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Interview: Nexon's Kim On Western Expansion, Cultivating A Dedicated Audience
by Brandon Sheffield [PC, Console/PC]
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August 11, 2010
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South Korean-headquartered MMO developer and publisher Nexon is best known for its Eastern-developed free-to-play online games, such as the popular RPG MapleStory and the action-based Dungeon Fighter Online.
Recently, Nexon has broadened its development efforts in Asian markets, and has acquired several Korean development studios including NDoors and GameHi. The company’s U.S. branch, Nexon America, localizes and publishes Nexon’s games, bringing the free-to-play model that was popularized in Asian markets into the West.
Despite Nexon’s push to release games in the North America, where it grossed $45.5 million in 2009, the company no longer develops games in the West -- though expanding into new markets is clearly one of the company’s primary goals.
Gamasutra had the chance to sit down with Nexon America’s vice president, Min Kim, to discuss the company’s expansion into Western markets, creating a core audience out of casual players, the difficulties of bringing online games to North America, and Nexon’s future plans for stateside development.
Nexon's been growing and making more acquisitions as of late. How big do you want to grow?
Min Kim: A lot. (Laughs) It’s all a bit about growth. I think right now we have a pretty established level of dominance in the Asian market with our games, but in the Western markets, it's still pretty nascent. We represent probably about less than ten percent of what we do over in Asia.
But even when you look at the Korean revenue, international is getting bigger and bigger. I want the North American office to do hopefully thirty percent of global revenue. That's where we'd like to be; hopefully we'll get there.
By when?
MK: That is a really good question. It will be in the next couple of years. We showed three titles at E3: Dungeon Fighter, Dragon Nest, and Vindictus. The reception and the change in perception of free-to-play games have been pretty good.
I've noticed that you didn’t show every game you had at E3 or Comic Con this year, just specific, targeted stuff. It gives the impression that your games are mostly core-oriented. Why are you keeping your games so core-focused right now?
MK: The core market represents a lot of potential for us. People ask us, “Oh, I thought you came out with really light games like Maple Story. Isn't this a step in a different direction?” Aesthetically, the games' playstyles are different, but for our games, we want to get a casual user and turn them into a hardcore user. We start making money when they actually become hardcore.
We think we have games that gamers really want. The reason why we brought these three games out specifically is that we're looking at them as cousins. Dungeon Fighter has a retro arcade style, Vindictus is made with Valve's Source Engine and is a really beautiful looking game, and Dragon Nest is really charming.
But all three games are action games, and Dungeon Fighter, because it's pretty much the biggest game in the world, gave us a lot of confidence that gamers actually want instant gratification in an online action game; these games are actually going to provide that.
How about the media perception? Most of the time, traditional game press think free-to-play models and monetization are bad. How has it been working against that perception in the media?
MK: It's hard to do it with one company. (Laughs) Perceptions have been kind of hard because, again, our business is something that's not easily describable. People don't really understand it. But you look at companies like Turbine, and they turned Dungeons and Dragons Online into a free-to-play game; now people are scratching their heads saying, “Why is Lord of the Rings Online turning into a free-to-play game?”
It's obvious. What matters is that it makes more money. On the business side, people are starting to understand that. But the press doesn’t cover us. The gaming press doesn't really cover us because we don't play in the area that they play in.
How has the reaction been to your core games at these shows?
MK: Pretty awesome! Everybody's loving it; we got nominated for best MMO of E3. It’s like everything that's going on these days; you don't want to have a walled garden. You want to play where the people are, and so we brought it to them.
With Dungeon Fighter, others have said there were some potential issues with speed and lag in North America. Have these issues been overcome yet?
MK: Yeah, everybody knows that we've been working on it for a really long time, but we don’t want to make certain things official until we've addressed them. We've addressed a lot of it, so our user numbers have been pretty good for its official launch. We addressed that, plus a couple other things, and I think the game is looking really good right now.
When you've got a game that's already successful elsewhere, how well does it have to perform in the U.S. to be considered a success?
MK: There's the other question that people have been asking me: “What games do you bring over here?” Generally, we want to bring the games that have low levels of beta, so we bring all the big games like Dungeon Fighter, Vindictus, and Dragon Nest over here. But in terms of user figures, Maple Story's been a huge success; our revenues last year were forty-something million dollars. If I really had to peg a number to it, an online game would be a success if it generated over a million dollars a month at least, and had the potential for way more.
If you're doing something to test the market, does it actually have to be financially successful, or can it be an experiment? Dungeon Fighter is so popular everywhere else that if it doesn't do amazingly well here, it's not going to kill anybody. I'm talking about cost of operating in another territory versus what you're getting back.
MK: At the end of the day, it's all about numbers; so the game has to be profitable. If it's creating a big loss, then we'll probably shut down that game. But there is room for experimentation. There are no guarantees, especially with this market over here; just because it works there, it's not necessarily going to work over here.
Every launch we do is really an experiment. When we come out with Vindictus, that's going to be an experiment because the game will be awesome, but there are probably going to be challenges when launching that game here in terms of network infrastructure and all of that. Everything that we bring out is really a challenge, but you have to hope for the best, work your ass off, and hopefully it works out right.
Do you find local American content like Dungeon and Dragons Online and Lord of the Rings Online to be major competition for you?
MK: This is definitely not a cop-out answer at all: Anybody that's jumping into this space really helps us. It's hard to build a whole market with just one company, unless you're Apple. (Laughs) But every company that comes in and develops for this market we feel is growing the market; we're not really fighting over players at this point.
All those companies coming in, and it probably means that developers are going to shift focus and actually create an industry and not just one or two games that do really well. Right now, we don't see anything as really competitive; everything that is being made specifically for free-to-play and microtransactions just helps grow the business as a whole.
Do you foresee any reason in the future to develop in North America again?
MK: Yeah. I think we probably made a pretty bad impression with the Vancouver studio shutting down, but when that happened, the market influences were pretty bad for the whole world. (Laughs) Ultimately, we do really feel that domestic development is where it's going to be at once people understand what we do. Our team has also done the Nexon Initiative where we've called for submissions.
At the end of the day, the aesthetic and the cultural influence is everywhere. Developers are going to know what people want here, and at the end of the day, that's what we'd like to do. That's the publishing model we'd like to be in. Right now, we're just taking games from Asia, localizing them, and popping them out here; we'd actually like to look for developers to invest in.
Do you think that will be the next acquisition spree for Nexon?
MK: North American developers? Yeah, we'd love to find some guys with the right DNA, whether it's through acquisition or investment. We're looking for them, and if they're interested, they should call us!
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Why 'bite the hand that feeds you'? MapleStory IS "hardcore" for those who've been dedicated players for years, yet it seems the focus of Nexon is elsewhere as of late. As such, GMS MapleStory has more glitches, hackers and problems in-game than ever before. Rather than investing in acquisition or creating more games, try spending some money on servicing the greatest money-maker you own before it goes under... because we assure you, those players will not follow Nexon on to their "next big thing."
Just sayin'....