The gaming industry in South Korea has seen a surge in competition from foreign companies, particularly from China. (Image courtesy of Yonhap)
SEOUL, Mar. 14 (Korea Bizwire) – In recent years, the gaming industry in South Korea has seen a surge in competition from foreign companies, particularly from China.
This trend has been gaining momentum as Chinese firms have expanded their capabilities and competitive edge, largely due to the restrictions on Korean companies entering the Chinese market imposed by the ban on hallyu, a euphemism for the global popularity of South Korean cultural exports.
As South Korea’s gaming sector struggles to release groundbreaking intellectual property (IP) and remains focused on certain genres, Chinese companies are stepping up their game, launching a barrage of titles.
This onslaught is particularly noticeable in the mobile gaming arena, which has been a stronghold for South Korean developers. There’s a growing concern that local companies might lose their home advantage to these international players.
Recent data reveals that half of the 10 highest-grossing games on Google Play were developed by foreign studios, with three of those being Chinese.
The gaming landscape in South Korea is also changing, with a shift in player preference from the massively multiplayer online role-playing games (MMORPGs) that Korean developers have traditionally dominated, to more casual, less time-consuming games.
This shift plays into the hands of Chinese developers, whose simple gameplay mechanics and cost-effective strategies are resonating well with players.
Furthermore, Chinese developers are leveraging substantial marketing budgets and stable revenue models from their domestic market to intensify their promotional efforts in South Korea.
High-profile advertising campaigns, including those featuring celebrities like Shin Dong-yup, have been particularly effective in capturing the attention of the younger demographic.
An industry insider noted that the high rate of in-game purchases by Korean players makes them an attractive target for Chinese companies.
Unlike their previous strategy of quick, sensational game releases, these companies are now making a serious and well-funded push into the Korean market.
The continued success of Chinese games is heightening the sense of crisis within the Korean gaming industry.
Companies that once trailed behind Korean developers are now leading the pack, with giants like Tencent and NetEase achieving global recognition in terms of market capitalization and hit titles.
The presence of Korean games among the most popular titles, measured by Monthly Active Users (MAU), is dwindling.
Notably, no Korean-developed game made it into the top five by MAU last month, with ‘Brawl Stars’ by Supercell, a Tencent subsidiary, taking the lead.
Meanwhile, the influence of Korean companies in the Chinese gaming market is declining.
A recent report indicated a decrease in the proportion of Korean games exported to China, highlighting the challenges faced by Korean developers in maintaining their competitiveness.
Kevin Lee (kevinlee@koreabizwire.com)
