SE Asia, Gaming and the Future of MMORPGS

So I've been catching up on some required reading, to wit, the entire corpus of the slides from the first Austin Game Conference. Too much fabulous stuff to list here, so let's pick one at a time.

The reading for today's sermon is from John Lee, Director Corporate Development and Strategy, Softbank Corporation, and is an "Overview of the NE Asia online gaming market - China, Japan and Korea". As we've noted elsewhere, as outsiders it's hard to get a handle on what is happening in the gaming world in SE Asia. Of course there's the standard texts and commentary which, understandably, are almost always about South Korea, PC baangs, and Lineage.

Lee's overview covers Korea, Japan and China, and this latter market is the most interesting one for me, since I've seen so little on it. Some personal highlights:

• 68M Internet users and counting
• Similar dynamic to Korea in 1998, principal usage in PC cafes, not household
• Primary users in inner China, where no alternative forms of entertainment exist
• Average Chinese Internet user spends 14 hours a week online, 8 hours of it gaming
• Concurrent usage for #1 game in China is currently 800,000 users!

Apart from the numbers, I'm interested in the nature of the gaming in SE Asia as against the US. Clearly there are differences in the communal nature of the gaming (in PC baangs or PC cafes) and also in cultural differences between these Asian countries and Western countries. At the risk of being ridiculously coarse and ludicrously coarse-grained, the US (and to a lesser extent) emphasizes the individual as an atomistic, independent actor, whereas the asian nations tend to emphasize the individual as an actor within a community. This goes some way to explaining why Lineage and other MMORPGs that emphasize communal action are so successful in Asia, and have struggled in the US.

Bruce Woodcock, Mark Jacobs and Dave Rickey note that eventually the US market is going to feed off itself (though they differ on when it flatlines) and so the developers are going to need to look to new markets. If these markets are in Asia, what is the future of MMORPGs?

Comments

[Dave Rickey]

1.

The Asian market continues to mystify me (and just about everyone else). The basic cultural assumptions seem to be so fundamentally different that it's not even explainable. The only comfort is that the US market seems to be equally impenetrable to them, *nothing* crosses the Pacific in either direction (UO in Japan seems to be the sole exception).

Every explanation I've seen or come up with seems inadequate, only touching the edges of some much more fundamental divide (yes, I realize you weren't trying to be definitive).

--Dave

[Edward Castronova]

2.

When business types ask me whether this phenom can really go big, I say "Look, everyone has dreams. There's a game for everybody." That line of reasoning, though, has to respect the awesome diversity of human dreams. There may be a game for everybody, but it will take the industry decades to flesh out its offerings. Game by game, world by world.

Now, if culture is overwhelmingly powerful in determining the kinds of dreams we want to live, we should expect that the initial pallette of offerings will be very different in different cultures.

There will eventually be a richly diverse map of alternative realities out there. It makes sense that the early East Asian and Amero-European make-believe worlds don't translate. They're speaking to different dreams.

[Jia Ji]

3.

China is probably the largest future market for online games. At the Austin conference there was lots of buzz about it, with almost all the major players trying to establish a strong foothold within China as soon as possible. PC cafes are very prevalent everywhere now, even in somewhat rural area. I remember the last time I was in China (summer of 2002), I was surprised to see a gaming cafe right next to the farmer's market of a very agricultural area.

A few things stand in the way though. China is becoming increasingly strict about the regulation, licensing, and censorship-control of PC cafes, with most nowadays requiring some sort of ID check-in rather than the previous anonymity users were accustomed to. Also, foreign companies coming in suffer a great disadvantage due to cultural clashes and China's business policies. So far, only South Korea companies have had success and that's only because they were the first to tap the MMOG market in China. Now that Chinese companies are aware of the potential profit to be made, they are mobilizing quickly. Here's a translation of two recent articles in the mainstream Chinese press:

Korean Companies Dominate Chinese Online Gaming
"Online games developed by South Korea (SK) currently dominate the Chinese gaming market, with more than 70% market share. However, the industry experts estimate that the trend is changing fast, predicting that the SK market share will drop to 40% by end of this year.

Why? Because the SK developers are too greedy and overly confident about their dominance, not paying attention to the repeated requests from the game operators to lower developers' share (as much as 44% of the revenue) and to provide effective tech support. Now, the Chinese game operators are trying, with encouraging results, to break free of SK dominance. A few big operators are buying game development companies in Japan, Europe, and US to develop their own games. Also, some native companies are developing "home-grown" games, expanding their market share.

It's reported that the current business model is:
1) SK developers develop a game at a cost of 1 million USD.
2) SK charges game operators 0.3 million USD for exclusive rights in the Chinese market.
3) SK collects 27% to 44% of the game's income. As a result, SK companies normally recoup their development costs within the first year, and make huge profits for the remainder of the game’s life cycle, which usually lasts 2 to 4 years.
It's reported that SK game industry is poised to surpass its automobile industry to become the #1 industry in SK.

