THE KOREAN ELECTRONIC GAMES MARKET Selling Game Content and Applications to the World' s Most Avid Electronic Games Players

SUMMARY

Vectis International's latest study ? "THE KOREAN ELECTRONIC GAMES MARKET: Selling Game Content and Applications to the World's Most Avid Electronic Games Players" identifies opportunities for foreign electronic games developers in South Korea. Fueled by an enthusiasm for a wide range games, the market is expected to growth by 19% in 2002 and reach KRW 2.2 trillion (approx. U$1.76 billion).

Electronic games have become the second largest entertainment industry in Korea, after broadcasting. The value of Korea's game industry reached C$1.48 billion in 2001 and will reach C$1.76 billion in 2002. While the wide popularity massively multi-player online role-playing games (MMORPG) is what sets the Korean game market apart the most from other countries, sales figures for PC games are unparalleled around the world as well. Korea accounted for 40% of worldwide sales for StarCraft and 30% for Diablo II. Warcraft III sold 330,000 copies with the first 20 days following its release in July 2002. With over 50% of the 32 million mobile subscribers using high-speed wireless Internet services, Korea's three mobile operators consistently record well over 85,000 games downloads.

The study is the most complete published on the topic and is a must-have business development tool for foreign game developers and publishers wishing to enter this increasingly competitive market. The 172 pages study provides comprehensive analysis of key market drivers, inhibitors and trends for all game platforms, I.e. online, console, PC, mobile and arcade games. It also includes profiles of 50 top local game companies.

It contains up-to-date, actionable facts and analysis including the latest game titles rankings and revenues statistics for major developers and publishers and also provides an insight into the future of the industry. It is the result of several months of in-country research and interviews with game developers, publishers, industry analysts, government agencies and others. This study allows to:

Game developers are likely to find opportunities in key areas. As Korea's game players' base broadens, local publishers are increasingly interested in titles intended for children as well as adult-themed games. Opportunities lie also for console games developers. With the Xbox's and Gamecube's recent release in Korea, the combined marketing thrust might help win over Koreans, who have shown a strong preference for subscription-based online games and a reluctance to buy game hardware.

TABLE OF CONTENTS

Chapter 1 Electronics Games Market Overview, Regulatory Issues and Support Policy

• Korean Electronics Games Market Overview
• Players Preference and Marketing Issues
  • Korean Players Demographics and Korean Players Preferences
  • Marketing and Seasonal Sales
• Anatomy of a Korean Game Player
• Electronic Games Market Drivers and Inhibitors
  • Electronic Games Market Drivers
  • Electronic Games Market Inhibitors
• Key Electronic Games Market Trends
• Major Legal and Regulatory Issues Relating to the Game Market
  • Game Rating System
  • On-going Issues Related to the Game Rating System
  • Implications of the Game Rating System on Game Developers
  • Cyber Items Cash Trading
  • Player Killing ("PK")
  • Game Payment and Settlement Systems
  • Parental Consent for Enrolling Minors
  • Game Addiction
• Intellectual Property Protection
  • Significant Intellectual Property Protection Cases and their Outcome
• Support Policy and Programs by Government Agencies
  • Game Related Laws
  • Game Support Policy

Chapter 2 Online Games

• Online Games Market Overview and Structure
• Online Games Market Drivers and Inhibitors
  • Online Games Market Drivers
  • Online Games Market Inhibitors
• Online Games Major Market Trends
• Players Segmentation and Usage Patterns
• Commercial Issues and Revenue Models
  • Usage Rates, Billing, Payments Methods and Revenue Sharing Models for PC Rooms accounts
  • Usage Rates, Billing, Payments Methods and Revenue Sharing Models for Personal Accounts
  • Usage Rates, Billing, Payments Methods and Revenue Sharing Models for Game Portals
  • Usage Rates, Billing, Payments Methods and Revenue Sharing Models for ISP Portals
• Marketing Online Games to Korean Players
  • Channels for Promotion
• Main Domestic and Foreign Titles

