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Interview: Nexon's Dan Kim Says Free-To-Play Success Comes With Time

Interview: Nexon's Dan Kim Says Free-To-Play Success Comes With Time

March 24, 2010 | By Brandon Sheffield

Daniel Kim is Nexon America’s new CEO, who just started in the company's Los Angeles U.S. HQ last spring.

Prior to that, he worked out of the Seoul headquarters, and before that, for design firm IDEO in Palo Alto. In his own words, “My background actually is in mechanical engineering and product design, specializing in user interface and user experience design.”

Kim had always been passionate about games, since the Space Invader days, he says. Gamasutra had the chance to speak with Kim extensively about the current state of Nexon, from the unprecedented Chinese success of Dungeon Fighter Online (two million CCUs!), to the company’s cash card pull out from Target, to the length of time the company will keep a fledgling online title going before giving up.

Some of Nexon’s biggest successes, including MapleStory, KartRider, and Dungeon Fighter Online originally launched to slow debuts, but as Kim says of the MMO industry in general, “you gotta keep trying.”

Dungeon Fighter Online - Two Million CCUs in China

Do you happen to have numbers for Dungeon Fighter Online worldwide because I've heard that it's bigger than people think.

DK: Well, worldwide, I can give you some of the highlights, which is, you know, it's the game with the most number of concurrent users in the world right now. They set the record at two million concurrent users in China, and it's only possible because it is China. Unless another Chinese game beats that, it's probably not going to get broken. It's been doing phenomenally well. I'm very excited about the prospects here, as well.

Yeah, I heard that from [Nexon America marketing VP] Min Kim, I don't think most people are aware that it was quite at that level on the worldwide scale.

DK: Worldwide, the number of users... It's a big game in Asia. It's very strong. Before we acquired them, we were pretty much neck-and-neck. MapleStory and DFO were the two biggest games, definitely in the top five, kind of competing against each other. They still are competing against each other. And [DFO’s numbers are] continuing to grow.

How do you feel it's doing in the U.S.?

DK: It's doing well. We're really excited about the beta service that's in play right now. We're trying to make sure everything is in stable, polished order. We're very likely going to launch it officially and have an opening launch some time over the next couple of months.

I've heard there have been some lag issues.

DK: We're working on those technical issues, and that's what the beta is for.

Do you think it's because of the infrastructure here compared to Asia?

DK: Well, there is definitely the infrastructure challenge here in the United States versus Korea, Japan, or even China. And the technical requirements here are a little tougher on the developers, so it's taking us a little bit of time to figure those things out.

Facebook and Maple Story

Some of the free to play companies in Korea are looking toward Facebook as well. What about Nexon?

DK: Well, I think, actually, not a lot of the Korean companies are on the Facebook bandwagon yet because Facebook isn't yet so big in Korea. It's starting to pick up. We've actually done more than any other publisher in the free-to-play space with Facebook. We have something like 40,000 Facebook fans for MapleStory. We have over 30,000 Facebook friends for Combat Arms. It's a great communication channel, a way to communicate with our users.

What do you think about releasing games and apps on there?

DK: That's a really good question. That's something that we're looking at also, but it's a different type of game. The social games on Facebook are definitely very popular. We're very impressed with it. It's a space that we're looking at. We just launched MapleStory ITCG in beta.

It's a trading card game, and we made it in Flash so we can port into the Facebook environment as well. It's still in beta, but our plan is to try and launch it officially and have it available for Facebook players to play without having to sign up with us necessarily. That's kind of... I can point it out as one of our first attempts in the browser-based or social networking-friendly direction.

Rebrands and Cash Cards

How is the Block Party site rebrand going?

Daniel Kim: Block Party is a big initiative we're working on right now. We're really excited about it and planning to launch in the first half of the year. It's in alpha right now. We're getting all the backend stuff tested.

Wasn’t it supposed to be out already?

DK: We were originally scheduled to launch this spring, but you know, as typical with development, it takes a little bit longer. We're trying to polish it, trying to get the user experience to be optimal. So, hopefully we'll get to have an announcement pretty soon about closed beta and then open beta service. But the transition definitely is planned for this year.

And have I heard correctly that Nexon was pulling its cards out of Target?

DK: Oh, we have already. They've been a great partner for us, but it's just a business decision in terms of how much the fees were versus other retail distributors. We have a lot of eager distributors and retailers happy to sign up with us, and while Target had a great run with us and we're very grateful for their relationship in getting the business jump-started for us, you know, we decided to go our separate ways.

It used to be there were just like the Nexon cards, and maybe two other things, and now it's a really crowded rack. Does that have anything to do with it?

DK: Yeah, well, a lot of credit has to go to Min Kim for pioneering that space, because the category didn't exist at all before we went into Target. And now there are probably 15 other cards out there. But over time, you'll notice only a few cards actually stay on the racks. There's a lot of cycling of cards. It just has to do with how much business you can bring to the retailers to keep them interested and to keep them stocked up. I think it's a healthy sign for the industry going the microtransaction direction.

