The Game Market in Korea

With an ideal infrastructure Korea is the world’s most advanced game market!

This report looks at the game market in Korea which is forecasted to grow to $5 billion by 2016. Included are historical analysis, key trends, company profiles and forecasts for PC online games in Korea by business model.

This report is based on a review of historical trends and opinions of leading members of the video game industry, including analysts, consultants, developers, publishers, retailers and consumers. This report has been prepared by utilizing a variety of primary and secondary research techniques including: telephone and personal interviews; analysis of market surveys, trade journals and company literature; extensive database searches; and DFC Intelligence’s original compilations and analysis.

A DFC Intelligence report is more than a collection of raw statistics. We carefully scrutinize and analyze data from a variety of sources. The result is a comprehensive overview that puts facts and figures in context. Anyone who has attempted to collect figures for the online game industry knows that is difficult to obtain accurate statistics. We have studied market surveys, investment analyst reports and other sources of industry information. Our statistics and forecasts are based on the careful analysis of the available research, a great deal of which is contradictory. In many cases, we made assumptions based on the best available information. We feel our figures accurately reflect past and future market conditions. At the very least, these numbers track the industry trends and accurately estimate the market share of the various players.

Korea is one of the most advanced PC online gaming markets in the world thanks to savvy Internet users and infrastructure – broadband, payment solutions, and security to name a few. It is important to understand the Korea market because trends in Korea are starting to go global and impact all global game markets.

In this report, DFC Intelligence aggregates actual revenue of PC and online game publishers in Korea from 2006 to 2011 and a five-year estimated forecast from 2012 to 2016.

I. INTRODUCTION
II. EXECUTIVE SUMMARY
III. ONLY IN KOREA
A. 1. PC BANG
B. INTERNET ENVIRONMENT
C. SECONDARY MARKET IN KOREA
IV. MARKET OVERVIEW
A. MARKET HISTORY
1. Year 1994: Multi-User Dungeon (MUD)
2. Year 1996: 2D Games
3. Year 2000: Casual Games
4. Year 2001: Full 3D Games
5. Beyond 2001: Emergence of Large Publishers and Concerns over the Negative Impact of Games .
B. CURRENT MARKET
1. Revenue Source Definition
2. Korean PC Online Game Market 2012
C. KEY FINDINGS
1. Alternative Games: Social Networks, Browser Games and Mobile Games
2. Social Network Games Explode
3. M&A Frenzy
4. No more Made-in-Korea Only
5. More Revenue from Paying Users
6. Unfavorable Government Policy
V. MARKET FORECAST
A. OVERALL MARKET FORECAST
B. REVENUE FORECAST BY DISTRIBUTION PLATFORM: CLIENT BASED, BROWSER BASED, SOCIAL NETWORK/APPLICATION BASED
VI. COMPANY PROFILE
A. ACTOZ SOFT
B. CCR
C. CJ E&M (FORMERLY CJ INTERNET)
D. GRAVITY CORP
E. HANBITSOFT
F. JC ENTERTAINMENT
G. LIVEPLEX
H. MGAME
I. NCSOFT
J. NDOORS
K. NEOWIZ GAMES/PMANG
L. NEXON
M. NHN/HANGAME
N. NOWCOM
I. INTRODUCTION
II. EXECUTIVE SUMMARY
III. ONLY IN KOREA
A. 1. PC BANG
B. INTERNET ENVIRONMENT
C. SECONDARY MARKET IN KOREA
IV. MARKET OVERVIEW
A. MARKET HISTORY
1. Year 1994: Multi-User Dungeon (MUD)
2. Year 1996: 2D Games
3. Year 2000: Casual Games
4. Year 2001: Full 3D Games
5. Beyond 2001: Emergence of Large Publishers and Concerns over the Negative Impact of Games .
B. CURRENT MARKET
1. Revenue Source Definition
2. Korean PC Online Game Market 2012
C. KEY FINDINGS
1. Alternative Games: Social Networks, Browser Games and Mobile Games
2. Social Network Games Explode
3. M&A Frenzy
4. No more Made-in-Korea Only
5. More Revenue from Paying Users
6. Unfavorable Government Policy
V. MARKET FORECAST
A. OVERALL MARKET FORECAST
B. REVENUE FORECAST BY DISTRIBUTION PLATFORM: CLIENT BASED, BROWSER BASED, SOCIAL NETWORK/APPLICATION BASED
VI. COMPANY PROFILE
A. ACTOZ SOFT
B. CCR
C. CJ E&M (FORMERLY CJ INTERNET)
D. GRAVITY CORP
E. HANBITSOFT
F. JC ENTERTAINMENT
G. LIVEPLEX
H. MGAME
I. NCSOFT
J. NDOORS
K. NEOWIZ GAMES/PMANG
L. NEXON
M. NHN/HANGAME
N. NOWCOM