Chapter 3 Console and Handheld Games

• Console Games Market Overview and Structure
• Console Games Market Drivers and Inhibitors
  • Console Games Market Drivers
  • Console Games Market Inhibitors
• Console Games Players Segmentation and Usage Patterns
  • Player Segmentation
  • Player Usage Patterns
• Sony Computer Entertainment Korea (SCEK) PS2 Market Entry Strategy
  • Analysis of PS2's Sales Performance in Korea
  • PS2 Revised Strategy
  • PS2 Games Titles Strategy
  • PS2 Online Game Strategy
  • "PS2 Rooms" Strategy
• Microsoft Xbox Market Entry Strategy
  • Xbox Distribution Strategy
  • Xbox Games Titles Strategy
  • Xbox Live Strategy
  • "Xbox Rooms" strategy
• Nintendo GameCube Market Entry Strategy
• Main Domestic and Foreign Console Game Titles
• Local Handheld Games Devices
  • GP 32
  • Crazy Mini

Chapter 4 PC Games

• PC Games Market Overview and Structure
• PC Games Market Drivers and Inhibitors
  • PC Games Market Drivers
  • PC Games Market Inhibitors
• Major Market Trends for PC Games
• Players Segmentation and Usage Patterns
• Commercial Issues
  • Change in Sales and Distribution Methods
  • Parallel Imports
• Main Domestic and Foreign Titles

Chapter 5 Mobile Games

• Mobile Games Market Overview and Structure
• Background on the Korean Mobile Telecommunications Market
  • High-speed Mobile Telephony Services and 3G Licenses
  • Wireless Internet Services
• Mobile Games Market Drivers and Inhibitors
  • Mobile Games Market Drivers
  • Mobile Games Market Inhibitors
• Major Market Trends for Mobile Games
• Players Segmentation and Usage Patterns
• Commercial Issues and Revenue Models
  • Revenue Sharing Models for VM-based Games
  • Revenue Sharing Models for Network Mobile Games
  • Marketing and Promotional Issues
• Main Domestic and Foreign Titles

Chapter 6 Arcade Games

• Arcade Games Market Overview and Structure
• Arcade Games Market Drivers and Inhibitors
  • Arcade Games Market Drivers
  • Arcade Games Market Inhibitors
• Major Market Trends for Arcade Games
• Main Domestic Developers and Titles

List of Tables

Chapter 1

• Table 1-1 Korean Game Market Size and Forecast
• Table 1-2 Sales Performance of Major Game Companies in Korea for 2001 - 2002
• Table 1-3 Elements of Interest in games by Korean Players (survey results)
• Table 1-4 Evolution in Preferences of Games Platforms
• Table 1-5 Elements of Interest in Games by Korea Players
• Table 1-6 Favorite Game Genres by Gender
• Table 1-7 Highlight of the Annual Computer and Internet Use Survey 2002
• Table 1-8 Number of Technical Employees in Game Developing Companies by Platforms (as of YE 2001)
• Table 1-9 Results of the Korea Media Rating Board ratings of Games
• Table 1-10 Description of Rating Classification for Violence by the Korea Media Rating Board
• Table 1-11 Description of Rating Classification for Gambling by the Korea Media Rating Board
• Table 1-12 Description of Rating Classification for Language by the Korea Media Rating Board
• Table 1-13 Description of Rating Classification for Pornographic Content by the Korea Media Rating Board
• Table 1-14 Description of Rating Classification for Other Issues by the Korea Media Rating Board
• Table 1-15 Estimated Trade Losses Due to Piracy and Levels of Piracy in Korea
• Table 1-16 Main Game-related Laws

