{"id":2206517,"date":"2024-09-18T17:25:36","date_gmt":"2024-09-18T08:25:36","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206517"},"modified":"2024-09-19T15:54:32","modified_gmt":"2024-09-19T06:54:32","slug":"south-koreas-game-developers-bet-big-on-consoles-as-global-market-heats-up","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/09\/south-koreas-game-developers-bet-big-on-consoles-as-global-market-heats-up\/","title":{"rendered":"South Korea\u2019s game developers bet big on consoles as global market heats up"},"content":{"rendered":"

South Korea\u2019s video game industry is undergoing a significant shift from mobile to console gaming, driven by changing market demands and global expansion. Developers face opportunities and risks as they adapt to new platforms and seek to maintain a competitive edge in a rapidly changing market.<\/span><\/p>\n

SHIFT TO CONSOLE GAMING<\/b><\/p>\n

South Korean game developers, which have long dominated the <\/span>mobile gaming sector<\/span><\/a>, are now pivoting toward <\/span>console and personal computer<\/span><\/a> (PC) titles in response to a declining mobile market. According to a <\/span>2023 survey<\/span><\/a> conducted by the Korea Creative Content Agency, mobile gaming engagement in South Korea fell sharply, from 62.9% in 2022 to 53.2% in 2023.<\/span><\/p>\n

This marks a clear decline from the heights of the COVID-19 pandemic when mobile gaming surged as a preferred form of entertainment. As players increasingly seek more immersive and technically advanced gaming experiences, console games are emerging as the next area of focus for South Korean developers.<\/span><\/p>\n

In contrast to the shrinking mobile market, console gaming usage increased by 1.8 percentage points to 15.1% during the same period.<\/span><\/p>\n

Console gaming has not only outlasted the temporary boom in mobile gaming due to the pandemic but has become more appealing as hardware like the PlayStation 5 and Nintendo Switch continue to capture consumer interest.<\/span><\/p>\n

South Korean game company Nexon\u2019s successful crossover of games like \u201c<\/span>Dave the Diver<\/span><\/a>\u201d to the Nintendo Switch exemplifies the opportunities that console gaming presents. Originally a PC game, \u201cDave the Diver\u201d found new life on consoles, highlighting the broader industry\u2019s need to adapt to shifting player preferences.<\/span><\/p>\n

Console games offer larger, more immersive experiences than mobile games, allowing developers to create richer narratives and more complex gameplay. This aligns with global trends in gaming, where players seek high-quality content that pushes technical boundaries.<\/span><\/p>\n

For South Korean developers such as Nexon, which has shifted development resources toward console projects, expanding into the console market is not just a response to domestic changes but also a necessary step in diversifying their gaming portfolios and maintaining international relevance.<\/span><\/p>\n

\"\"

A promotional poster for Nexon’s “Dave the Diver” video game, Jan. 11, 2024 | Image: Dave the Diver via Twitter<\/a><\/em><\/p><\/div>\n

GLOBAL EXPANSION STRATEGY<\/b><\/p>\n

International collaborations are another measure South Korean gaming companies increasingly utilize to remain competitive. For instance, Nexon\u2019s <\/span>partnership<\/span><\/a> with Saudi Arabia\u2019s Savvy Games Group reflects a broader trend of South Korean companies seeking new markets.<\/span><\/p>\n

Saudi Arabia, in particular, has emerged as a key partner, with significant investment in South Korean gaming companies and a focus on fostering local gaming talent through partnerships.<\/span><\/p>\n

However, South Korean game developers face increased competition from Chinese companies, which are rapidly gaining ground on the global stage. \u201c<\/span>Black Myth: Wukong<\/span><\/a>,\u201d developed by China\u2019s Game Science, has been a standout example of China\u2019s growing influence in the gaming world.<\/span><\/p>\n

Released in August, the game sold over 18 million copies in just two weeks, highlighting the rising capabilities of Chinese developers and their ability to compete on the global stage.<\/span><\/p>\n

Chinese developers have also made significant inroads into mobile and PC gaming markets that South Korean developers have traditionally dominated. Games like \u201c<\/span>Genshin Impact<\/span><\/a>\u201d and \u201c<\/span>Honkai: Star Rail<\/span><\/a>,\u201d produced by China\u2019s <\/span>MiHoYo<\/span><\/a>, have attracted large global audiences and continue to challenge South Korea\u2019s position in the industry.<\/span><\/p>\n

As South Korean companies expand globally, they must contend with this new level of competition, particularly as China\u2019s AAA titles \u2014 high-budget, high-profile video games \u2014 begin to set new standards for production quality and market success.<\/span><\/p>\n

\"\"

