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Jul 06, 2005

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Comments

1.

One thing I wondered about this is related to something Tim asked back in October '04 -- how much is WoW or any other MMOG grounded in a particular culture? There's so much interesting stuff happening in this space with cross-cultural play that I'm surprised there aren't more papers on it. Tim said:


[H]ow much of Katamari Damancy comes off as original because of translation effects? How much of its whimsical surreality stems from a much more structured national relation between Japanese and American popular cultures, the kind that gives rise to memes like “all your base belong to us”? If Katamari Damacy was wrapped in the graphical and narrative infrastructure of an Id game—say the ball was being pushed by a hyper-steroidal, “realistic”, character trapped within H.R. Giger backdrop—would its gameplay still have its structural originality? Is the newness of the game just an affect of a different use of the conventional console controller?

Nick was thinking about MMORPG differences too, back in November '04.

Btw: was the "female empowerment" theme in this commercial intended as ironic?

2.

Mirror of the Coke Ad:
http://bbb.typepad.com/billsdue/files/wow_coke.mov

More information about the Coke, The9, and WoW Deal:
http://www.danwei.org/archives/001950.html

Speaking of the WoW China Deal, Blizzard is going the way of Gravity (makers of Ragnarok Online):

http://www.digitalmediaasia.com/default.asp?ArticleID=4676
=======================================
"Chinese online gaming company The9 has disclosed that it will commit $74.1m on Blizzard's 3D MMORPG World of Warcraft (WoW). The9 is understood to have paid an initial non-refundable licence fee of $3.0m to Blizzard's parent company Vivendi Universal in February this year. The9 has also guaranteed approximately $51.3m in royalties, consisting of quarterly payments from $1.6m to $3.7m over a four year period. The company has further promised to spend $13m for marketing and promotions of WoW, apart from $6.8m for certain events before the game's launch. Vivendi will receive 22 per cent of the face value of sold WoW pre-paid cards sold as royalties. "
=======================================

Gravity does the same thing with Ragnarok. They license it out to companies all over the world which enables them to run the game in 37 countries (http://www.gravity.co.kr/en/business/eng_PCgame_business.asp)

They actually only run the MMORPG in Korea and the United States. If you look at their financials since they are a public company and do some nifty math you come up with about 17,375 U.S subscribers as of 1Q 2005 (http://www.gravity.co.kr/en/ir/Eng_IRLibraryView.asp?seq=54&page=1&sm=&sk=).

Gravity it currently the most diversified (globally) MMORPG Company. A recent Gravity Slideshow (http://www.gravity.co.kr/down.asp?f=2005/05/27/ID_Non_Deal_Roadshow_Materials_1.zip) compares them to other MMORPG companies on page 16 with an interesting pie graph that shows over 75% of Gravity’s revenues come from 11 international markets. This is compared to other companies revenue’s such as The9 (100% China); Shada (100% China); Webzen (85% Korea); NCSoft (85% Korea, 12% Taiwan and interesting enough only 1.4% U.S?).

On page 10 of the same slide shows gravity’s current strategy of “vertical integration” by “maximizing value through acquisition strategy” so that they acquire and gain control of the companies that they licensed Ragnarok Online out to. This way when they launch future games such as Ragnarok Online 2 they will be able to grab a bigger piece of the pie (instead of just license fees). Similar to starting a Franchise to make your product global and then after acquiring enough capital from licensing fees you buy back all of the franchises.

3.

Btw: was the "female empowerment" theme in this commercial intended as ironic?

My understanding is that the three women in this commercial are members of a very popular pop-rock group in China, so I'd say that the 'female empowerment' theme is no more ironic there than it was in the "We Will Rock You" Pepsi commercial Beyonce, Pink, and Britney Spears did a few years back. It's high profile, powerful women in pop music telling a man (in the Pepsi commercial, it was Enrique Iglesias as Caesar) to take a hike. Apparently, it's a good technique for selling cola, both here and in China. I'm not sure why you perceive it as ironic, though.

4.

The irony is that they refute his 'sexy is what sells' claim by then appearing in 'sexy fantasy garb' in order to sell both fantasy combat and Coke drinking...

-Akari

5.

There are lots to say about the China MMOG market.

