Korea's game exports trebled in the first five years of the new millennium to $3.4 billion in 2005 The following is an excerpted version of a contributory article by Kim Yeongman( Alex Kim), chairman of the Korean Association of Game Industry (KAOGI) as well as CEO of Hanbitsoft...Ed. The nation's game industry, the market size of which had grown to 4.3 trillion won in 2004, a 9.6 percent rise from the previous year, is estimated to have increased by about 10 percent to 4.8 trillion won in 2005. The five platforms of the game industry, in particular, have posted an annual growth rate of 30 percent in recent years, a remarkable feat in consideration of the nation's economic growth of 4 to 5 percent. In the case of online games, the market has emerged as a contents market true to its name by having surpassed one trillion won in revenues. Moreover, the mobile game industry has been rapidly growing in recent years, at about 18 percent, to a 200 billion won market. However, not every sector of the industry has been thriving. Since the market for PC packages and arcade games has seen a downtrend, it has become a major task for the industry to boost the market. Nonetheless, the market for Internet cafes called 'PC Bangs' has already risen to a 1.8 trillion-won market despite its recent stagnation. Moreover, the arcade games market is showing a growth of over 40% recently due to a surge in demand for adult games. Today, the game industry has become a major industry of the nation following a rapid growth to a 4 trillion won market during the past 8 years amidst growing attention, and in accordance with an economic forecast that one of the leading industries in the 21st century will be the contents industry. In the past, the game industry's growth was centered on hardware industries. However, it is certain that high valueadded industries based on contents, knowledge, and information technologies will lead the 21st century. Such a trend can be witnessed in the data of the world economy. Even though it may be a bit outdated, the growth rate of the game industry in 2002 stood at 13 percent while the economy grew by 2.8 percent with IT and semiconductors sectors growing at -2.3 percent and 2.3 percent, respectively. One can infer from this that the importance of game industry has grown further in 2005. Moreover, it is no exaggeration that the game industry on par with the world trend has become a matter of course to be promoted and assisted as a strategic industry in the 21st century. Game Industry Enjoys Continued Growth The game market in 2005 is estimated to have grown by about 10 percent from 2004. In the case of five platforms, it is estimated to have maintained a growth of over 30% while the online games market, which accounts about 63 percent of the game market, is expected to continue its growth due to various factors: increase in PC Bang revenues, game portals and casual games as well as diversification of genres and markets beyond China. Such forecast is derived from the anticipated boost in the mobile games market on account of service expansions by mobile telecom operators and the adoption of high-capacity 3D games along with the ever-growing use of network games and high-powered entertainment devices. In addition, the video games market is expected to make a headway helped by the success of Korean game titles and the supply of over one million gaming devices. In the midst of this, the online service of video games is anticipated to be invigorated due to the market appearance of next-generation video gaming devices. However, the downtrend of PC package games is expected to continue while the revenue of arcade game shops is expected to increase due to the rise in game shops for screen horse racing in contrast to the fall in the production of arcade games. One thing worth mentioning is that games export has jumped to $390 million in 2004, a 124 percent rise from the previous year that far exceeds $205 million in imports. Moreover, it is anticipated to post annual growths of over 20 percent in the next couple of years. One of the Top Three Game Markets in 2010 The game industry has grown from a market of one trillion won in the mid 1990s to a market of 4.3 trillion won in 2004 with about 2 trillion won in production values, $309 million in exports and 43,000 employees in over 2,000 companies and 84 educational institutions. If the industry continues to grow at the current pace, it is forecast that Korea will emerge as one of the top three players of the world's game market in 2010, taking a 5 percent share of the world market as the industry is expected to grow to a 10 trillion market with 86,000 employees and $1 billion in exports. To achieve this goal, the Ministry of Culture and Tourism announced in 2003 a long-term plan to promote the industry and set up the "Strategic Committee for the 2010 Game Industry". In step with such a move, the Korean Association of Game Industry and businesses alike will exert efforts so that the nation can advance into one of the top three players in the game market. Also, I hope people can understand that the game industry today is growing as a pillar of the culture industry instead of a business that can simply be written off as a form of entertainment. Engine of Growth for Digital & Entertainment Businesses In order to bring into limelight the role the game industry plays in nurturing digital and entertainment businesses, one needs to look at the game industry's growth in the cultural contents market and its ripple effects on industries and exports. As I have already mentioned, the world game industry's growth outruns the growth rates of IT(IDC) and semiconductor sales. In addition, the game industry's growth rate of 10.2 percent during the period from 2002 to 2005 has already outstripped other contents businesses: movies (5.7%), music records (1.6%), publications (3.8%), and television (6.9%). Furthermore, the world's game industry is expected to grow with the Asia-Pacific market and online games becoming more important. In 2005, the Asia-Pacific region held a 40% share of the world market along with the expansion of nextgeneration high-speed network and the full-fledged rise in the number of online video games played over the Internet. Korea, the Largest Exporter of Online Games Currently, Korea has exported some 50 online games to 35 countries, and the number continues to grow. This is an example of the world online games market of which Korea accounts the largest share with 36 percent, and with over $1.23 billon in exports. If mobile games were included, the figure could be even greater. In terms of values that could be gained from the export of manufactured products, it is equivalent to the sales of 1.8 million cars or royalty-attached sales of manufactured products worth more than 10 billion dollars. In regard to market shares by platform on the global level, online games are topping the list with 36 percent share followed by mobile games (13.3%), arcade games (2.7%), PC games (2.3%), video games (1%) and others (20.9%). In terms of the game market as a whole, Korea currently holds a 5.3% share of the world market. In terms of export amount, Korea's game exports have continued to increase from $1.3 billion in 2001 to $1.8 billion in 2003 and $3.4 billion in 2005. Among the most representative games that have been exported include Hanbit Soft's Survival Project and WYD, Legend of Mir by Wemade Entertainment, NC Soft's Lineage and Guild Wars, Ragnarok by GRAVITY, Nexon's The Kingdom of the Winds and Kart Rider, Mu Continent of Legend by Webzen, A3 by Actoz Soft, MGAME's Droiyan and Repent, Han Game by NHN, and Gregon Entertainment's Sealonline. The games that are anticipated to attract much attention in the future are Hanbit Soft's Granado Espada, Sunny YNK's Rohan and Webzen's Sun.