Frequent M&A Change Market Shares in South Korea’s Online Game Industry

Another very interesting read.

An MMOsite article

Large-scale game makers’ frequent merger and acquisition activities are changing the market shares in South Korea’s online game industry. After four well-known acquisitions, Nexon has reinforced its leadership in South Korea’s online game industry, leaving other competitors far behind, while at the same time, NHN and CJ E&M are gradually being kicked out. The R&D power of large enterprises and the deepening of the online game market have attracted wide attention aroused the great attention of many industry insiders.

Upcoming Mabinogi 2

During this merger and acquisition wave, Nexon really showed its mightiness. Many South Korean developers, including Wizet, Neople, Ndoors, Gamehi and JCE were taken over by Nexon, as a direct result of which 8 hot-selling games in South Korea, including Maplestory, Dungeon Fighter Online, Atlantica Online, Sudden Attack, Free Style, FreeStyle Football, Free Style 2 and Cyphers, joined Nexon’s lineup.

Cyphers (Nexon)

Achieving a 1.2 trillion won sales volume in 2011, Nexon became the first South Korea-based online game company with an annual sales volume of over one trillion won. And with its latest acquisition, in which Nexon took JCE under its control as the largest shareholder, Nexon’s sales volume in 2012 is expected to reach 1.5 trillion won.

Ghosts 'n Goblins Online screenshot

Ghosts 'n Goblins Online (CJ E&M)

CJ E&M which had been lagging behind in the leading publishers group, finally “woke up” since last year. They acquired their long-term partner Ani-Park, the developer of MaguMagu, to ensure its stable service. However, they also got poached by Nexon and lost the publishing right of Sudden Attack Online to Nexon, which dealt a big blow to the company.

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Sudden Attack screenshot

Sudden Attack (Nexon)

 

CJ E&M achieved a sales volume of 257.6 billion won in 2011 and their situation will probably get worse when they hand over Sudden Attack Online to Nexon in 2013. In 2006, Nexon’s annual sales volume was only twice of CJ E&MC‘s. But after 5 years, the gap between the two companies has been enlarged five times. If RiftCJ E&M‘s latest painstaking effort, fails to make a success, the gap will be further enlarged.

rift

Rift (CJ E&M)

While Nexon embarked on an acquisition spree and CJ E&M faces an uncertain future, super large enterprises like NCsoft and NHN are also involved in the acquisition wave. Both of them have long cast a covetous eye on Wemade and other small developers. However, it seems like Wemade has no interest in becoming someone else’s appendant. Recently they acquired Silkroad Online‘s developer Joy-Max, which had acquired IO Entertainment. It’s a clear sign that they are determined to forge their own path.

Silkroad Online screenshot

Silkroad Online (WeMade Entertainment)

According to South Korean media, a couple of years ago, Wemade lost to China-based Shanda in the competition for acquiring Dragon Nest‘s developer Eyedentity Games, which didn’t set them back, but instead intensified their acquisition and expansion determination. After successfully acquiring WiseCat, NHN started to try taking over JCE as its co-publisher. However, it turned out they were not even close to competing with Nexon.

Dragon Nest

Dragon Nest (Nexon)

In order to include some sports MMO titles in its lineup, Nexon guided Gamehi, one of its subsidiaries to acquire OnNet, the developer of Golf-theme MMO Shot OnlineNCsoft, on the other hand, finally bought Ntreev and successfully tapped into the casual MMO market after 6 months of long and hard talk. According to some insider, NCsoft has been irritated by the fact that Nexon had left them out of the casual MMO market during last two years and the current sales volume of Nexon in this market is about twice as much as theirs.

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Aion truly free

Aion (NCSoft)

Some analysts argued that compared with acquiring famous or emerging MMO-related companies, it is usually a lot easier to buy matched ones, which sometimes really give unexpected surprises. And that is what Nexon exactly did to expand its business.

The on-going merger and acquisition wave also brought a major problem to South Korea’s MMO industry: it has become more and more difficult for small and medium-sized enterprises to survive in South Korea, which may make the industry less dynamic than it used to be.

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Posted on February 24, 2012, in General Gaming, Korean Gaming. Bookmark the permalink. 18 Comments.