Like India there are lots of young people being trained in IT fields. Unlike India, where Bollywood is big, China has adopted online gaming as a major entertainment outlet.

One reason for this is that traditional media is still heavily controlled by the government. The second reason is that the government have encouraged the adoption of this medium. The result is that the MMOG industry, by revenues, is at least 5 times bigger than the movie industry.

Socially, the kids living along the coast (urban kids) are growing up and adapting this medium at a much faster rate than Japan or US. They’re also starting to upgrade their skills from 2D to 3D, so we’ll start seeing AAA “export quality” games out of China in 2-3 years.

Art skills are also top notch there, so you start hearing news of game companies outsourcing art development to China.

Frank

6.

As for Girrl Power:

Is no longer "sexy that sells", but "sexy (with the ability to kick your ass) that sells" now.

In the traditionally macho Korea, females rank among the top players. It goes against tradition, but it also appeals to the non-traditional youths.

Go Coke!

7.

Dmitri > China is probably going to be the world's largest consumer of energy, putting it on a political and economic (if not military) collision course with the United States.

Yay! Let somebody else take the heat of militant Islam. Go China, I say.

8.

I want you to picture staring across Manhattan, from the angle designed to give you the most view of large buildings possible. Maybe a few elevated roads in the way. The bustle of a city, people walking about, lots of cars on the road, honking and grumbling and growling. In the case of Manhattan, you probably see water to your left and right, and certainly behind you.

Now, copy and paste. Fill in the spots where you see water with more Manhattan. A full 360 degree view of more buildings. Manhattan is 4 times larger now. The sense of cityness is overwhelming.

Now, start moving in a car. Drive through this for 45 minutes, never seeing anything but more Manhattan, all the way to the horizon in every direction.

Welcome to Shanghai.

Across the river in Pudong, in the shadow of the Oriental Pearl TV tower (and mall), you'll find street vendors hawking Rolexes (or fascimiles thereof)--you'll be offered approximately one per minute as you walk around. Pudong is spacious, with wide roads and parkland. It feels (and basically is) like one of those riverfront developments touted as a riverwalk, complete with small convention center. An entire city block will be a smashed wasteland in the middle of what appears to be rich, and along the shattered walls will be a few businesses tucked into surviving rooms on the outer edge. In front of them, filthy food will be sold by very poor people. During Golden Week, you'll walk behind street vendors selling balloons shaped like Uncle Sam hats.

Cross the river to the Bund and you'll parade past Prada, Ermenildo Zegna, the Gap. Everywhere there will be people with cameraphones chattering away. Odds are many of them know someone who plays online games. On this side of the river, away from Pudong, you can walk from a Chanel store to an open air market selling 50 cent Game Boy Advance carts. You'll be passed by BMWs and by cyclists carrying what looks like a metric ton of rags on their forehead.

Go up a narrow staircase to a business you can't know is there from the street. At the doorway a couple of small children will have begged for money under the watchful eye of their mother and a police officer. The smallest bill you have will be too much. Upstairs are 100 computer stations running the latest ATI video cards. Girls are playing Korean clones of Bejeweled. Boys are hacking and slashing their way through anime takes on Diablo in an MMO setting. Many of them will be watching TV on the computer screen. There's pirvate booths near the back where you can game with your girlfriend in semi-privacy. Banners for forthcoming games festoon the walls, very much like a Blockbuster's "Coming Soon" sign.

Try to remember that each person hacking away at virtual homicidal bunny rabbits with meat cleavers (nothing so mundane as orcs here) is paying pennies for it. Then shake your head to clear away the impression, suddenly very strong, that you're in a small casino hidden away on the second floor of a building on a rarely driven back street.

As Magicback said, there's much to say about China's online game market.

9.

Damn, Raph, you can still conjure up one hell of a picture. If only you would realize that Shanghai vision *in a game*, instead of the same ol' kill-n-loot-with-better-polys...

I'm doing my best from the bleachers, but a starter like you could *really* shake things up, if you dared to.

Hey, if you let your hair down, we'll climb up and rescue you from the Tower Of The Man, you so you can rescue us back ;-)

10.

Btw, since Terra Nova aspires to be the Crooked Timber of MMOGs, any mention of Thomas Friedman deserves a link to this.