Chapter 2

• Table 2-1 Top 10 Popular Online Games (as of September 2002)
• Table 2-2 Usage Statistics for Lineage
• Table 2-3 Evolution in the Number of PC Rooms (1998 to 2001)
• Table 2-4 Survey Results: What are the Online Game Industry's Strengths?
• Table 2-5 Survey Results: What is the post-Lineage Game Title?
• Table 2-6 Selected Online Games for Children and Developers
• Table 2-7 Most Common Place for Playing Online Games
• Table 2-8 Evolution in Age Distribution of PC Rooms Users for 2000 and 2001
• Table 2-9 Wholesale Usage Rates for PC Rooms (for Lineage)
• Table 2-10 Basic Wholesale Services Rates for PC Rooms for Selected Online Game Titles (Sept. 2002)
• Table 2-11 Key Operating Statistics and Revenues for PC Rooms for 2000 and 2001
• Table 2-12 Monthly End-user Flat Rates for Top Ten Online Games (Sept. 2002)
• Table 2-13 Hourly Playing Fees for Selected Online Games as of Q3 2002
• Table 2-14 Proportion of Paying Methods by players of Selected Online Games
• Table 2-15 Daily Page Views for Selected Game Portal Sites
• Table 2-16 Revenues Breakdown for Neowiz for August 2002
• Table 2-17 Broadband Internet Subscribers by ISPs (Sept. 2002)
• Table 2-18 Online Games Under Open Beta Tests as of August 2002
• Table 2-19 Selected Online Games Titles Currently Under Co-development
• Table 2-20 Games Titles, Services Providers, Free Structure and URL for Currently Available Online Games

Chapter 3:

• Table 3-1 Survey Results: Breakdown of Game Console Ownership
• Table 3-2 Survey Results: Preference for the Future Purchase of Console Game Machines
• Table 3-3 Initial Sales Forecasts for PS2 Consoles for the Year 2002 (as of Q1 2002)
• Table 3-4 Comparative Prices for the PS2 Console in Selected Countries (as of July 2002)
• Table 3-5 Top 10 PS2 Titles for November 2002
• Table 3-6 List of SCEK Licensees as of January 2002
• Table 3-7 Console Games Titles (PS & PS2) Release List - October 2002
• Table 3-8 Console Games Titles (PS & PS2) Release List - November 2002
• Table 3-9 Console Games Titles (PS & PS2) Release List - December 2002
• Table 3-10 Technical Specifications for the GP 32 handheld Game Machine
• Table 3-11 Current Game Titles for the GP32

Chapter 4:

• Table 4-1 PC Games Titles Sales by Titles (2001)
• Table 4-2 Sales Performance of Major PC Games Companies for 2001 and 1H2002
• Table 4-3 Number of PC Games Released by Genre for 2001
• Table 4-4 Most Played Game Genres Among PC Games
• Table 4-5 Retail Outlets for Electronic Hardware and Software by Types in Korea
• Table 4-6 Breakdown of Sales for Selected Major PC Games Publishers by Types of Retailers
• Table 4-7 market Shares of Domestic and Foreign PC Games Titles in terms of Revenues for 2001
• Table 4-8 Top 20 Selling PC Games for the Weeks of June 4 to October 22, 2002
• Table 4-9 Upcoming PC & Online Games Releases by Domestic Developers
• Table 4-10 Release Schedule of Foreign PC Titles for November 2002
• Table 4-11 Release Schedule of Foreign PC Titles for December 2002
• Table 4-12 Release Schedule of Foreign PC Titles for 1H 2003

Chapter 5

• Table 5-1 Sales Revenues for Top Five Domestic Mobile Games Developers (1H2001 & 1H 2002)
• Table 5-2 Key Milestones in the Wireless Telecommunications Industry (1996 ·2001)
• Table 5-3 Key Metrics for Korean Wireless Operators
• Table 5-4 CDMA 2000 1X Subscribers Statistics for Wireless Operators as of October 2002
• Table 5-5 Comparative ARPU Statistics for Operators by Types of Handsets
• Table 5-6 Breakdown of Sales of Color Screen Handsets for August 2002
• Table 5-7 Mobile Games and Content Strategies of Selected Fixed Line Operators and Internet Portals
• Table 5-8 Descriptions of Wireless Internet Platforms by Wireless Operators
• Table 5-9 Mobile Browsers by Operators
• Table 5-10 Main Characteristics of Mobile Game Players
• Table 5-11 Mobile Game Players Age Segmentation
• Table 5-12 Revised Pricing for Data Packet for SK Telecom (effective June 1, 2002)
• Table 5-13 Comparative Statistics for Mobile Game Downloads for Wireless Operators
• Table 5-14 Number of Mobile Games Downloads for KTF (week of Nov. 13, 2002)
• Table 5-15 Top Downloaded Mobile Games for Korea's Wireless Operators (as of Nov. 13, 2002)

