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Korean online game portals report record-breaking sales in 2008

At the beginning of February, South Korean news reports said, nevertheless the global recession, Korean online game portals announced that their yearly sales were highest ever in the South Korean game market in 2008. While all most all big game publishers in the global game industry including EA, Activision-Blizzard, THQ, SCE, MS are facing a huge amount of loss and planning large-scale layoffs, South Korean online game portals including Neowiz Games, CJ Internet, Hangame are celebrating their incredibly successful sales records.

Neowiz Games which runs an online game portal site called PMang reported their sales during the 4th quarter in last year neared 50 million dollars with a profit of 8.6 million dollars. Compared to the sales in the 4th quarter in 2007, it increased by 58 percent. The profit increased by 100 %. It is their biggest profit and sales ever. All of their games in their online game portal PMang are free-to-play online games including Special force, FIFA Online and NBA Street Online Special Force is the first FPS game adopting a micro-transaction model. FIFA Online and NBA Street Online are sports games co-developed with EA Asia studio. Actually, Neowiz Games became one of the most important partners of EA after the success of micro-transaction model in EA’s licensing games like FIFA Online. Neowiz Games is helping EA realize their dream, dominating the Asian online market. FIFA Online has been super-successful in Korea and China.
CJ Internet also reported their sales and profits records at the almost same time as Neowiz Games. Their sales record during the 4th quarter in last year was 52 million dollars with a profit of 14.5 million dollars. Compared to the sales in the 3rd quarter in 2008, it increased by 17 percent. The profit increased by 11 %. Their yearly sales record in 2008 was 190 million dollars and their yearly profit in 2008 was 55 million dollars. Currently, their online game portal Netmarble has the most popular game in South Korea called Sudden Attack, which is a FPS game having item-selling based micro-transacton model.
NHN which runs the biggest online game portal Hangame also reported incredible sales record in 2008. Their yearly sales record in last year was 360 million. Their yearly sales increased by 51 percent since 2007. Various games are in service in Hangame ranging from casual puzzles to MMO RPGs. However, their revenue mostly comes from casual board games including some casino games. In those games, players spend lots of money to buy numerous in-game items continually.
When it comes to the factors of the success of Korean online game portals last year, two things should be mentioned: Fully mature online game market environment, established micro-transaction models. For the past 8 years, Korean online game portals have made hard efforts to cultivate the market and user communities. Recently, their efforts have started to pay off. Now that each of them has tens of millions of subscribers, they easily make money from the huge amount of users having high loyalty. Actually, they don’t even need to spend money for marketing their new games. When they release a new game, their game users give the word to spread the information of the game each other in their own community. That is much better way to advertise their games than TV commercials or any other promotional methods. In order to intensify this process, the online game portals are focusing on community raising game play or social game play early on the concept design stage of a game project. Also, almost all games in service in the online game portal websites are free-to-play games. So, their only revenue comes from item-selling micro-transaction model. For more than 7 years, they have designed, tested and revised various effective micro-transaction models. Finally, they have just found optimal micro-transaction models not messing the game balance. In addition, they have surely found the method to make micro-transactional games not frustrating any user, even users who don’t spend a penny for in-game items.
In the point of view from the global game industry, these incredible results of Korean online game portals in 2008 show free-to-play online games adopting micro-transaction models could be a promising breakthrough for this dismal situations caused by the terrible global recession.

Great post

Really good to get hard data from Korea, keep up the good work!