I am in awe.

11.

Raph conjures up a back alley Internet Café, but let me describe one of the many Internet Cafes operated by one of the biggest operators, the telecom companies.

These more upscale cafes are generally strategically locate in more affluent residential areas, usually in the local second-tier mall or on the corner of a busy street.

The one I have been to is in a nice & new (they are all new) mall complex in Xiujaihui. This district is on the edge of the city center and is the local shopping area of Shanghai with a mall dedicated to computer stuff. This area is vastly different from the Madison Avenue of Shanghai and the relative location in NY would be Broadway from Macy’s towards downtown.

This particular mall is not the computer center, but a standard mall with shops on the lower floors and restaurants/cafés in the higher floors. The café is strategically located next to a large local bookstore chain on one side of the mall, making them a media duo.

As Raph indicated, it costs very little to rent computer time or to play the online games, but is in line with local disposable income and living expenses. As credit cards and credit payments are still relatively new, game cards (similar to phone cards) is the standard payment method.

All in all, it looks like a suburban internet café run by the telcos. It looks like what Verizon or any US telco would setup, but with dimmer lighting. I’m conjuring up a dimmer Radio Shack as reference to décor.

OK, this café is not targeted to the cash-poor youths of Shanghai, but is targeted to fashionable young adults in their 20’s and 30’s with jobs and higher disposable income. They are also the main buyers of virtual goods.

So here's the summary of the virtual good chain in China. Waring: this is a sterotype and is not wholly representative:

School kids farm and sell virtual stuff to pay for their gaming. Young adults (most male) buy these items to get bragging rights in and out of game. And they'll even brag about how much they paid in RMT to get it.

You see the young adults are very upwardly mobile and fashionable. They'll send 2 month wages to buy a LV bag or a Armani shirt. Most live at home until they are married, so they got lots of disposable income to buy status.

Ok, enough for now.

Frank

12.

Damn, Raph, you can still conjure up one hell of a picture.

There's something vaguely disquieting about the phrasing there, as if I were a decrepit has-been who once wowed the crowds with linguistic gymnastics, and today managed a surprising turn of phrase, pity his glory days are behind him, ah well. Jeez, I'm only 33, you know. Still a (somewhat) young punk.

As far as shaking things up... I like to think I've done SOME shaking, else you wouldn't have had that to link to. Don't pull my hair, send money. ;) (Not you specifically, you're a nonprofit, you don't have any probably.) ;)

Frank, yeah, I preferred to conjure up the contrasts, not the more mundane version. China to me is most interesting because of its contrasts--ones which I believe will gradually go away. Right now, outsourcing is a hot topic because inland you can get so much for so little. But the fact is that the country is booming, and over time, incomes will rise everywhere. Already we're seeing that the gains in outsourcing to areas like Shanghai are quickly eroding. It seemed like every well-off guy I met in Shanghai had multiple companies to their name (the people doing Planetside in China are also the publishers of my book in China, for example). Salaries are on the rise. Not to invoke Thomas Friedman TOO much in one thread, but those radical disparities and contrasts are going to get smoothed out.

I've already gotten to see that in action; first time I went to Taiwan, back in '99, it was very different from the last time I went, which was this year. Back then, I saw polluted rice paddies in the shadow of chemical factories, taking in the run-off from the airport. This time, I stayed in the shadow of the tallest building in the world, and shopped at the mall in its base, buying French comic books, Anerican paperbacks, and (almost, but they were too big) Moomintroll toys from Finland. In '99, traffic lights were a suggestion; in '05, I drank fine wine in an expat bar listening to a jazz band that tried and failed to make it in LA.

Never mind China--I'm waiting on India and Latin America. I lived for six years in Peru as a child, missing school because of general strikes and hammer-and-sickle shaped bonfires blazing on the hillsides. Today, the Economist tells me that broadband penetration in Peru is growing at a torrid rate.

13.

> Jeez, I'm only 33, you know. Still a (somewhat) young punk.

I'm 45, Raph. I'm an old punk.

No decrepitude implied.

Corporatude, maybe...

14.