The Chinese cannot take it any more. Now, they have experience, technologies, and more importantly, the money, to change the situation."

Home Grown Chinese MMOG Launches
"On 9-20-03, Jinshan, a huge software development company in China, released its first MMOG - Sword Fighter (Jian Xia Qin Quan). Jonshan is also the game operator for this MMOG.

On the first day, they had more than 200,000 registered players, with roughly 20,000 online playing concurrently. Jinshan's goal is to enable 100,000 online concurrently this year, and one million by 2004.

Jinshan spent 15 million Yuan (about 2 million USD) in 3 years to develop the game. The company hired over 10,000 game managers (GMs), spending 10 million Yuan (1.3 million USD) to launch the game. By end of this year, they will spend another 150 million Yuan (19.5 million USD) in maintenance and operating costs."

Just quickly reread the last paragraph. Yes, 10,000 GMs at a cost of about 2/3rds of what they spent to develop the game. That’s 1 GM per 20 registered players, but since only 1/10th of their registered accounts play at the same time, they can maintain a 2 to 1 ratio.

Which makes me wonder, what do all these GMs do? They can’t all be for just customer support. Perhaps, they’re actually providing custom tailored content for players?

And if you’re wondering how they can afford to hire so many GMs, consider that they’re only paying them 100 Yuan (about $13 each) and they could be basing that “payment” off just giving them free game accounts.

Hmm…looking back I probably posted too much and should clear up some of my thoughts/points. Maybe I’ll repost something similar on GGA later.

[Dave Rickey]

4.

This reminds me of a bad joke at a design meeting:

"We don't need to build an AI system, we'll just hire India."

"You mean you want to outsource the AI programming to India?"

"No, we'll just hire India. The whole country, it's cheaper."

Maybe the joke is on us? Ten freaking *thousand* GM's? At launch? I can't even comprehend that.

--Dave

[justin]

5.

Thanks for a fascinating thread. The discussion here has considered business issues; I want to take exception to one part of Dan's original post:

"the US (and to a lesser extent) emphasizes the individual as an atomistic, independent actor, whereas the asian nations tend to emphasize the individual as an actor within a community"

If we look at Lineage, there was definitely a heavy emphasis on Blood Pledges and other sorts of clan and small group allegiance and combat. But the gameplay of Lineage and many of the other MMOGs coming out of East Asia totally lacks a Healer/Cleric class as best as I can tell. In Dark Age of Camelot or EverQuest, there is typically a member of the party whose job it is to buff and heal people - a supporting role. In Lineage and Nobunaga's Ambition Online, etc, it seems that role falls on players, who use the trusty old red potion/blue potion to heal themselves.

Maybe my cursory market evalutations are inaccurate in this regard. But I've had them loosely confirmed by Korean gamers. Either way, I'm curious about what role playing rules and small party dynamics say about social groupings in these different gaming markets.

[DivineShadow]

6.

"But the gameplay of Lineage and many of the other MMOGs coming out of East Asia totally lacks a Healer/Cleric class as best as I can tell."

Hadn't realized this. Very interesting... This does match up with at least Kenjitsu/Kenjutsu combat (Kenjitsu: The art of the sword -real ones-, and not to be confused with Kendo: The art of looking like Darth Vader wielding a bamboo stick). In Kenjitsu there are no real blocking/dodging moves, as it was taught to me it was considered that any move you made in blocking was a move you were not making in attacking, and by dodging/blocking you were putting yourself above your master. A definite no-no.

[UnggiYoon]

7.

There is a mistake in the title.

Korea, Japan and China are belong to NE Asia, not SE Asia which includes Philippines, Indonesia, Malaysia, Singapole etc.

Many Chinese gamer(to speak frankly laborer)being employed by Korean in-game item traders, log into Lineage and pre-occupay gold mine, dungeon, hunting field then work all day long for earnig low wages.

The foray of these chinese woker is a hot issue in the Lineage, Now...

the most popular MMORPG is Ragnarok. the recipe for success in Japan is told that Ragnarok is oriented to community cooperation not personal achievement like lineage, and also Ragnarok adopt cute SD charater which many Japan gamer traditionally favored.

Recnetly, the Lineage 2 which armored with UnREAL full 3D engine beefs up system for in-game community.

[Dave Rickey]

8.

"SD Character"? I understood everything but that, I think.

The employment of Chinese workers by Korean traders, is they working for real world payment or in-game payment?

[UnggiYoon]

9.

to Dave Rickey

SD means Super Distortion (Big head and small body like baby. SD characters are the an Atom, SuperSonic and Super Mario bros, etc.

The Chinese worker get real money.

At first these sweatshops emerge in Korean PCbang. Then, they move into China and employ cheap chinese workers. Most of wokers are reported as student.

