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| Netmarble Games' "Lineage 2: Revolution" is one of the Korean games waiting for the Chinese government to issue service permits necessary for them to be introduced in China. / Courtesy of Netmarble Games |
By Jun Ji-hye
Korean game companies have exported no games to China in the first half of the year while Chinese firms have exported 91 games to Korea during the same period, according to mobile ad tech company IGAWorks, Thursday.
Market observers say if this imbalance continues, Korean firms could suffer a loss of hundreds of billions of won and may result in China eating into Korea's game market.
IGAWorks said 91 Chinese games have been released on Korea's Google Play Store from Jan. 1 to June 21, while there were no Korean games released in China.
Exports of Korean games to China began to be blocked since March last year when the Chinese government suspended issuance of permits necessary for Korean games to be sold in China in what was seen as part of the country's protest of Korea's deployment of a U.S. Terminal High Altitude Area Defense (THAAD) system.
The total number of Chinese games exported to Korea from March last year to June 21 this year was 202, IGAWorks said, noting exports of games by Korean firms to China were stopped for more than a year.
China is the top game market in the world. The scale of China's online and mobile game market in 2017 was estimated to be about $29 billion, according to market researcher Euromonitor International.
Market observers estimated Chinese game firms' sales at about 200 billion won ($178 million) in the Korean game market last year. But Korean firms have just been waiting for the Chinese government to issue service permits.
About 10 Korean game firms have applied to the Chinese government for service permits.
Netmarble Games applied for a permit for its "Lineage 2: Revolution" in December 2016, while NCSOFT did so for its "Lineage Red Knights" in January 2017. Bluehole is also waiting for a service permit for its "PlayerUnknown's Battlegrounds" that was a great hit in the global game market last year.
An official from a game publisher said the Korean firms do not feel any changes even after the Korean and Chinese governments reached an agreement to mend their ties in all sectors last Oct. 31, after more than a year of frayed diplomatic relations over the U.S. missile defense system.
"Before the THAAD controversy, the Chinese government issued the service permits every two to three months in general," the official said. "But the permits have not been issued for 15 months now."
Another official said the suspension of the issuance may be related to China's move to protect and nurture its own game industry.
James Kang, home and tech analyst at Euromonitor International, said Korean game firms need to prepare for the prolonged suspension of service permit issuances and explore other markets.
"Euromonitor's 2018 Toys and Games Research shows India's game market will grow at a compound annual growth rate of 43 percent from 2017 to 2022, while the Japanese market grows at 24 percent and the Malaysian market at 19 percent," he said. "If game firms keenly study those markets and make investments, there would be the possibility for them to grab an opportunity to develop new growth engines."
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