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1 www.kocca.kr 2010 White Paper on Korean Games 1) Market Scale The total value of the Korean game market reached 6.58 trillion won in 2009. This accounts for a 17.4% increase from the previous year, and proves that the Korean game market has returned to its normal level since its heavy fall in 2007. The Korean game market was in its prime in 2005, when its scale was 8.68 trillion won, but it regressed two years in a row in 2006 and 2007 to 5.14 trillion won. In 2008, however, it grew by 9.0%
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  1 www. kocca .kr 2010 White Paper on Korean Games1) Market Scale The total value of the Korean game marketreached 6.58 trillion won in 2009. This accounts for a17.4% increase from the previous year, and provesthat the Korean game market has returned to itsnormal level since its heavy fall in 2007. The Koreangame market was in its prime in 2005, when itsscale was 8.68 trillion won, but it regressed twoyears in a row in 2006 and 2007 to 5.14 trillion won. In2008, however, it grew by 9.0% from the year before;and having reached again the 6 trillion won mark in2009, continuous developments are expected.An examination of each of the different fields ofthe market showed that the online game marketrecorded a 56.4% market share as it reached3.71 trillion won. This is the first time anindividual platform has taken up more than 50%of the total game market, which includes gamedistribution and retail companies. The marketshare of online games in the platform unit gamemarket, excluding PC rooms and arcade centers,is 81.1%. The online game market is expected tocontinue to lead the Korean game market basedon the domestic market, which has a stableinfrastructure and is making inroads into theglobal market. PC rooms, which are a consumer market foronline games, came in at second place with a valueof 1.93 trillion won and a 29.4% market share. Thegrowth rate of PC rooms from the year before isonly 0.3%, however, and its momentum for growthis stagnant. Video games have the third largestmarket share. Their figures do not come close tothose of online games or PC rooms, but their totalsales amount to 525.7 billion won for a marketshare of 8.0%, and sales of mobile games amountto 260.8 billion won for a market share of 4.0%. This study calculated only the pure revenue ofmobile developers to determine mobile gameprofits, without the data communication charge ofmobile communication companies. Therefore, thesales of mobile games has decreased by 14.5%from the year before in 2009, but it would be rationalto say that their market is continuing to grow.Sales of arcade games are 61.8 billion won fora market share of 0.9%, and sales of arcadegame rooms and video game rooms are 74.4 1. Industry Trends  3 www. kocca .kr 2010 White Paper on Korean Games GuidetoKoreanGamesIndustryandCulture 2 Industry Trends billion won each, for a market share of 1.1%each. The arcade game room market had thehighest market share in its prime in 2005 and2006, but has been in a crisis situation since BadaIyagi (‘Sea Story’, a chain of video gamblingrooms) emerged as a problem in 2007. The salesof PC games are 15 billion won, which gives thema market share of 0.2%. They have little chanceof future growth and a high chance of beingabsorbed by the online game market due to theexpansion of online sales and distribution.In 2010, the Korean game market is predictedto record a market scale of 7.78 trillion won for agrowth rate of 18.3% from 2009. The online gamemarket is expected to grow by 28% from the yearbefore, and in fact, all markets, excluding the PCgame market, are expected to show somegrowth. This growth trend is expected to continuethrough 2011 and 2012. The predictions for 2011are a market scale of 9.82 trillion won and a16.7% growth, and the predictions for 2012 are amarket scale of 10.82 trillion won and a 19.2%growth. In 2012, the Korean game market willfinally enter the era of 10 trillion won in sales. 2) Import and Export Situation In 2009, Korean game companies exported atotal of around 1.24 billion US dollars (1.58 trillionwon, Foreign Exchange Bank 2009 annual averagesales standard of 1,276.40 index). This accountedfor a 13.6% growth from the year before. Importsdropped from the year before by 14.1%, for a totalof 332.25 million dollars (424.1 billion won).By platform, online games accounted for97.6% of the total games export amount, with atotal of 1.21 billion dollars. Imports increased by2.2% from the year before to reach 12.9% and42.96 million dollars. The opposite was the casefor video games, with 269.8 million dollars worthimported for an 81.2% share of the total gamesimport amount. The export amount of videogames was only 0.3% of the total export amount,at 4.01 million dollars.The export scale of the Korean game industry isexpected to continue to grow in 2010. Continuousefforts are being made to advance the industryinto the global online game market, and exportstrategies are also being adopted for arcadegames and mobile games that consider theregional characteristics of Asia, the Americas,and Europe. Imports are expected to increase byaround 15% in 2010, unlike their regression of14.1% in 2009. Imports of Starcraft 2 started in thesecond