Nexon accused of playing it safe
By Cho Mu-hyun
Korea’s game industry has grown spectacularly over the past decade, called by some the true “hallyu,” or Korean cultural wave, for its contribution to domestic economic growth, unlike the over-hyped pop song frenzy.
The company that stands out most is Nexon, founded in 1994, which has now grown to mark over 1 trillion won in annual revenue. It has recently acquired a majority share of runner-up player NCsoft, and market analysts expect its position at the top to become unchallengeable.
“Just considering Korea, it’s like Apple and Samsung merging into one company to dominate the smartphone market,” said one industry analyst by telephone. “Nexon will take from a 50 to 60 percent market share thanks to its recent stock purchase of NCsoft.”
But there are concerns whether Nexon is acting as a responsible leader of the domestic game industry. Its lack of creative drive, self-developed products and little care for industry responsibility is the target of criticism.
Led by CEO Kim Jung-ju, it is mostly known for its strong casual game line-up that includes Maple Story, Kart Rider and Sudden Attack. None of the titles were originally made by Nexon but were by small studios that the company, seeing the games under development, acquired.
“All the successful titles released by Nexon were from mergers and acquisitions, and the unpopular ones were self-developed,” said Kim Min-kyu, a cultural content professor at Ajou University over the phone. “It is unavoidable from a business standpoint for a large company to purchase small or mid-sized ones but due to Nexon’s position as the titular company that represents Korea’s game industry to the world, the game community has been generally unfavorable to its numerous buyouts.”
Nexon has been constantly compared to rival NCsoft for their different approach to making and publishing games. NCsoft, headed by Kim Taek-jin, is known as the “craftsman” that invests years and billions of won in its own studio to release original online role-playing games. Titles such as Lineage and Aion, and the recently launched Blade & Soul were all conceived by the company from start to finish. Nexon, is known more as a “conglomerate,” rather than a game maker.
“There is a general atmosphere among the game community that Nexon is a business, not a game developer,” said an industry official in condition of anonymity. “Not once in its history has it invested billions of won on a major, original and creative game. King of the Winds (launched in 1996 in which Nexon owes its reputation to) was probably the last and only time a game was planned, made and released by the company.
“They are known for being stingy when it comes to research and development on making their own titles. They take the conventional money is the answer to everything approach, and buy small companies cheaply and promote their games for maximum profit.”
Nexon is the most global of domestic game companies. Starting in 2007, over half its revenue came from outside of Korea. In 2011, 67 percent of its annual proceeds came from overseas markets.
The firm already has a steady income from China from game royalties to sales that amount up to billions of won and, according to analysts, it is ultimately aiming for the United States. These strong foreign ties also makes it the “face of Korean game industry,” said Kim.
“It is unfortunate that they don’t show a creative drive in making games. Though it will be immensely difficult, the game community is hoping that it puts in more to release stronger, original titles after its strengthened alliance with NCsoft.”
The professor said it was important for the industry as a whole for Nexon to actively voice out some of the concerns of the industry such as government regulations: Korea’s policy on games is known for being strict with controversial game ratings systems and publishing standards, to name just a few.
“Instead of just worrying about earning more money and releasing more games, Nexon is in a position to actively lead the discussion of what games mean in the current era of smartphones and connectivity. Nexon can actively start the talks on the communication between games and society.”