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If you enjoy reading this site, you might also want to check out these Think Services sites:
 Game Career Guide (for student game developers.)
 Indie Games (for independent game players/developers.)
 Finger Gaming (news, reviews, and analysis on iPhone and iPod Touch games.)
 GamerBytes (for the latest console digital download news.)
 Worlds In Motion (discussing the business of online worlds.)
 Game Set Watch (the Group's alt.game weblog.) |
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WIM Summit: Cross-Cultural Success
by Christopher Woodard
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February 20, 2008
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Based in China with over 400 staff, Virtuos is one of the largest providers of outsourced production services
to the games industry, specializing in 3D Art, Animation, Co-development, Engineering and QA.
Its international
management team is led by Gilles Langourieux former Founder and Managing Director of Ubisoft China Studios and
backed by Legend, the number one IT group in China. Since its creation in late 2004, Virtuos’ clients include
leading developers as well as 14 of the top 20 games publishers worldwide.
Website: http://www.virtuosgames.com
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On the second day of the Worlds in Motion conference at GDC, Nexon America’s director Min Kim gave a talk concerning the many obstacles to overcome in bringing a game into different markets.
The First Graphical MMO?
Beginning with a general overview of the company, he described Nexon as “the global leader in online casual games.” Established in South Korea in 1994, they are actually responsible for the world’s first graphical MMORPG Kingdom of the Winds, developed in 1995.
Since then they’ve turned into a company that “grossed $250 million in 2005... has over 1,600 employees [and] 15 plus games in service globally.” Explaining what led to this success, Kim categorized Nexon’s products (which include the popular Maple Story) as “Fun and social... subscription free... free to download [and have natural] mass market appeal.”
He went on to point out that over 86% of that revenue came from virtual item sales, “That’s Nexon’s primary revenue source... give the social experience away for free, and generate revenue by enhancing that experience.” adding that this model allows you to approach the user whose not willing to pay $15 a month and in addition get a user who may be paying $20 a week.
Kim then went into detail on Nexon’s general expansion strategy that helped it be successful in North America, a region in which many other similar companies have failed. For every market they consider they do a general assessment including “average household income... the price of goods and entertainment... the history of gaming in that market... and internet infrastructure and cost” Explaining that when Nexon first considered North American distribution in 1997, the internet was primarily a tool for e-mail. “No one was living in the internet.”
Licensing vs. Self-Publishing
Concerning the decision between licensing versus self publishing, the main questions they ask are “How big is the market? What is the future of [that] market?” or even “Is there an existing market? Is there a qualified publisher? Do we understand the culture of that market?”
If they decide to license there are even further considerations. Among these is to create dynamic/dedicated teams to manage the relationship, allocate development resources to successfully develop the relationship and to check for any possible competitive or complimentary products being produced by that publisher. “Because if they want to, they can bury your product.”
Case Study: Maple Story
Looking more specifically at Nexon America, Kim discussed the phases it went through with Maple Story. It was originally serviced remotely from South Korea starting in 2005. Even then it was considered “kind of an experiment.” the English translation they created wasn’t originally intended for the North American market but rather to help the translation into other languages, as translating from English is easier that translating from Korean.
But simply getting the game into English wasn’t an easy task. Nexon does some translation internally, but they also outsource. “When we outsource to other companies we [sometimes] get things that don’t make sense. The language is fine, but is has no relation to the game.” He then gave an example of game dialogue that was delivered to them from a translation company, “The diligent in Erinn, that is myself, I don’t know why but decreasing my stamina due to be hungry.” The final and correct dialogue eventually read “One day after a long day’s work, my stamina dropped low and I became hungry.”
They officially commercialized Maple Story for North America in the fourth quarter of that same year via a PayPal subscription service. In summer of 2006 they set up their American offices for local service of the game.
Game Cards, Microtransactions, Fraud
In January 2007 they launched their highly successful prepaid Nexon card, which Kim sees as “an important milestone to becoming a North American publisher.” Originally available at Target stores, they now have expanded to several other franchises in 20,00 retail locations including; 7 Eleven, Best Buy, Rite Aid, CVS and others. The importance of this is directly related to that fact that “Over 510% of our player base does not have direct access to credit cards.” adding that it is also a helpful means of combating fraud.
“Revenue is scalable in microtransactions, but so is fraud.” In South Korea, registering for Maple Story involves using a social security number, heavily reducing fraud. Privacy concerns being what they are here, it is something they could not do in North America. So the amount of fraud they encountered in the North American release of Maple Story was on a scale they had not had to deal with before. “I know a lot of companies that can’t do credit card business [anymore] because of too much fraud.” According to Kim, this essentially expelled these companies from North America.
Nexon’s response was to create a team dedicated to combating fraud. Some of what the team implemented was to set spending limits on users, educate their user base on signs of fraud, created internal systems for dealing with fraud and joined the Platinum Members list in the Merchant Risk Council. “Not many of you may have heard of it... basically it’s a huge conference that happens once or twice a year with all the huge companies... [the conference] basically gives you a road map on how much to spend on protecting against fraud.”
He concluded with what he considered the most important design philosophy for any online experience, “there’s no end to areas for improvement.”
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