Magicback>School kids farm and sell virtual stuff to pay for their gaming. Young adults (most male) buy these items to get bragging rights in and out of game. And they'll even brag about how much they paid in RMT to get it.

That's really interesting. I know you said it's not "wholly" representative, but could you guess to what extent you think it squares with the 'general' profile of Chinese farmers?

--Aaron

15.

It is much the same in the other coastal cities of China. In Nanjing, I visited several internet cafes, from the stereotypical 16 seat hole-in-the-wall to a 500 seat palace in which one floor of four was reserved for team play and featured two large flat screens and a small amphitheatre for people to watch two teams go at it in Counterstrike or other games.

There was also a special area that cost four times as much as the standard areas, with private rooms and couches for the girlfriends to use while the guys played.

The owners of these places are all worried; three years ago, 60%-70% of play was in the cafes and now 60% of the play is in the home. The owners are trying to make their nut, sell and get out, in many cases.

Shanghai now has a cost of living that is astronomical for the region, on par with Seoul. It is no longer economical to set up shop in that city; people and companies are moving to Beijing and other cities where the costs are somewhat lower.

As in the US, the industry is starting to consolidate, although it still resembles the Wild West and the government is still trying to come to terms with it all. You can expect that overheated market to meltdown and regroup in the near future, much as we've done a couple times here in the US.

So yes, I agree, there is much to be said about China's online game industry, including: "Honey, have you seen my asbestos underwear?"

16.

Ah, asbestos underwear. The hazards of asbestos hasn't quite reach the ends of developing nations :)

The contrasts in rapidly developing countries are quite dramatic. The phrase and ideals of "go west" and "the wild wild west" applies to China, where many are going further west into the more rural provinces.

The online gaming market in China is actually further along the market cycle than the US. The MMORPG segment is already saturated and many are now looking to develop casual games and online mobile gaming.

Frank

17.

Magicback wrote:

The online gaming market in China is actually further along the market cycle than the US. The MMORPG segment is already saturated and many are now looking to develop casual games and online mobile gaming.

You know, I'm not necessarily disagreeing with you, but to speak so authoritatively on something you (and literally nobody) have never seen the whole of is kind of dodgy. You can't know what the "market cycle" is until you've been through it, so there's really no way to know if China is simply branching into a different experience than the West will or if it's "ahead" of the West on the market cycle.

--matt

18.

Magicback>School kids farm and sell virtual stuff to pay for their gaming. Young adults (most male) buy these items to get bragging rights in and out of game. And they'll even brag about how much they paid in RMT to get it.

Aaron>That's really interesting. I know you said it's not "wholly" representative, but could you guess to what extent you think it squares with the 'general' profile of Chinese farmers?

Everyone have their own perception of third-world pharmers, but Chinese pharmers are not much different from anywhere else. The only visible different is the available and utility of labor. A Russian operation looks the same as a Chinese operation, but looks very different from a US operation (if any) given the high labor cost. There are the “sweatshop” operations, but there are also “business” operations. The real difference between the two are working conditions.

I don't have the full picture, but I have identified three groups of pharmers: the freelancers, the industrialists, and the employees.

The freelancers view pharming as a peripheral activity and a way to earn extra cash. Listing and marketing are done online, but transactions are done mostly in person. The buyer and seller will meet at an internet café and exchange cash and items. No Paypal or credit card payments.

The industrialists view pharming as a core business activity and have organized for scale and volume. They can be exploiters, actively looking for hacks and exploits, or essentially following the traditional input-output manufacturing model. Wholesalers and industrialists are interlocked in an symbiosis. Without the scale offered by wholesalers (IGE being the most locally savvy international wholesaler), there would be less industrialists.

Industrials need lots of labor, so this is where the employees come in. Employees are promised steady income and some benefits and essentially view this as a job. This type of job is better than manual labor, but most will move on to a better paying and higher status jobs.

Essentially, if pharming is no longer viable the operators will move on to other profitable lines of business such bootleg Anime DVDs, comic books, Magic cards. The only difference is that the barrier to entry for a pharming business is very low.

Frank

19.

Matt> You know, I'm not necessarily disagreeing with you, but to speak so authoritatively on something you (and literally nobody) have never seen the whole of is kind of dodgy. You can't know what the "market cycle" is until you've been through it, so there's really no way to know if China is simply branching into a different experience than the West will or if it's "ahead" of the West on the market cycle.

