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 3)

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 3)

 

In the previous columns, I expected that Korea's gaming industry will be difficult in the years ahead. Aside from many other causes and solutions to the bad situation in the field, I want to deal with government policy-related topics.

 

The gaming industry has characteristics of content and software at the same time. Also, various game-related government agencies have announced promotion policies and regulation policies on game addiction which many people kept continually expressing concerns about. When it comes to game promotion policy, the Ministry of Culture, Sports and Tourism (MCST) and Ministry of Science, ICT and Future Planning (MSIP) are in charge of cultural content and content convergence respectively. On the other hand, the Ministry of Gender Equality and Family (MOGEF) and Ministry of Health and Welfare (MOHW) are involved in regulation policy to prevent excessive absorption on games and the Ministry of Education, Science and Technology (MEST) is directly related to student education. Also, the Korea Creative Content Agency (KOCCA) takes an important part in promoting the cultural industry and National IT Industry Promotion Agency (NIPA) supports the gaming industry as a branch of the information and communications industry. Besides, Game Rating and Administration Committee (GRAC) rates video games. And there is the Digital Industry Promotion Agency by region.

 

This might look like it is going better for the domestic gaming sector expecting a variety of support providers. However, in contrast, it means that no government agency fully supports the industry. Furthermore, maintaining a consistent and balanced regulatory approach is not easy due to too many game-related government organizations which have conflict-of-interest rules. MOGEF introduced the controversial "Shutdown law (also known as the Cinderella law)" and MEST proposed the "Cooling Off System" bill to prevent online game addictions. Even MOHW has conducted a video game addiction prevention campaign. Korea Venture Investment Corp (KVIC), which is a fund of funds holding a portfolio of other investment funds, hasn't contributed to a pool of money for the gaming sector in recent years.

 

The workers in Korea's gaming industry are the largest number in areas of cultural content and it has established the actual export record of $2-3 trillion a year. I can't understand why the government tries to impose strict controls on the world-class gaming industry not to protect and promote it. A Korean underage player was embarrassed at the international E-sports tournament because he had to give up during the game due to the Shutdown law. And, unlike the unfriendly Korean government, many countries attract local video game businesses pledging full support.

 

In spite of ridiculous situations, the domestic gaming industry has consistently continued to grow. The rate of growth has slowed, however, the gaming sector already exceeded W10 trillion in terms of revenue and sales are likely to rise further. So, in that respect, the lack of an exclusive organization designed to promote the field of game is absolute nonsense. Korea's gaming industry shouldn't have lots of difficulty between the related organizations with their inconsistent policies. It's necessary to build a systematic support system through the institution exclusively for game-connected matters. I expect that the new government will set up a Korean game council, which takes full charge of the gaming sector, like the Korean Film Council (KOFIC).

 

 

※ 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 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