Index of Tables
Table 1 Accumulated Registered PC Bangs in Korea 2005-2009
Table 2 Hypothetical Publisher Revenue Split in Korea
Table 3 Korea Broadband Speed Test Results
Table 4 Broadband Speed by Country
Table 5 Top ISPs in Korea by Speed
Table 6 Fastest Broadband Cities Worldwide
Table 7 Secondary Market Revenue from Item Trading by Vendor, 2008-2009
Table 8 Item Mania Transaction Volume 2002-2008
Table 9 Korea PC Online Game Publisher Revenue by Source, 2006-2011
Table 10 Korea PC Online Game Market Revenue, 2006-2011
Table 11 Korea PC Online Game Market Revenue by Region, 2006-2011
Table 12 Recent Korea Game M&A Activity
Table 13 Korea PC Online Game Market Revenue Forecast, 2012-2016
Table 14 Korea PC Online Game Market Revenue Forecast by Distribution Platform
Table 15 Actoz Soft Revenue and Income, 2006-2010
Table 16 Actoz Soft Revenue by Country and Product, 2009-2010
Table 17 Actoz Soft Revenue by Distribution Channel in 1H 2010
Table 18 CCR Revenue by Source, 2006-2010
Table 19 CJ Internet Revenue and Income: 2006-2010
Table 20 CJ Internet User Base
Table 21 Gravity Revenue and Income: 2006-2010
Table 22 Gravity Revenue by Source: 2006-2010
Table 23 Hanbitsoft Revenue and Income: 2006-2010
Table 24 JCE Revenue and Income: 2004-2010
Table 25 Joymax Revenue and Income: 2006-2010
Table 26 Mgame Revenue and Income: 2006-2010
Table 27 NCsoft Global Development and Publishing Networks
Table 28 NCsoft Revenue and Income: 2006-2010
Table 29 NCsoft Core Products
Table 30 NCsoft Subscription Structure in Korea
Table 31 NCsoft Subscription Structure for Lineage 1 & 2 in Oversea
Table 32 NCsoft Revenue and Expenses: 2006-2010
Table 33 Ndoors Revenue and Income: 2006-2010
Table 34 Neowiz Revenue and Income 2006-2010
Table 35 Neowiz Games Revenue and Income 2006-2010
Table 36 Nexon Revenue and Income: 2008-2011
Table 37 Kart Rider Business Model Features
Table 38 NHN Revenue and Income: 2006-2010
Table 39 Nowcom Revenue and Income: 2006-2010

Korea is an example of what happens when you give consumers access to games online. The rest of the world is just starting to catch up to Korea.
According to new research from DFC Intelligence, South Korea is the most advanced market in the world for online games. With the fastest broadband speeds and over 80% household broadband penetration, Korea continues to pioneer the business model for online games. DFC forecasts that the market for Korean games will grow at a CAGR of 9.7% from $2.7 billion in 2011 to nearly $5 billion by 2016. Most all of this revenue will come from consumers paying for online usage and buying virtual content.

“It is often thought that most games in Korea are played at Internet cafes, or PC Bangs,” said DFC analyst Insun Yoon. “While that is an important part of the market, most Korean publishers generate over 85% of revenue from consumers playing in the home.” Korea has the highest per capita spending on PC games in the world and according to Yoon similar growth is likely to occur in other markets as broadband to the home increases.

According to the report much of Korea’s market success can be attributed to a near optimal infrastructure including a national ID for authentication, diverse payment methods, low cost high speed broadband that has almost universal penetration, dedicated professional game player leagues, and cable channels dedicated to online games. Nevertheless the Korean market is not without its challenges. “There is a problem with market saturation and it now takes really innovative products to standout from the pack, says Ms. Yoon. In addition, games have received somewhat of a negative stigma. For example, in late 2011 the Korean government instituted a Shutdown Law that banned children from playing games after midnight.

Despite the challenges Korea is seen as a model for how game markets around the globe are likely to emerge as the global technology infrastructure starts to catch-up with the infrastructure in Korea. “Korea is an example of what happens when you give consumers access to games online,” says David Cole president of DFC Intelligence. “The rest of the world is just starting to catch-up to Korea.”

- ACTOZ SOFT
- CCR
- CJ E&M (FORMERLY CJ INTERNET)
- GRAVITY CORP
- HANBITSOFT
- JC ENTERTAINMENT
- LIVEPLEX
- MGAME
- NCSOFT
- NDOORS
- NEOWIZ GAMES/PMANG
- NEXON
- NHN/HANGAME
- NOWCOM

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