With the number one gaming sites in both Japan and China, and a search engine that commands over 70% of the Korean market, NHN
are nothing short of an online powerhouse in the East Asia region. At the end of July, the company announced their move into the US market, as part of their plan to take their business worldwide.
The company’s first US venture is ijji.com
, a gaming website that was first previewed at the end of August. The site offers content aimed at a social gaming market, with like Golf King
- all of which are free to download and play, with the company deriving profit from micro transactions.
The business model and target audience has already been praised by analyst Michael Cai, Director of Broadband and Gaming with Parks Associates, who notes that “a company, like NHN, that addresses the needs of gamers looking for socialization opportunities as well as fun games could well be positioned to capture a new middle market, which represents more than half of the gamer population and strong growth opportunities.”
Gamasutra spoke to NHN USA Marketing Manager Richard Chae about the company’s business model, and their scope for success within the US market.
What was behind the decision for NHN's move into the American market?
As you know, NHN Corp. has experienced a great deal of success in several Asian markets. NHN has established itself as the first online game destination in Korea - also branching out to Japan and China. Currently we have over 170 million registered users in China alone and rank No. 1 in the Korean and Japanese online game markets. We are hands down the global leader in the online, social gaming segment.
NHN USA’s primary target is the social gamer. We believe there is a massive untapped segment of these gamers in the United States. These “social gamers” play games on a leisurely basis and are looking for a place to socially interact online. The U.S. gaming industry is focused on the hardcore and casual gamers, but neglects the middle segments that make up most of their market. This is our area of expertise and we have the experience to target these important segments along with the casual and hardcore audiences.
With NHN's notable presence in the Asian market, do you feel this sets the company up for a similar run in the US? What changes have been made to your marketing strategies?
Our success in Asia will definitely play a role in the level of success we achieve here. NHN is not only the No. 1 internet company in Korea, but we’ve managed to successfully penetrate the Japanese and Chinese online game markets as well. Our track record in Japan and China has prepped us for entering new markets and successfully incorporating our services. We are ready to offer the U.S. similar offerings and incorporate all we’ve learned in Asia.
How suitable are the games on ijji.com for American audiences? Have changes needed to be made to any of the titles?
In NHN USA’s Mountain View headquarters we house a large user research center. All ijji games are subjected to rigorous tests to determine what the American users prefer, ensuring they are well adapted for the average American. The ijji site and all of our games go through this extensive testing and are tuned to be custom tailored for the U.S. as a result of these tests. It’s also very important to localize all of our games to give them a look and feel that is right for the American market. NHN’s loyal online gamers aren’t shy and submit a great deal of feedback about our games and services that we regularly incorporate to improve ijji.com as well.
Which section of the American market is the site targeted at?
As I mentioned earlier, “social gamers” are our main target. This untapped segment has no offering that allows them to play games socially and for free. We’ve identified that most of these gamers like to play games for fun, but also enjoy the competition, making our multiplayer games ideal for this audience. We also see that social gamers love to interact and tend to chat with people they meet online, enforcing the community site features of ijji.
Each ijji game is also carefully positioned to appeal to a specific target audience. By offering a wide variety of games ranging from casual to hardcore titles, we feel that we have an online destination for all types of gamers. NHN USA’s goal with ijji is to expand the U.S. gaming market by offering a wide range of games for people that want to have fun without paying the high cost of next-gen consoles or high premiums associated with other online gaming services.
In addition, we offer multiplayer games for the social gamer, but also host casual titles like multiplayer card, puzzle, board, word games and single player flash web based games. We also really branch out by offering more serious sports, fighting, action and first-person shooter multiplayer titles. We feel like we’re perfectly positioned to grab players from the broad U.S. audience by offering games from all genres – there is something for everyone on ijji.com.
What kind of a presence has NHN set up in the US?
NHN USA is a subsidiary of NHN, incorporated as of July 2005. We have opened up our USA headquarters in Mountain View, California and intend to be serious players to the U.S. for a long time. Our management has the expertise and experience to make this happen in America. We currently employ over 65 employees and run all operations out of our headquarters located in Mountain View.
Our global CEO Beom-Su Kim and former NHN Games CEO Tae-Sik Moon have relocated to the U.S. to ensure the success of ijji.com.
Has the company considered American developed content for the site?
As of now our games are developed in Korea. In the future we would like to incorporate American developed titles. Nothing is planned yet, but we have a dedicated publishing team always looking for new games to bring to our site.
What other titles can we expect to see from the site?
Currently we have a wide range of multiplayer casual and flash games available. We also offer some more serious titles like Golf King
, already playable on the site. The beta versions of Gunster
and Pocket Masters
are also set to go live this month. Other types of games that we will be releasing later this year include a fighting action title, a first-person shooter and a variety of other games we’ll talk about soon.
In regards to Gunbound - since the game has already had an English language release by Softnyx, do you expect it will attract new users on ijji.com?
This game has been serviced in the U.S. and we acquired the license to help raise the awareness of ijji online. We took this game and revamped it to offer a good amount of new features as well. Our Gunbound
players also branch out to play many of the other games being hosted on our site. These players and newly registered users have been very vocal to express their excitement for upcoming games to come.
Can we expect pay titles on the site in the future, or will the content remain free to download?
All of our games are free to download and free to play. We are planning to implement our successful item based sale model we established in Asia several years back. This “micro transaction” business model was developed by our Global CEO, Beom-Su Kim in the early phases of NHN Korea. Since then, this model has become a proven business model for online game companies worldwide; we see similar trends starting to take place in the United States.
Has the micro transaction model been proven to be effective in the Asian market?
This model is very effective in Asia and successful even in the game console driven market of Japan -- last year in Korea alone, we generated over $96 million (USD) in revenue.
Do you expect the same strategy to succeed in the US market?
This strategy has intrigued the American game industry for some time now. We’ve noticed quite a bit of built-up interest and awareness right now in the United States. We are confident we can succeed with it in America, just like we have in Korea, Japan and China.
We’ve also found that it gives the average gamer options. If a player wants to spend money they can, without draining their wallets. It’s the perfect solution for ordinary people that have fun playing games but are hesitant to invest heavily into a next-gen console or game.
Will we be seeing in-game advertising, or website advertising?
Those are some of the things that we are open to and looking into, but nothing has been set at this time.
Who do you feel your main competitors are?
We don’t see companies such as Pogo, MSN Zone, Yahoo! Games and similar sites as competitors. For the most part, they only serve the casual segment of our target audience, and these sites don’t offer the social interaction ijji does. We are offering players a whole new online destination -- ijji will change how online games are perceived in the future.
What does ijji.com offer that other casual gaming sites don't?
NHN games are unique in that they are built for the new broadband era. Unlike ijji’s potential competitors which focus on narrow band, dial-up services, ijji.com provides much higher quality graphics and deeper levels of game play. Put simply, ijji games look better and play better – you won’t see the same types of games on our competitors’ sites. We feel that this level of depth allows ijji to appeal to a much broader audience.
Our games are also designed to play with or against others, unlike these other sites; our games are multiplayer and create a different game play experience. This multiplayer functionality allows users to play with or against friends; competitive game play creates more competition and more reward for winning.
In addition, we know that ijji.com can cater to the casual gamers, but it will also appeal to the social and hardcore segments as well. It is essentially an online playground where gamers can go to interact with friends and meet new people online, while playing a game that they all enjoy.