  1. Silkroad, Cypher and GOblin n ghosts ALL LOOK COOL 🙂
    But then again, I have been fooled before .. ALOT -,-
    (stupid games with stupid to good to be true pictures, showing the game as full 3D, but it is only a 64 bit -ish game

  2. On a completly NON-post related subject (just posting this because I am crazy)
    WOOOOO finaly got a reply from the big boss at Guerilla games (Killzone 3). He told me what a good study would be for Game Design in the Netherlands. Yay now I have full confirmation on what a good study would be (good enough) to get a job at Nexon :p
    Thanks Arjan!

    RobbinisHappy :p

    • Oh cool. It’s good that you got someone who studied in the same country as you do to help you :). Well I assume he studied in the Netherlands.

      • yeah, guerilla games (from Killzone) are based in the Netherlands. They are a full Dutch (netherlands) company

        • But that doesn’t mean that the workers are Dutch, especially since Guerilla is a subsidiary of Sony. -Points to the CEOs of almost all Nexon subsidiaries being Korean-.

          • yeah.. You might be right here, but I don’t know much about their employees or anything like that. I noticed they were a dutch company that made a big game, so I thought … why not…
            Looked on their website and searched up some of their employees on facebook.
            -stalkstalk-
            Could only find the CEO so I was like, okay. Messaged him and he replied (in 1 month but whatever, HE REPLIED 🙂 )
            I asked him “I know you aren’t a game designer, but could you maybe look at what the game designers that work for you did for study, and where, because I asume you know where they studied when you hired them.”

            The thing that suprised me the most was that he actualy replied, like .. he naswered me. He didn’t just ignore me what other big people tend to do :p

            • Actually a lot of head people at development studios would usually answer if you needed help and gave them time. It’s the big huge publishers that make 0t93697276296701791769749769769479602469247694 billion dollars a year that don’t care about you.

              • yeah … sad thing is, even some random people have that attitude. One thing that also suprised me while visiting your blog, is that you actualy responded to my first comment (maybe I expressed that in my comment :p) lol
                For some reason, Hime never replies on twitter, but then again, with 200000000000000000 hate tweets from little kids, and her almost only answering to her 4 maple friends, like that pizza dude …. yeah … ooh well, I asume she is busy 😉

                • Well that’s a whole other situation. I see her respond to tweets other than those from the regular MS tweeters but it’s not very often. She’s probably very busy and I know that there are way too many tweets to respond to them all.

  3. yeah, that’s why I don’t blame Hime, I like her for talking to the community every once in a while.

    Now … about Game Designer…. (again .. srry :p)
    I read a tweet from DavidVonDerHaar the other day, and he replied to someone talking about that he was learning about C+++ in high school. David replied with “it is a good thing to learn about the basics of Game Design”..
    But I always thought game designers were just coming up with ideas.
    Or is game designers just a BIG word, mnuch like the word Devs. Like, everyone working on the game is a game designer, but you have Game Designer – Artists (you and Orange), Game Designer – programmer, and Game Designer – person that comes with new ideas….
    or am I completely wrong here ..

    You said that game designers dont need to know about C+++ (not required), because they typ more than they code, but David (Game Design Director at Treyarch) said the complete opposite :p

    haha srry for asking this again xD

    • Robbin for the billionth time you don’t need to apologize -F3-. I like talking about these stuff.

      Nah, it’s not required. But like the ability to draw well, knowing how to code helps, especially when it comes to expressing your ideas. It’s one of the lines I always say when people ask me about game design: “Sometimes words just aren’t enough to express you idea, a sketch may help”. Coding is a similar situation. It’s not required to be a great drawer, as my cousin was a game designer for a short time also and isn’t nearly a good drawer. Plus, sometimes just using words and typing walls of texts gets boring and drawing or coding may be more fun in some cases.

      But in your studying on game design it’s possible that you’ll encounter and learn basic programming like C++ without details but that really depends on how your university decides to cover the course. But trust me, programming languages are like speaking languages, just spend a month or two studying the basics and the laws and you’ll lean the basics, even if you can’t do anything super special with them.

      Does that make sense? O_O Because I’m kinda confusing myself. Tell me if you need clarification on anything.

