April 9th, 2007 Jun Sok Huhh
Internet and online gaming is one of industrial area that Korea has a strong competitive edge. It is natural that the companies could also do well outside their motherland, because they had much secret know-how in many respects. But the truth seems to be somewhat different.
Following table shows financial performances of Korean Internet/online gaming companies. As you can see, in spite of big investment for overseas markets, most of companies didn’t get satisfactory results yet.
Overseas Performances of some major Korean Internet/online-game companies in FY2006
(unit: 1,000 KRW, () means net loss)
Some caveats
1. Original source in Korean is from here.
2. Data were taken from financial reports and business reports of individual companies.
3. Data of Nexon was not obtainable, because Nexon Korea has no obligation to submit the actual results of the parent company, Nexon Japan to the Financial Supervisory Service of Korea.
What made the results? One easy answer might be cultural differences among regions where services/games are being provided. This, however, cannot be fully explanatory in that the performances in regions with similar cultural background were not so good, either.
Another is the faster catch-up of foreign competitors than expected. What was once thought to be a big secret is a common sense of the business at now. A worldwide success of Blizzard is only the beginning of a huge following-up wave. Competitive edge that Korean companies have enjoyed is definitely waning out.
Anyway, is there any strategic failure in globalizing business at Korean side? For last few years, companies have been high for their spectacular successes. The obvious thing is that domestic market is not enough to support stable growth for all. So to speak, There is a symptom of saturation in Korean markets. The lag of Webzen, once one of champions at Korean online gaming, is just a part of the story. It might be time to wake up not to be left behind.
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