it faces difficulties some time even though it currently has a firm grip on the local gaming industry. They may develop a game itself not because of its business strategy, but rather of concerns over a lack of profitable video games. A less experienced marketing team with untested new games may test its ability for a self-developed video game which costs more than millions of won to develop. Now I expect that big publishers try to be in a trustworthy partnership with smaller developers to ensure that won't happen.

 

 

 

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

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

 

Translation by Kim Ki-hui