It's a personal opinion. I personally think the MMORPG market is China, Korea and Taiwan are more saturated than the US. I say saturated because my impression is that those that could afford to and want to play MMORPG are already playing. The rest are not interested or can't afford it yet.

Disclaimer: all my comments are personal opinion and does not represent or are supported by documented fact. Take it as you will.

Frank

20.

Oh, I want to emphasize that I'm talking about the RPG genre of MMO. I think there are still untapped interest for MMOs like Auto Assault. I wouldn't be surpise if NCSoft localize it this year. But again I think they'll probably see the response in the western market first before making any moves.

my 2 cents,

Frank

21.

I tend to agree that the market in China is saturated already. They have stockMUD syndrome in a big way, as does Korea. Just walking around ChinaJoy will tell you some key facts about the Chinese market:

- it's still mostly Korean games, but that is changing VERY quickly. The government is putting increasing pressure on developing homegrown MMORPGs.

- it's increasingly going 3d. Last year, there were the first DAoC-level 3d visuals on display. I expect that they'll be at modern Western levels soon. There is no shortage of art talent.

In fact, they're much better at character design and branding than we are, in my opinion. Signature characters from MMORPGs were everywhere.

- there's a significant push towards "casual games," just as in Korea. In Korea MMORPGs no longer have the thunder; it's the market segment of "console-style games played via micropayments" that leads now (Pangya Golf, Kart Rider, etc).

- the MMORPGs tend to be less sophisticated in design (and often technology) than the Western games--there's still a design lead in the West. The games tend to be massively imitative, and there's little sense of the past.

22.

Magicback wrote:

I say saturated because my impression is that those that could afford to and want to play MMORPG are already playing.

Surely this is the case in the West too. Do you know anyone who wants to play MMORPGs but isn't due to a reason not involving money?

Raph wrote

The games tend to be massively imitative, and there's little sense of the past.

And this is different from the West how?! ;)

--matt

23.

Matt,

Two key differences in the development of the video games in China and Korea compared to the US is that (1) the game console segment is not a factor and (2) both government nurtured the online gaming platform. In the case of Korea, the ban on Japanese consoles was only lifted recently. In the case of China, people couldn’t afford consoles and go to internet cafes instead (many of which are operated by the government-controlled telcos).

These two factors drove adoption and penetration, which drove the cycle for this segment towards maturity. The 50%+ YOY growth for MMORPGs is mostly gone and is falling toward secular growth of ~10%, which is still respectable.

The development of the trend and market cycle is similar to the adoption of mobile phones in Asia. According to ITU, the mobile penetration rate in the US is ~50%, China is ~20% and India is ~2.5%. Now, if you plot this against other developmental metrics like per capita GDP, you see how much China sticks out in the regression.

Another indicator is when mainstream advertisers capitalize on MMO IP to market their product (which Coke did when they used WoW in their TV ads in China), MMO has hit mainstream.

In the US, I assert that there is still room to win over console gamers. But, the console manufacturers will fight hard to keep the trend toward online gaming on their own platforms and they really dominate and control this market cycle. So, I expect in the US, the market growth for MMORPG segment will still be above secular growth.

However, there is the risk that console and integrated set-top boxes will be preferred access method of online gaming in the US, which will drive toward less complicated and less keyboard intensive games. But, this is another topic.

So the simple answer to your question is different choices available and different ease of access. In this particular case, console gaming trend is a major factor.

Hope this answers you question.

Frank


24.

And this is different from the West how?! ;)

Hmm.... the best way I can put it is that there's a lot of photocopies of a photocopy. The talk I gave at ChinaJoy last year was on having a sense of history--most of the attendees had zero awareness of online gaming prior to the arrival of MMORPGs in China. At least here there's stuff like MUD-Dev, this blog, Habitat papers, whatever.

25.

In fact, they're much better at character design and branding than we are, in my opinion. Signature characters from MMORPGs were everywhere.

Branding maybe, but I disagree with character design. Yes, they do seem innovative to us westerners as they utilize vastly different cultural conventions, but domestically in Asia the archetypes they use are just as tired - it's always the same old androgynous, race-neutral anime glam-rock types.

