Between 3rd and 11th of November, DonkeyCat gaming department went for a market research trip, organized by Advantage Austria, to South Korea. A number of other Austrian gaming companies – ranging from small startups to pretty large established players – were also participating.
We gained a lot of information and met very interesting people while visiting major gaming, technology and publishing organizations in Seoul including LG, Neowiz, NHN, Gamevil, Com2Us, Incross and the Hoseo University.
We also spent three exciting days on one of worlds largest gaming fairs, the G-Star in Busan.
Besides that, it was also loads of fun and we enjoyed our introduction into Korean lifestyle and culture including, of course, Korean food and drinks.
For Donkeycat, here are the most important facts that we found out about the Korean gaming market:
- almost everybody is focusing on the rapidly growing mobile games market, but still online games have by far the largest market share and revenues. Future plans and strategies, however, are based mainly on mobile.
- in terms of monetization, the focus is clearly on free to play, premium or subscription based models are considered as a niche segment in decline, this is the case in almost all Asian countries. A strong tendency into that direction can also be seen in US and European App Stores, but there premium is still much more popular than in Asia.
- the major platforms in South Korea – as everywhere else – are Android and iOS. But in Korea Android is (probably due to Samsungs focus on Android) a lot more dominant than iOS and also the most profitable platform
- the unusual high profitability of the Android platform can be explained by the preference of Koreans of free-to-play over premium. Google Play is not the biggest Android store, domestic providers have their own large App-Stores like the T-Store. However, Google Play is reported to steadily increase its share.
- Windows Phone and Blackberry have no relevance in the domestic market (only some large publishers have ported their most successful titles on those platforms, mainly for the U.S. market), but developers and publishers are keeping an eye on how the new Windows 8 is doing
- Electronics companies like LG and Samsung are also doing their own Stores for Smart TV games and are also experimenting with various input devices (for example Wii-Stlye remote controls). This is a pretty new and still developing market and many factors will determine if this will becomes a success. However, considering that there is at least one TV set in every household, this market may become very relevant very quick.
- the social messenger Kakao Talk seems to have taken Korea by storm, and replaces Twitter, Facebook, Whatsapp, Skype and even SMS for practically every Korean. It is considered to having changed the rules for whole mobile gaming industry in Korea overnight. Kakao Talk is now by far the most important platform for promoting games and is also venturing into other businesses like fashion or music.
- social component of games – like playing against friends, inviting friends, sharing scores with friends and so is is considered as very important. Koreans love to contact and make friends online (see Kakao Talk) and compete against them when playing games. This helps to increase number of players by viral word-of-mouth marketing and offers additional possibilities for monetization.
- Cross-Platform development tools are a critical issue in terms of development costs. Here Unity 3D is clearly the first choice for developers, not only for 3D, also for many 2D games.
- South Korea has some very strict laws on game rating and protection of juvenile players – but for foreign companies offering their mobile games in the big app stores (Apple Store, Google Play) the have – at least so far – not really any practical relevance.
Many thanks to the Austrian Embassy Commercial Section / Advantage Austria, especially to Matthias Grabner (who was not only the project manager in charge but also our local guide and interpreter) and to the Austrian Trade Commissioner for Korea, Michael Otter and his team who did a great job in organizing everything and supporting the Austrian companies in getting the most out of the trip AND having a good time.
DonkeyCat is of course also planning to join the Korean trip next year as well – in the meantime our gaming department will use the new insights to develop some games which might also become Hits on the Korean Market.