South Korea's Game Industry, After a Turbulent 2024, Begins Rebounding Next Year!
Dec 29, 2024
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As the response to environmental changes to the era of the pandemic has been delayed, the company has had to accept the extreme drug prescription of restructuring and replacing the head due to worsening sales and profitability, and the polarization of profits has intensified for each company. Information disclosure of probability-based items was legislated, tens of billions of won in fines were imposed, legal disputes over IP continued, and the industry was forced to shrink overall, including the impeachment of the president following martial law.
It is unclear whether the domestic and foreign situation and economic situation will improve dramatically next year. However, we can expect the release of more expected works on various platforms, including consoles, with the accumulated capabilities throughout the year of removing bubbles and strengthening the interior. It is also a good thing that we have opened our breath by re-entering the Chinese market, which has been closed for a long time.
On top of that, as blockchain and virtual assets are more likely to be in the spotlight in the second period of the Trump administration, along with AI (artificial intelligence), there is a clear expectation that the game industry will regain its status as a pioneer in actively introducing and utilizing new technologies and trends as before. Looking back at the game industry this year.
▶ Age of Atrophy
On January 2, the first day of the work, a revision to the Enforcement Decree of the Game Industry Promotion Act was passed at the Cabinet meeting, which included the mandatory disclosure of probability-based item information, and it took effect on March 22.
The legalization of probability information on probability-type items that had been implemented autonomously was clearly negative news in terms of another regulation in the industry rather than a clear decline in sales. This also means that users were deeply distrustful of game companies' information disclosure.
As regulations on domestic games are concentrated, there is still a problem of reverse discrimination that special sanctions cannot be imposed on overseas games that do not have offices in Korea, and game companies have both the task and opportunity to diversify their profit models, which have been complacent with probability-based items.
Although it was before the revision was implemented, Nexon was ordered to correct and fined by the Fair Trade Commission for not properly notifying the probability of items in MapleStory. In September, it decided to pay up to 21.9 billion won in damages through collective dispute settlement, raising concerns that other companies will also be affected.
Due to the industry's recession, which began in earnest last year, a large-scale restructuring was carried out this year, and the heads were replaced in large numbers, exposing the difficult situation.
Of course, since the beginning of the year, global game companies such as Riot Games, Microsoft, Blizzard, and Ubisoft have continued to reduce their workforce, so Korean branch personnel could not be free from it, but NCsoft's massive restructuring and the spin-off of its development subsidiaries were a significant shock. To streamline the overall cost structure, NCsoft appointed co-CEO Park Byung-moo in addition to CEO Kim Taek-jin for the first time since its foundation, and large game companies such as Nexon, Netmarble, and Kakao Games were busy replacing CEOs without exception to add new wind to the organization. This is why attention is focused on whether the changes that have continued throughout the year will improve the constitution of the industry after next year.
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It has been a difficult year overall, but there have been quite a few moves to expect a rebound.
First of all, in July, three years after Krafton in 2021, the shift-up listed on the KOSPI, and the IPO of domestic game companies resumed. The shift-up, which received favorable reviews at home and abroad for the console game `Stella Blade' after the `Goddess of Victory: Nike', rose to the fourth place in the industry's market capitalization after Krafton, Netmarble, and NCsoft, rising to 3 trillion won to 4 trillion won. As it played a role in amplifying investors' interest in game companies again, the green light was also turned on for the listing of Netmarble Neo and Lionheart Studios after next year.
The number of games receiving foreign capital reviews in China is increasing, and Nexon's Dunjeon & Fighter Mobile has posted hundreds of billions of won in sales in a month since its launch in May based on the popularity of the online original, and it is possible to make a rebound again in the world's largest game market, which was virtually closed due to the ban, such as maintaining the top sales at the end of the year. Of course, various genres of Chinese games, such as 'Wonshin', 'Raising Mushroom Kers', and 'Last War: Survival', have become difficult as they dominate the domestic market with excellent game performance, but it is clear that it is a stimulus to compete in good faith.
At the representative game exhibition 'G-Star 2024' in Korea, which marks its 20th anniversary this year, a large number of large game companies, including Nexon, showed off their development competitiveness by showing expected works of various genres and platforms. Prior to this, more than 30 companies, the largest ever in Korea, participated in Europe's largest game exhibition 'Gamescom 2024' held in Germany in August, and new works expected to be released in 2025 such as Pearl Abyss' 'Red Desert', Krafton's 'Dark & Darker Mobile', and Nexon's 'First Bursker: Kazan' are also giving hope.
On top of that, games that actively utilize AI are appearing, and as interest in virtual assets increases, the development of P2E games that actively reflect them is likely to be in the spotlight again. In addition to the existing WeMade and Com2uS Holdings, former WeMade CEO Jang Hyun-guk, who led the cryptocurrency "Wimix" project, is expected to join Action Square next year to actively develop the blockchain business, which is expected to give new growth engines to the industry.
This article was translated by Naver AI translator.