Of course, I guess this all depends on whether by "better" you mean "more innovative/original" or "more adept at creating commercially successful product."

26.

I agree that they aren't doing anything particularly innovative as regards the character design. The impressive thing is that they are DOING it, and by and large in the west, we aren't doing it at all. Name the signature creature from one of the MMOs in the West, and how you could build a toy line out of it.

27.

Perhaps that can go back to illustrate the dichotomy of designer-built games(which in this thread we have tied to Asian MMOs) and player-built games (Western MMOs.) In MMOs, I don't care for there being interesting NPCs, I want to be the interesting, unique one. A unique NPC in some way detracts from my uniqueness - they (and all other PCs, for that matter) are merely the extras in my personal epic.

Now, without falling too hard on stereotypes, perhaps the community-centric nature that is part of many Asian cultures is at the root of the uniform characters - there is less room to deviate from the accepted norm, as the choices are all made for you. This enhances the uniqueness of the NPCs, which players can rally to/against. Or maybe I'm culturally generalizing too much here. But its fascinating to see the social differences in cultures emerge in digital format in the MMOs they make.

28.

Don't forget about the importance of broadband penetration when it comes to online gaming in S. Korea, which has a higher percentage of households with broadband connections than any other country on the planet. Given the popularity of Starcraft, etc. in that country it's probably not too surprising that MMOG's have really take off. From what I understand it's possible to get a waiver out of S. Korea's mandatory military service if you're employed at a game company making MMOG's. (Similar exemptions exist if you're the only son in a family, for reasons of health, etc.)

Re the "homicidal bunny rabbits with cleavers" comment--I seem to recall reading an article in Gamespot recently about a panel at one of the big conventions which discussed the MMOG market in Asia. One of the experts postulated that Western games would never be hugely popular in the East because of the cultural differences. Korean games, for instance, enjoy wide popularity in China now because the two countries share enough cultural references for the games to be culturally resonant.

29.

Oops, I kind of rambled without a point there. I guess what I want to say is that while Asian RPGs certainly have their own unique idiosyncracies, I don't think that means we should neccessarily instill our MMOs with features from other cultures MMOs just for the sake of their difference. Our MMOs are built around social interactions/expectations from our culture, and imposing another culture onto them, while perhaps an interesting social experiment, might not be the best game choice.

However, I have never designed an MMO before, so this is all armchair design theory from me. :)

30.

Asia has a lot of historical, semi-historical, and fictional characters to draw from. The region has 6,000+ years to refine their characterizations, and would be something Tolken would joyously absorb and adapt if he was a Sinophile. This is in addition to the relatively modern and popular anime and comic book characters.

If you look at the Romance of the Three Kingdom and Nobunaga’s Revenge games, there are a lot important NPC characters with distinct characters with certain renown, which beyond mere reputation could be more important to the East than the West.

Anyway, my point is that there is a long history of character development for both archetypes and additional elements to make these characters unique, thus increase the renown of character and IP value. The innovations come from adapting Western elements that has not made their way to the East.

Second, the reason western MMOs don’t do so well is as Raph stated: players there have no sense of history of Western fantasy genre. Shadowbane failed in Asia on this front. WoW, on the other hand, is successful partly because of Blizzards renown and the knowledge of the back history from playing Warcraft.

So in similar way, I assert that if someone does a faithful MMO of Camelot and add in derivative character/elements/situations found in romance novels and other popular fiction, the MMO will have similar level of mindshare many locally-made MMO in Asia have.

City of Heroes is an example of this strategy, but its only during the last decade that superheroes has hit mainstream mindshare.

Again, Asian historical fiction/history has over 6,000+ years of development.

Frank

31.

Hey! A bell sounded clear as clarion's nasal cavity in my head.

JADE EMPIRE!

http://en.wikipedia.org/wiki/Jade_Empire

I'm really excited about internationalization, and even tho there's gonna be chafing with language crossovers (see Brazilian Internet phenom) and other cultureshocky things, I think it'll be great to learn. I'm of Chinese heritage but Canadian, so I can expect to be thrilled and learn a lot of new things. Or unexpect that, and it'll happen anyway. =^_^=

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