A promotional poster for Game Science’s “Black Myth: Wukong” video game, June 18, 2024 | Image: Black Myth: Wukong via Twitter<\/a><\/em><\/p><\/div>\n

BLURRING LINES<\/b><\/p>\n

Despite these challenges, smaller, creative South Korean games are gaining global attention. Nexon\u2019s \u201cDave the Diver\u201d is a prime example of how smaller-scale, innovative games can achieve commercial success.<\/span><\/p>\n

Released in 2023, the game quickly became a global hit, selling over 4 million copies. This success demonstrates that South Korean developers can capture the attention of international audiences by focusing on gameplay innovation rather than large-scale production.<\/span><\/p>\n

Nexon\u2019s decision last week to <\/span>split off Mintrocket<\/span><\/a> \u2014 its subsidiary company that developed the game \u2014 for it to become a separate business entity demonstrates how major game developers are blending the creative freedom of indie developers with their resources.<\/span><\/p>\n

Now,\u00a0 technically an independent company, Mintrocket has more control over its decision-making processes, allowing for faster development cycles and a distinct creative direction without the same level of direct oversight from Nexon\u2019s corporate structure while still benefiting from its financial backing and infrastructure.<\/span><\/p>\n

This setup, which blurs the distinction between indie game developers and mainstream game companies, allows Mintrocket to take creative risks that other small, fully independent developers might not be able to afford.<\/span><\/p>\n

Nexon also benefits from this arrangement as it can produce innovative games that resonate with niche audiences.<\/span><\/p>\n

However, this strategy has broader implications for truly independent developers. As large companies like Nexon enter the indie space, smaller developers could find it increasingly difficult to compete for visibility and resources in an already crowded market.<\/span><\/p>\n

The South Korean government launched new <\/span>initiatives<\/span><\/a> in May to support indie game developers by providing financial backing, mentorship and access to international markets. However, it remains to be seen whether this type of government support will be sufficient to ensure that indie game developers can remain competitive amid the onslaught from larger corporations.\u00a0<\/span><\/p>\n

\"\"

A screenshot of Nexon’s “MapleStory” video game, Sept. 18, 2024 | Image: Korea Pro<\/em><\/p><\/div>\n

REGULATORY CHALLENGES<\/b><\/p>\n

As South Korea\u2019s gaming industry grows, developers face growing scrutiny over their monetization practices, particularly free-to-play games that rely on players to make in-game purchases via microtransactions to generate revenue.<\/span><\/p>\n

For instance, the Korea Fair Trade Commission (KFTC) <\/span>fined<\/span><\/a> Nexon about $8.7 million (11.6 billion won) in January for misleading practices in its game \u201cMapleStory.\u201d<\/span><\/p>\n

The fine stemmed from Nexon\u2019s manipulation of the probability of players obtaining rare in-game items through \u201ccubes\u201d \u2014 a form of paid item that allows players to upgrade their game characters \u2014 without informing players.<\/span><\/p>\n

The KFTC considered this a violation of the country\u2019s <\/span>Act on Consumer Protection in Electronic Commerce<\/span><\/a>, leading to what the commission described as \u201cdeceptive practices.\u201d Nexon had reportedly generated around $415 million (550 billion won) from these sales from 2010 to 2021.\u200b<\/span><\/p>\n

The fine was small relative to the company\u2019s earnings, serving more as a symbolic act rather than a significant legal deterrent. However, as South Korean game developers increasingly look overseas to expand their earnings, they will need to contend with global norms and practices.<\/span><\/p>\n

Moreover, while it may take time for the South Korean government to update its relevant laws to better regulate video game companies, those that fail to prioritize consumer trust will increasingly face tech-savvy players who will question their trustworthiness.<\/span><\/p>\n

Developers who fail to prioritize consumer trust risk not only legal penalties but also long-term damage to their brand reputation.<\/span><\/p>\n

UNCHARTED COURSE<\/b><\/p>\n

As the mobile gaming sector continues to decline, major players like Nexon will likely continue investing heavily in console and PC game development.<\/span><\/p>\n

However, given that this means that they will have to face increasing competition with Chinese and deeply entrenched Japanese and Western firms, South Korean developers will need to innovate continuously, including investing in professional translation and localization services, while expanding partnerships to secure their foothold in these larger markets.<\/span><\/p>\n

Game developers will also likely reevaluate their business models as console game development requires higher investment and longer production times than mobile games.<\/span><\/p>\n

South Korea\u2019s gaming industry is entering a new era of growth and challenge. Although it has carved a niche in a market that foreign companies have found challenging to penetrate without partnering with a local firm, it remains to be seen whether it can emulate that success in an increasingly crowded global market.<\/span><\/p>\n

Edited by Alannah Hill<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Domestic Politics<\/span><\/a>Technology & Cyber<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

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