泥中蟠龍's Game愛歌 [A love song for games of the dragon waiting for an opportunity] Let's take a look at Korea's gaming industry (Part 2)

泥中蟠龍's Game愛歌

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

 

Let's take a look at Korea's gaming industry (Part 2)

 

I'd like to talk about South Korea's gaming industry more specifically.

 

The composite leading indicator (CLI) is a business barometer showing short-term economic movements. The best example of the CLIs is a stock index. It means that the stock market index reflects business forecasting. If buyers expect high earnings, stocks will rise, and the opposite can also happen. The representative CLI for venture capital (VC), which deals with unlisted stocks of startup companies or small businesses, is the scale and the number of cases of investment in the industry.

 

According to data from the Korean Venture Capital Association, investment in the gaming industry has been declined year by year for the past three years from ￦176.2 billion in 2014 to ￦168.3 billion in 2015 and ￦142.7 billion last year. I'm not sure but I reckon it will be worse this year. Of course, the number of investment in Korea's cultural content including video content has also reduced from ￦279 billion in 2014 to 267.8 billion in 2016, however, decreased investment in gaming industry is unusual because investment in most sectors—electricity/machinery/equipment, chemistry/materials, and biotechnology/medical, etc.—has increased steadily during the past few years. Besides, given significantly reduced investment in the video due to the government blacklist stretched beyond culture, the gaming industry is certain to be hit hardest of the whole venture capital investment.

 

We can't tell right away the results of an investment. Investors usually expect great achievements a few years later. Seriously reduced investment, which is regarded as one of the composite leading indicators, means that investment experts have predicted the slump of the local gaming industry in the coming years. It's more than a problem beyond various regulation policies. The domestic gaming industry is losing its vitality. The number of developers will keep decreasing under the influence of diminished investment, so does the number of employees in the industry. Video game-related departments will receive less attention, as new workers are hired fewer.

I mentioned several times before the necessity of an academic-centered approach to the gaming industry and I still maintain my previous opinion. Korea's gaming industry struggling with decreased investment continues to pull down academic progress and it will lose its vitality.

 

To be continued

 

 

※ 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] Let's take a look at Korea's gaming industry (Part 1)

泥中蟠龍's Game愛歌

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

 

Let's take a look at Korea's gaming industry (Part 1)

 

Lawmakers, government officials, and civilian experts gathered in the National Assembly recently to discuss the video gaming industry policy of the next administration. The purpose of the discussion was to aware of the current problem of the gaming industry policy and to set a new direction for Moon administration. In the policy debate, many experts including Kim Byeong-Kwan, developer and entrepreneur-turned-member of the National Assembly, Hwang Seong-Ik, the president of Korea Mobile Game Association, and Lee Jae-hong, the president of Korea Game Society, etc. exchanged opinions about regulatory reforms and necessity of the institution dedicated to the industry. As a person engaged in the game-related field, I'd like to talk about this subject.

 

Many people say that the domestic gaming industry has been in trouble for the past few years. I have also agreed with these people for various reasons. So I want to give the readers exact figures to identify how bad the situation is to analyze problems.

 

First, let's take a look at the size of the market for Korea's gaming industry.

<Market size and outlook of the local gaming industry>

Type	2015		2016(E)		2017(E)
	Sales	Growth rate	Sales	Growth rate	Sales	Growth rate
Market Size	107,223	7.5%	113,194	5.6%	116,496	2.9%

(Korea's Gaming Industry White Paper 2016)

This table shows that the national gaming industry has continued its growth with its declining growth rates.

 

<Number of domestic content companies and employees>

Type	2012		2013		2014		Year-on-year rate
	Company	Worker	Company	Worker	Company	Worker	Company	Worker
Comic	8,856	10,161	8,520	10,077	8,274	10,066	-3.7%	-1.7%
Music	37,116	78,402	36,863	77,456	36,535	77,637	-0.7%	0.3%
Game	16,189	95,051	15,078	91,893	14,440	87,281	-8.6%	-2.1%
Movie	2,630	30,857	1,427	30,238	1,285	29,646	-23.4%	-0.8%

(Korea's Content Industry White Paper 2015)

This table shows that the domestic content industries have suffered in recent years throughout the field and the gaming industry is even worse. The industrial growth rate is going down to a similar level of the inflation rate and the dwindling number of workers is undeniable proof that the local gaming industry has declined.

 

To be continued

 

 

※ 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] A publisher can't have it both ways

泥中蟠龍's Game愛歌

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

 

A publisher can't have it both ways

 

Recently, the news that Ban Ki-moon announced that he would not run for the presidential election is the talk of the town. Sometimes we define ourselves by the expectations of the others. So many people around us make the wrong decision since they think too highly of themselves or don't have an accurate picture of their abilities, for example, an unsuccessful athlete-turned-entertainer or a failed entertainer-turned-entrepreneur. So in that sense, I support the former UN Secretary-General's position. The diplomatic expert probably doesn't have all the necessary qualities for a politician and it doesn't seem to fit for him to take part in local politics due to his lack of understanding of the domestic situation. I think it's comparable with legendary basketball icon Michael Jordan who tried to be a professional baseball player.

 

I have been hearing about video game publishers focusing on creating a video game for some time now. Publishers who are responsible for marketing, sales, and PR, etc. differ significantly from developers, although they are in the same industry. Furthermore, publishing a video game created by a developer that signed a contract with and publishing a video game made by colleagues working in the same office from morning till evening is different. A few film distributor did great at the box office with self-production movies. Marketing and sales must be based on objective data, however, it's not easy to remain objective about the self-contained project. Besides, game developers who have a rich game development environment tend to add game elements with zeal and avidity, which often increases the break-even point due to the increased amount of production costs and expenses and delays during the development process.

 

In spite of little chance of success, a video game company can be good at both publishing and developing a video game. A publisher which had great results from a self-contained project has no occasion to focus on a developer's less-profitable game and, similarly, the developer doesn't want to work with the publisher lacked sincerity. Every game maker wants their project to be the publisher's priority.

 

The management would change the future direction after careful consideration and I don't want to raise the questions about the decision. However, the publisher can't have it both ways realistically. It's wishful thinking. If the publisher decides to focus on the self-contained project, it needs to abandon the publishing game and put its nose down in only one task at a time to be successful. In contrast, if it wants to publish a developer's game, it is better to give up the self-contained game. Now is the time for domestic video game publishers to clarify their attitude. I expect them to choose between the two and focus on it.

 

 

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

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

 

Translation by Kim Ki-hui