Chapter 6

• Table 6-1 Sales Revenues and Exports for Top Five for Arcade Games Companies for 2000 and 2001
• Table 6-2 Top Arcade Games in Korea -"Video Games" (October 2002)
• Table 6-3 Top Arcade Games in Korea -"Special Games, Music and Dance" (October 2002)
• Table 6-4 Top Arcade Games in Korea -"Token Games"(October 2002)
• Table 6-5 Comparative Numbers of Games Rooms and PC Rooms (1998 to 2001)
• Table 6-6 Results of Arcade Games Ratings (January to September 2002)
• Table 6-7 Planned Arcade Games Portal Sites
• Table 6-8 Selected Arcade Games Developers and Major Titles

List of Figures

Chapter 1

• Figure 1-2 Distribution of Revenues Between Game Platforms for 2001
• Figure 1-2 Sales Distribution for Top Ten PC Games Titles for 2001
• Figure 1-3 Screen Shot of a Web Site Dedicated to Trading of Cyber Items

Chapter 2:

• Figure 2-1 Market Shares by Revenues for Major Online Games Companies (Feb. 2002)
• Figure 2-2 Sales Breakdown Between PC Rooms and Personal Accounts for Lineage (Q4 2000 to Q2 2002)
• Figure 2-3 Usage Rates, Billing, Payment Methods and Revenues Sharing Models for Games by Access Modes
• Figure 2-4 Flow Chart for Online Games Payment Systems

Chapter 3

• Figure 3-1 Sales Performance for Sony's PS2 in Korea from February to September 2002
• Figure 3-2 GamePark GP32 Handheld Game Device
• Figure 3-3 MobileHands Crazy Mini Handheld Game Device

Chapter 4

• Figure 4-1 Market Shares for Top Ten PC Games Companies in Korea for 2001
• Figure 4-2 Sales Distribution for Top Ten PC Games Titles for 2001
• Figure 4-3 Evolution in the Distribution Networks for PC Games in Korea

Chapter 5

• Figure 5-1 Breakdown of Wireless Data Usage for SK Telecom (July 2002)
• Figure 5-2 Revenue Sharing Models for VM-Based Mobile Games

Appendix

Profiles of Major Electronic Games Companies.

• Actoz Soft Co., Ltd.
• Amuse Machine Systems
• ANDAMIRO Co., Ltd.
• Bisco Co., Ltd.
• Buff Entertainment
• CCR, Inc.
• Com2uS Co., Ltd.
• Digital Dream Studios
• DS Interactive, Inc. (DS Net)
• Eolith Co., Ltd.
• Esoftnet Co., Ltd.
• Expotato Corporation
• EZNEGO Corporation
• F2System
• GameVIL, Inc.
• Gravity Corporation
• GRETECH Corporation
• GRIGON Entertainment Co., Ltd
• HanbitSoft, Inc.
• HI-Win
• JC Entertainment Corporation
• JoyOn Entertainment Co., Ltd.
• Kama Digital Entertainment, Inc.
• KidnKid.com, Inc.
• Manastone Co., Ltd.
• M DREAM Co., Ltd.
• MEGA Enterprise
• NAKO Interactive Co., Ltd.
• Ncsoft Corporation
• Netmarble Inc.
• Nexon Co., Ltd.
• NHN Corporation
• PHANTAGRAM Interactive, Inc.
• Pocketspace, Inc.
• SEGO ENTERTAINMENT
• SIEMENTECH Co., Ltd.
• Softmax Co., Ltd.
• SONNORI
• TAEWOOL ENTERTAINMENT Co. ,Ltd.
• Taff System
• Topgen Co., Ltd.
• UNIANA Co., Ltd.
• UnwiredKorea, Inc.
• Web Eng Korea Co., Ltd.
• Webzen, Inc.
• Wemade Entertainment Corporation
• Wizard Soft Ltd.
• WIZGATE Corporation
• SunnyYNK, Inc.
• ZIO Interactive, Inc.