Status of Korean Game Industry

18.11.2013

Seogwon Hwang

Research Fellow at STEPI in Korea

Market Size

(100 Million KRW)

* 1 USD = 1063.5 KRW (15.11.2013)

Source: KOCCA, White Paper on Korean Games ( 2013), modified by the author

Ocean Story Scandal

Global Market Share

Global Market 111.8 BUSD

Korean Share 7.1 BUSD

6.3%

Source: created based on KOCCA’s White Paper on Korean Games ( 2013)

Market Segments

Online video

mobile

PC games

Arcade games

PC bang

arcades

Source: KOCCA, White Paper on Korean Games ( 2013), modified by the author

Exports and Imports

EX IM

EX: Exports, IM: Imports (1000 US$)

online video mobile arcade PC total

Very weak in console games

Source: KOCCA, White Paper on Korean Games ( 2013), modified by the author

Export Details

China

Japan

North America

South East Asia

Europe miscellaneous

Source: KOCCA, White Paper on Korean Games ( 2013), modified by the author

Number of Game Companies

1017

957

2011 2012

Source: created based on KOCCA’s White Paper on Korean Games ( 2013)

Number of Employees

2010 2011 2012 CAGR

Production and Publishing

48,585 51,859 52,466 3.90 %

PC Bang and Arcades

46,388 43,156 42,585 -4.20 %

Total 94,973 95,015 95,051 0.00 %

Source: KOCCA, White Paper on Korean Games ( 2013), modified by the author

Macro culture: Hot wind blowing in cold winter

• From online RPG to mobile ?

• Not that huge success story from start ups

• Successful game platforms based on messenger services

– Kakao, Line

• Politicians call Game as one of the four social evils (Drug, Alcohol, Gambling and Game)

• Conflict between the industry and politics which is supported by parents and medical doctors

Profitability = Sustainability

• Revenue: Power function of Ranking

in Market Places – Mean value low, median much

lower – Winner takes all

• Many success stories. But what about the whole ecosystem? – Still profitable for most of

'normally good talented' people?

– Common belief that every one can succeed. "Don't give up!" (One of the most common slogans in SLUSH13) But, really?

Daily Revenue (US$)

Appstore Ranking

Source: Hwang S. and Kim S. (2012), Profitability Analysis of Mobile Applications, presented at IT Service Conference in Seoul (in Korean)

𝐥𝐧 𝒚 = 𝟗. 𝟏 − 𝟏. 𝟏 𝐥𝐧𝒙

Open Platforms

• Openness and freedom for users

– Firms to seek locked-in users but users to seek freedom

• Tizen by Samsung and Intel

– Tizen might be another competing private platform if they succeed

• From de facto standards to de jure standards

– Policies need to do more to make users free

Thank You seogwon.hwang@gmail.com