You still think that the cards are a good idea in general?

DK: Oh, absolutely. For us, it was a huge boon. We basically doubled our business as soon as we launched them. A lot of our core target audience, they're in high school or college; they don't yet have access to credit cards. So, prepaid cards is a great way for us to connect with those users and give them the kind of freedom to make their own decisions about purchasing.

The Console Space

What do you think about MMOs on the console? Do you think that that's every going to be a reality for Nexon? Only a couple of companies have tried to do it, and it's been okay for them.

DK: Yeah. I mean, that's a space that we've been looking at for a while because, you know, console is still a pretty big part of the industry. Our focus, of course, for us here in the U.S., is really more on the PC online games. But back in the home office, there are definitely considerations for Xbox 360 or PS3.

Actually, for Nintendo, MapleStory DS is I think launching some time this spring, but that's a Korean version only, so we'll see. There's some projects that are in the R&D space for us right now, but for us here in the U.S. in North America, our focus is definitely on expanding our business in the PC space.

No plans to release MapleStory DS in the U.S. yet?

DK: Not yet. Not yet.

Spending actual money and launching an actual DS game in Korea is a very risky venture financially.

DK: Yeah. Actually, it's a joint venture with Nintendo. They really wanted to have a premiere title for the Korean market, and Maple Story, our IP, is one of the strongest. That's why they wanted to partner with us.

I always bother Min Kim about this, but DFO would be a pretty good Xbox Live Arcade multi-user kind of experience. It would work pretty well.

DK: Yup. Yup. I would have to agree. [laughs]

I feel I should tell every Nexon exec I meet. The Xbox version of Mabinogi never actually came out, did it?

DK: Right. The project, I believe, was targeted for Xbox. But, you know, like I mentioned before, that's one of our many R&D initiatives back in Korea. Ultimately, I think the difficulty is to actually work with the publisher because they don't really have a microtransaction model. At least they didn't when we were working on it. So, that was always the struggle where we wanted to distribute the game for free, and the infrastructure just wasn't set up for that sort of thing.

I think it's getting closer to being possible now.

DK: I think so. I think so. We're exploring a lot of different possibilities right now.

The Return of Big MMOs to Korea

I don't know if they all launched yet, but I know that two Gstars ago, Nexon announced a bunch of kind of larger titles like 3D Mabinogi Heroes and Dragon Nest.

DK: Dragon Nest is just launching this week. I think they're going into open beta. Mabinogi Heroes, which we will bring here under a different name, has launched over the last Christmas season, and it's done phenomenally. It has become one of the bigger hits in our portfolio. I think in January, when they opened it and officially launched it, they have over 50,000 CCUs, which is a pretty significant number for Korea.

Anything over 20,000 is considered a blockbuster hit in Korea. And 50,000 is a big number. And it's sustaining and growing, so we're very happy about that, and very excited about the prospects here in North America.

It's interesting seeing some larger games like Dragon Nest launching in Korea again because everyone was kind of afraid of doing that for quite a while.

DK: Yeah. It's a pretty saturated market. But you gotta keep trying. [laughs]

I think a lot of people gained some confidence after Aion did okay.

DK: Yeah. The reality is that it's really about the content. Just because Aion did well doesn't mean you're going to be successful either. We've had a number of titles in Korea that didn't do quite as well when we first launched it, but over the last year, there are some titles that have done better.

How long do you feel you need to keep a title going before you decide whether it's going to take off or not because it takes quite a while to find out?

DK: Yeah. I think a minimum of six months to a year is kind of our typical timeframe that we put the game through. Because online games are quite different, you have to react quickly and watch the audience's reaction. Sometimes when you start out with kind of a rough start, you can cultivate it to hit a tipping point and have a massive success. And we've had that happen on Kart Rider. We've had that happen on MapleStory. We've had that happen on a number of our biggest titles.

So, we're patient with it. There's gotta be milestones and progress checks along the way, but we typically open a game and see how it does. You know, there are internal thresholds for opening the cash shop and going commercial until we have a pretty stable number of users for a particular game.

Even Dungeon Fighter went through that, didn't it? Before you guys bought it.

DK: In the early days, they were struggling like anybody else. Nobody expected them to kind of become the tour de force they've become. We're happy about that title. Certainly, it does take a little bit of time to ramp up. For a lot of these online games, it's true. Very rarely do you have like a huge blockbuster right out of the gate. That's why we're really excited about Mabinogi Heroes.

What do you see as the threshold of users before you can open it... And are you talking about from beta to commercialization?

DK: Yeah. During open beta, you know, threshold is set at different numbers for different games. It really depends on what type of game it is, what we expect out of the game, and how we're going to commercialize it. So, it's hard to give you a hard number. It's not like, "Well, unless you pass 10,000 concurrent users, you don't get to commercialize it." There's not a rule like that. It's customized per each of the game.

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