half of 2010, and the import amount ofvideo games is expected to increase because ofthe release of new devices and controllers. Sales of Korean games in 2009 recorded a 3.1%share (3.6 billion dollars) of the international gamemarket (117.4 billion dollars). This is 0.2% lowerthan the 3.3% figure recorded in 2008, and confirms < Figure-2 > Weights of different fields of the Korean game market in 2009 (unit: 100 million won) < Table-1 > Scale and future prospects of the Korean game market Category200820092010 (E)2011 (E)2012 (E)SalesSalesGrowth rateSalesGrowth rateSalesGrowth rateSalesGrowth rateOnline games 26,92237,087 37.8% 47,471 28.0% 56,965 20.0% 71,206 25.0% Video games 5,021 5,257 4.7% 5,657 7.6% 6,760 19.5% 7,510 11.1% Mobile games* 3,050 2,608 -14.5% 2,759 5.8% 3,090 12.0% 3,554 15.0% PC games 263 150 -43.0% 135 -10.0% 128 -5.0% 119 -7.0% Arcade games 628 618 -1.6% 649 5.0% 711 9.5% 793 11.5% PC rooms 19,280 19,342 0.3% 20,406 5.5% 22,345 9.5% 24,133 8.0% Arcade game rooms** 696 744 -15.7% 760 2.2% 817 7.5% 895 9.5% Video game rooms 187 Total 56,047 65,806 17.4% 77,837 18.3% 90,816 16.7% 108,210 19.2% * The mobile game sales amount until 2008was calculated with the inclusion ofthe data communication charge, and focused only on pure data charges for the purchaseand playing ofgames from 2009.** The sales amount ofarcade game rooms since 2009includes both arcade game rooms and video game rooms. Therefore, the growthrate in 2009was calculated bycomparing the sales amount ofarcade game rooms and video game rooms combined in 2008(88.3billion won) with the 2009sales amount. < Figure-1 > Total scale and growth rate trends of the Korean game market (2002~2009) (unit: 100 million won)  GuidetoKoreanGamesIndustryandCulture 4 Industry Trends that the international game market developedfaster than the Korean game market in 2009.Considering, however, the future growth trends ofthe international and Korean markets, the share ofthe Korean market is expected to graduallyincrease to 3.6% in 2010 and to 4.0% in 2011. Online games especially take up 23.0% of theinternational market, proving that Korea is thenumber two online game power country in theworld, after China (31.3%). The Korean onlinegame market once boasted of a number oneranking, but it has been at second place since2008, when the Chinese online game marketshowed explosive growth.Korea exported the most games (exportamount standard) to China in 2009, at 34.9%, andthen to Japan at 26.5%, the United States at12.3%, Taiwan at 8.3%, Europe at 9.2%, andSoutheast Asia at 6.7%. In 2008, China beat Japanas the largest export country of the Korean gameindustry; and in 2009, it maintained its numberone position with a mid-30% market share.The export market of Japan fell behind China,but it increased by 5.7% from the year before torecord a market share of 26.5%, which madeChina and Japan the two major markets ofKorean game exports. In 2009, exports of Koreangames to the two countries did well and took upmore than 60% of Korea’s total export market,but the weight of the United States and Taiwanmarkets fell by around 4% each. 3) Situation of Game Companies and Game-Related Workers At the end of December 2009, there were 5,111Korean game production/distribution companiesthat were registered with cities and dos (Koreanprovinces) throughout Korea. Of these, 71.7% or3,666 were production companies, and 28.3% or1,445 were listed as distribution companies. Bothproduction and distribution companies appeared tobe increasing. These figures, however, includerepetition of companies that do both productionand distribution, and those that are taking time offor have folded up. The number of game companieswith normal operations was estimated to havebeen 1,546 at the end of June 2010.Research found that there were 21,547 PCrooms in Korea in 2009. This is 51 more than the21,496 in 2008. The number of arcade gamerooms notably dropped by around 60% from10,182 in 2007 to 3,224 in 2008, but 653 moreappeared in 2009 for a total of 3,877 registeredarcade game rooms.The number of people working in the gameindustry in 2009 was 43,365. This accounted for anincrease of 635 from the 42,730 counted the yearbefore, and is deemed to be because the marketgrew in 2009. In addition, the average number ofworkers per company in 2008, which was 25.4,rose by 2.6 to 28.0 in 2009. The active mergersand acquisitions (M&As) of large and medium- 5 www. kocca .kr 2010 White Paper on Korean Games (unit: 1,000 dollars) < Table-2 > Import and export situation and future prospects of the Korean game industry Category200220032004200520062007200820092010 (E) ExportExport amount 140,796 172,743 387,692 564,660 671,994 781,004 1,093,865 1,240,856 1,551,070 Growth rate 7.9% 22.7% 124.4% 45.6% 19.0% 16.2% 40.1% 13.4% 25.0% ImportImport amount 160,962 166,454 205,108 232,923 207,556 389,549 386,920 332,250 382,087 Growth rate 146.3% 3.4% 23.2% 13.6% -10.9% 87.7% -0.67% -14.1% 15.0% < Figure-3 > Export/import scale of Korean game platforms in 2009 (unit: 1,000 dollars) < Figure-4 > Weight of Korean game exports per country/region in 2009 (export amount standard) (unit: %) (unit:1milliondollars) < Table-3 > Weight of the Korean game market in the international game market in 2009 (sales amount standard) CategoryOnline