Learn from South Korea: its $9.16 billion gaming market is just $600M less than China’s and double Japan’s

October 30, 2013 Leave a comment

Learn from South Korea: its gaming market is just $600M less than China’s and double Japan’s

October 29, 2013

by Anh-Minh Do

The total size of the worldwide gaming market is $78 billion. Only 18 percent of that is from the USA, where it totaled at $14.8 billion. As we reported yesterday, South Korea’s gaming market is worth $9.16 billion. That’s just $600 million short of China, which comes in at $9.7 billion for 2012. It is perhaps important to note that many Chinese play PC games at cybercafes, where revenue could be tricky to track. So there is a possibility that the research figure of China’s gaming revenue may not reflect the true figures. Japan, on the other hand, falls at a measly $4.6 billion.What this data says is South Korea is by far one of the most aggressive gaming markets in the world. China’s growth, although deflated, is expected. It’s a population of more than one billion people and as the data indicates, its gaming market grew over 30 percent since 2011. Japan, with a population that is almost three times the size of South Korea with proximal smartphone and internet penetration, cannot seem to squeeze anywhere near the same amount of gaming revenue out of its population. South Korea’s gaming market, which will expect to grow a little over 10 percent by next year, is much more robust.

Although China’s market is bound to pull ahead of South Korea’s market (given projections that China will hit $12.6 billion while South Korea will hit $10 billion) next year, South Korean culture is getting way more bang for its buck. China’s growth is essentially a numbers game, but South Koreans have absorbedgaming into their culture the same way Japan has absorbed anime and manga as a respectable and acceptable part of its culture.

In South Korea, being a gamer is socially acceptable and a path to riches and sponsorship. Great gamers live a cushy life. It’s this that is key to South Korea’s success. Create a culture that makes gaming acceptable and put the money behind it, it’ll pay back exponentially. The cybercafe culture in China, although hard to track, is still not a high profile and acceptable part of mainstream culture. It remains a subculture. Until it makes that transition, it won’t grow to the same status as South Korea.

 

South Korea’s gaming market is worth $9.16 billion!

October 28, 2013

by Anh-Minh Do

Although South Korea’s mobile gaming industry is worth just one seventh of the Japanese mobile gaming market, it remains one of the most healthy gaming markets in the world. It’s on the rise, while Japan’s gaming companies and industries have been on the decline.

A white paper from the Korea Creative Content Agency gives us an in-depth peek into South Korea’s growing gaming industry. The most significant numbers include:

The total South Korean game market is worth $9.16 billion

Total revenue for the domestic mobile gaming market has reached $754 million

The mobile gaming market grew by 33.8 percent in 2011

Top two countries that are importing Korean games include China (38.2 percent) and Japan (27.4 percent)

The average South Korean plays more than one hour of games per day

Online dominates gaming platforms with more than 43.9 percent of the overall gaming market

Role playing is the most played genre of game for South Koreans

For comparison, Japan’s gaming industry grew only 1.2 percent last fiscal year. The total Japanese market is worth $4.6 billion. Whereas South Korea’s gaming market grew by 10.8 percent. As it stands, Japan’s gaming market is facing a number of issues. Major companies like GREE, DeNA and even Sony and Nintendo are suffering from slowing growth.

As the numbers above indicate, online gaming seems to be the clear future for South Korea, especially mobile companies like Kakao which are at the forefront of pushing mobile gaming in South Korea. With last year’s $45 million in revenue, Kakao seems to be leading the charge in South Korea’s mobile gaming market as a messaging platform. And since Android is huge in Korea, the Google Play store has also become a big marketplace for mobiles games to seek for downloads and ARPU.

Filed under TMT Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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