The Korean Market – Masters of Mobile Gaming Monetization

The Korean Market – Masters of Mobile Gaming Monetization

As TestBird enters G-Star, Let’s look at a brief summary of the Korean mobile gaming industry today and the companies that are involved. Today we talk about making money in the Korean market in the mobile game space.
South Koreans are known to be one of the biggest spenders on mobile games in the world. NewZoo’s research estimates gamers average spending is about $290 on mobile games every year. This is the second most in mobile only being beaten out by Japanese gamers spending $312 per year.
So bringing your game into Korea and making money might be a great idea. But it’s best to know how this country became the “King of F2P”, why paid games failed and to tips to help you in your monetization strategy.

History of Game Monetization in Korea

In the early part of the 20th Century, Korea has been a poor country as three major wars had been waged in the country. As the country rebuilt, a trend started that I find in many poor countries with access to new technology, software piracy becomes very rampant. This has been seen in other countries in Asia, Eastern Europe and Africa. Pirated Famicom games from Japan were the early examples of game piracy in Korea.
From there, PC games became the next victims and with new game companies in Korea starting up, a fear that they would be next began discussions on many different new ideas on better ways to monetize than traditional brick and mortar purchasing.
Subscriptions were the first major monetization that Korea used to gain customers in the early 2000s. This allowed players to play games catered to Korean players and brought in a lot of money for developers. China followed the success and even brought Korean games like MU Online to China. Though this worked well, smaller companies thought there were other ways to improve their revenue.
Some companies in Korea started to experiment with the idea to make the game free with paid mini-payments, allowing players to spend small amounts of money for items that improved gameplay. This had been popular in Asia as one Japanese mobile game in the early mobile years would allow you to place your virtual fishing pole in different areas of Japan for the day, had become the top mobile game in the country. Players would receive an SMS telling them they had a catch and needed to reply back to reel in the fish before it got away. The company would make money by having players pay to place their rod into new places every day.
Free online PC games using the new “micro-transaction” model began to compete in mid 2000s with huge success. MMORPGs, Tamagachi breeding, and racing games began to pop up everywhere with big cash flow. F2P was born and was here to stay.
Korean phones were especially great as these small payments would be paid by users on their monthly carrier bill. The game purchases would be included like a 1-900 number is included in western phone bills. This trend started to grow as better and more powerful phones came to the country and continues with the iTunes Store and Android Play Store.

Advertisements or Micro-transactions?

Unless you have a very heavy game (i.e very deep gameplay, high graphics) or popular IP, you’ll have a very hard time selling a game with a price tag. None of today’s top 100 grossing apps according to App Annie that are in iTunes and the Play Store are paid games. Then where do we go? Traditional advertising from the west, or the tried true way of micro-transactions of Korea or both?
Traditional Advertising is still used today in South Korea. But advance techniques are needed as traditional banners are no longer relevant to these savvy gamers. Vungle, a video ad agency with offices in Korea says 99% of revenue is going towards in-app purchases. Though they believe video pre-roll and post-roll and other video advertising placed into the game will work as many have 3G or better internet already available in their phones.
I can agree that pre and post roll videos have great potential in Korea with connectivity very high in the country and low cost to use it. Though be careful, Korea is already hit with ads everywhere and ad fatigue may set it. A new idea Vungle and others are doing is incentive video ads, allowing gamers prizes or free in-game money towards viewing ads on their phone.
For micro-transactions, Korea has it down to a science on what people are willing to pay for their items and interaction in a game. Developers will need to be very aware of pricing and may need specialized help for the market. Traditionally, items purchased in gameplay have been extremely cheap, but have a high use. Use this to your advantage as a difficult game with $1 health potions will do far worse than a hard games with $0.10 health potions.
Dressing up a character or specialized high use items like swords or cards are seen to allow the same pricing seen in the West and at times exceed the West. Take a lot of time and study when choosing payment pricing when coming to Korea.

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