[Unggi Yoon]

10.

And One of the reason the sweatshop move into China is that a Korean govermnet agenncy (the commission of youth protection) designated the item trade site like Itembay, OKitem etc as medium hurtfull for youth last year.

So they advert to cheap and young workforce in neighboring nation.

The designation or stigma by the commission is being disputed at the administative court in Korea, now.

[Dave Rickey]

11.

I am living a science fiction novel. A bad one.

[Edward Castronova]

12.

We should all reflect on the comments of Unggi Yoon and Jia Ji. The Asian phenomenon absolutely dwarfs what is happening here, in magnitude, importance, and acceleration. It also seems to be completely unstudied.

Friends, we are looking around here under the lightpost, but our keys are over there in the dark.

Therefore, I'd like to ask all readers: If you are a PhD student without a topic, please listen carefully: GO STUDY ASIAN MMORPG GAMING! PLEASE! NOW!

If you do, you will soon be writing things that raise hackles on the necks of people in boardrooms, think tanks, and command posts across the entire world.

[Spencer]

13.

I just want to tell all gamers of a brand new 3D interactive online GOLF game that can be downloaded for FREE from http://www.goldenfairwayfx.com/sjm.

Just follow download instructions.
The game has :-
- 3 courses (more being introduced).
- 3 skill levels.
- live 'real time' text box so players can chat whilst playing.
- multiplayer, play with others and watch their shots 'live' from all over the world.
- tournaments for cash prizes.

Game has really good graphics and superb features.

Download it for FREE and tell everyone you know to do it too!!!

Have fun.

Spencer.

[William]

14.

I just discovered this post and thread while looking for material on Korean/Japanese gaming cultures, and I and upon reading John Lee's interview, I began to think about the design of Final Fantasy XI, and how one design decision in particular - the forced separation of players onto random servers at the beginning of the game, making it impossible to start of by playing with your friends - directly services the Japanese market.

Lineage was dominated by South Korean Blood Pledges who coordinated their efforts against other players - and often, with particular relish, against Japanese players - by working together in PC Bangs. John Lee notes that the Japanese online gamer is more likely to be playing alone at home; breaking up the dominance of the PC Bangs means the home-alone player can get a leg-up with alliance made entirely online.

An interesting case of cultural factors in design: the motivation for this decision was completely lost on the American market, which resented being unable to play with their friends from the outset.

[Ender]

15.

I too happened upon this thread while looking for info on video games in SE Asia. I'm currently an undergrad studying abroad in Thailand. I'm hoping to do some research on video game culture here, including Ragnarok. If anyone has any suggestions please email me.

[Asia]

16.

Actually it's not even NE Asia coz it doesn't exist.

It's East Asia.

[Tony MacKelworth]

17.

I have been looking in vain for an English version of the Webzen v Itembay case.

I am writing my final year dissertation on Virtual Property and looking for some really dynamic solutions to 'balancing' the interests of participants in virtual worlds. Really trying to look to the future on this one and it looks like S.Korea is already there! Please..Please can someone find this!

So If any of the comitted academics on Terra Nova can find Webzen v Itembay (Or a really good analysis) It would be invaluable.

Kind regards,

Tony

[hikaru]

18.

Hmmm, a huge lack of actual SE Asian MMOG info, so I wanted to provide some.

I recently visited Vietnam a few months ago, and in Vietnam, they essentially only play one MMOG in the PC cafes: Vo Lam Truyen Ky -- http://volam.com.vn/

Vo Lam is locally published by VinaGame -- http://www.vinagame.com.vn/ -- run by Viet Kieu (expatriates who've come back after the economic policy shift). The game itself is set in mythical ancient China, and the tech specs/look-feel are similar to Lineage. Vo Lam is so pervasive, "online gamer" pretty much means Vo Lam player. I've spoken with people who never used a computer before who've heard of Vo Lam.

VinaGame is in the process of localizing/publishing Ragnarok Online for Vietnam. Press release with business model info found at http://www.vinagame.com.vn/news_050908.html

In Vietnam, like Korea, PC cafes are everywhere. The majority of gaming is done on PC's instead of consoles. Broadband can be found on virtually every street in the big cities, and even in the smallest one-street towns I visited. Per capita income is miniscule -- roughly US$500 annual -- so only the rich have PC's/broadband in the home. And even there, the PC's are terribly outdated. WoW has junk for min. reqs., but even the best PC's I saw couldn't run WoW. There are some small specialty cafes for the hardcore gamers which have the latest graphics cards, but they're unique instances, and only in major metropolises like Ho Chi Minh City and Hanoi.

Like the rest of Asia, virtually everyone has cell phones, though they don't really use cell phones for email or gaming (though SMS usage is huge compared to the States). From what I saw, IM/chat rooms are more popular than online gaming in these PC cafes, easily 2-1.