      Edit: Oh and another thing is that knowing the basics of programming, especially the programming languages used to build the game that you’re working on (C++ in MapleStory’s case, Java in RuneScape’s case, etc.) it’ll help you design designs which are plausible and not terribly hard to program. You will understand that limitations of the programming language which will prevent you from spending time to design something that can’t be programmed or making you have to go back and change lots of stuff in order for it to be programmed. Also, knowing the basics of the language will help you understand what’s most economical in terms of money and time so you model your designs to take less time and money while still being just as effective. But all of this can really be solved by working together with someone who is knowledgeable on programming such as a programmer on the dev. team.

      Think of it this way:
      Words will help you tell your designs, which is most important. But images and programs will help you show your designs which can be very effective in some cases.

      Edit 2: And having knowledge of coding will help you help the programmers to understand and even implement the designs. Adding a block of pseudocode or C++ program to your design will help a programmer understand and help the programmer take your design from a bunch of words into code and then into the game. But don’t worry, once you’re a good drawer and can explain and describe in detail (which from your comments on my blog, I think you can) any programmer should be able to fully understand and form a picture of your design without the need for this.

      • 1. Yes I understood almost everything you said. I understand that when I have an idea in my head, coding knowledge is needed to know if it is possible to be put in the game. Because I have no idea of coding right now, I will use this example. If maplestory was a round vase (using C+++) and games like Runescape were a square vase (Java), then it would be impossible to put something square in the round Maplestory vase, because the coding doesn’t allow it, so thinking of it and working it out would be a waste of time… did I do that right ?

        2.Can’t wait, now I want to work at Nexon or any other company even more! I am so exited wright now =D

        3. Woah, alot of your famliy member are in the gaming industry. You, Orange, your cousin (sorry don’t know your name :p) Bud…. or something o.o nah …. oooj well, I tried to remember :p

        4. I like your new profile picutre.

        5. This must have been one of the largest walls of text your have writen to me in a comment.

        6. *tries to make an even bigger wall*

        …..

        • 1. Not exactly, but basically. Usually what can be implemented in one programming language can be written in a different way and implemented in another language. so whatever you design can be implemented in whatever language the game is written in. But some languages are less powerful than others which means that there are some designs that you may create which one programming language can implement, but a less powerful one can’t implement.

          3. Just the three of us :P. But I guess that is quite a lot by regular standards.

          4. Thanks :D.

          5. It possibly is.

          6. Didn’t work.

          • 1. what do you mean by “powerfull”?

            3. … 3 people is ALOT… PLUS you all moved to the USA. I am starting to believe that you all made plan when you were young “yeah, lets move to the USA and work in the gaming industry, and then I will make a blog about a 2D game, and talk to a super cool dude that is one of the few people to post comment”…. lol just kidding ofcourse xDD

            4. no problem

            5. k

            6 Darn it!

            • 1. Newer and better developed programming languages may have more features available and have the ability to be used to apply things that other languages can’t.

              3. He always lived in Vancouver. But yeah me, Orange and some of our friends all planned to move to LA years before we actually moved there. We wanted to go even more after Orange went and told us how great it is.

              • Let me tell you something. Before I came to this blog, I thought about being either a Architect, Film Director or a Journalist….. Then I read all this amazing stuff about Nexon and i wanted to work in the gaming industry…..
                Seems like I need something to get my creativity flowing.
                Then, when I heard that you moved to the US, you and your bro inspired me to do the same thing. And when I heard you both worked in the gaming industry, I got inspired even more. I am not lieing, you guys played a BIG, BIG part in who I am right now, future job/study wise…… Thanks :p

                Also, what do you mean with ,features not available that other languages don’t have… I don’t fully understand. Do you mean it like… (fictional exmaple), Java can have up to 10 lines of coding like : “(((A+B)*(C-D)) = (Delta^E*0.5)*(PlayerIP))
                While C+++ can hold alot more lines making it easier to code?
                Like… Java is a old calculator device with only 3 digits fitting, while C+++ has 10 digits than can fit on it … something like that, something to make the coding easier and more organized?

                • Good to hear that I can influence you that much!

                  Your example was interesting, but not exactly xD. There are just things that you can do in one language that you can’t do in others. Things that can’t be implemented or developed in some languages but can be in others.

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