GamesVideo GamesMobile GamesPC GamesArcade GamesTotal International game market 12,642 66,360 7,279 3,233 27,858 117,372 Korean game market 2,906 411 204 12 107 3,640 Market share 23.0% 0.6% 2.8% 0.4% 0.4% 3.1%  7 www. kocca .kr 2010 White Paper on Korean Games MOU was signed, the first exchange at a policylevel, for the Joint Operations Committee, was heldin Changzhou, China in June 2009. Changzhou isthe region that China selected as the base of gameindustry professionals, and the Committeemeeting was held in the city because theCommittee’s first project was to train professionalhuman resources. A separate MOU regardingtraining of human resources was signed. The game market structures of Korea andChina are similar, and therefore, their policyissues are also very similar. One of these issuesis the problem of overuse of games. Therefore,the policy exchange of the two countries startedwith their sharing of how they approached theproblem of overuse of games and introducedrelated policies. During the Joint OperationsCommittee, the two countries discussed whatthey had each pursued through a joint seminar.Another joint project that was pursued in 2009was the Korea-China Game Culture Festival. Thefestival was launched because both countriesneeded to improve negative awareness of gamesand stress that playing of games is an importantindustrial and cultural activity. This event washeld during the “Digi China” period in Beijing inDecember 2009.Efforts by Korea and China to develop thegame industry and culture are expressedtangibly in the form of joint projects, but jointprojects are not the sole goal of the twocountries’ cooperation. Another purpose of theircooperation is to fundamentally contribute totheir market activation through continuous policyexchange and discussions. The importance ofpolicy exchange is gradually increasing, and in2009, various opinions related to online gamecontents evaluation and to the online gamecontents business were presented. Such topicscan directly influence the advance of Koreangame companies into the Chinese market, soclear understanding of the facts is important. The importance of the games-related Korea-China MOU was therefore emphasized, and eachtime related topics came up, the Korean MCSTwas able to gain understanding of such topicsthrough the Chinese Ministry of Culture. TheChinese Ministry of Culture explained the futurepolicy directions of the Chinese game industry tothe MCST. It must be kept in mind thatcooperation for the cultural development of theKorean and Chinese game industries is a coreissue of policy exchange, and that joint projectsare results of the exchanges. 3) Resurfacing of the Problem ofSpeculative Actions through Web-basedBoard Games Speculative actions using games have beenpresented as a social issue from the early stages GuidetoKoreanGamesIndustryandCulture 6 Policy Trends sized companies in 2009 appear to have led to anincrease in the average number of workers percompany. The proportion of workers according totype of duty increased for graphic designers, H/Wdevelopers, general managers, and qualityadministration (QA) and customer service (CS)personnel; but the proportion of game producers,planners, and computer programmersdecreased. This shows that a higher need formanagement surfaced as game companies grewin 2009 after active M&As by large publishers, andthat game companies’ appreciation of customerservice improved.The general growth trend in the number ofgame industry workers and the average numberof workers per company continuously increaseduntil 2005; and after the Bada Iyagi incident in2006, the arcade game industry declined and thenumber of workers in the industry decreased.The total number of game industry workers,however, has been increasing again since 2007. 2. Policy Trends 1) Establishment and Operation of a GlobalGame Hub Center In December 2008, the Ministry of Culture, Sports& Tourism (hereafter MCST) announced its “Mid- toLong-term Game Industry Plan: The SecondRevolution.” In 2009, an important policy projectwas pursued based on this plan. The mid- to long-term plan sets the basic direction of the policyproject for around five years, and consists of thefirst comprehensive plan in 2003 and the secondcomprehensive plan in 2008. The “establishment ofa global game hub center” can be seen as a policyproject that reveals the future market-orientedcharacteristics of the second mid- to long-termplan. The project basically started in 2009. This project aims to define a rather abstract andcomprehensive idea and range called “future-typegame contents” and to construct a road map thatmust be consistently followed. In addition, sincethere is a higher need for the game industry not tosimply develop game contents but also to combinewith various other industrial fields, it plays the roleof creating an environment where global playersin Korea and around the world can cooperate atmany levels. The Korean game industry canbecome very influential according to the globalgame hub center policy effects, so creating athorough road map is an important starting point. 2) Pursuing Korea-China Game IndustryCooperation Cooperation between the Korean and Chinesegame industries basically started in 2009. After the
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