Video games are a hot topic and household buzzword these days, given its market value and size, and their potential growth rate. In the Internet era, video games, online games in particular, are a kind of golden goose in the eyes of many market players. This is why the government of each country has set eyes on developing the video game industry as a next-generation growth engine, considering its capacity of supporting offshoot industries, such as entertainment and digital content industries, as well.
The Korean government, the Ministry of Culture, Sports and Tourism in particular, has set a goal to develop the video game industry as part of its overall policy to develop digital content. While conglomerates and small and medium-sized enterprises have their roles to play in the private sector, government agencies are obliged to provide game developers and market players with administrative and legal support through tax breaks and deregulatory policies. Of course, universities and educational institutions are supposed to do their role as centers to train game technicians and professionals. All told, there is an absolute need to develop this high value-added sector as a strategic industry.
Launch of Global Game Hub Center
Amid high expectations, Game Industry Division of the Korea Creative Content Agency (KOCCA) under the Culture Ministry opened the Global Game Hub Center (GGHC) in Bundang, Seongnam, Gyeonggi Province on June 9. The center will incubate game program firms, develop next-generation game content and solutions, lay the groundwork for global services, train next-generation game technicians, support firms in improving the quality of products, and help them set up test bases through the center.
Cooperation with Microsoft
The ministry conceived the game hub center project after signing a memorandum of understanding with Microsoft Korea in May of last year. It has set goals to carry out 50 tasks for next-generation games, support 300 small and medium-sized game incubation firms, train some 2,000 game technicians, and achieve exports of next-generation game programs worth US$250 million by 2012. Although they have already reached basic cooperation agreement, the KOCCA is still discussing with Microsoft how many more software programs and solutions they will cooperate on.
In order to help the country join the club of the world’s Big Three game developing countries, the KOCCA has agreed with Microsoft roughly on three sectors – incubate game firms, support the development of next-generation games and solutions, and train multiplatform game technicians.
“The center is designed to train 500 game technicians a year for four years and accept a total of 300 game developers into the center’s complex until 2012. In a word, the center is set to train game developers, and provide space and funds for them to develop games,” said Seo Byoung Dae, executive director of the GGHC, in an interview with the Korea IT Times on June 26.
What the Launch of Global Game Hub Center Means
Asked what the launch of the GGHC means to the industry, he said, “Despite its rapid growth, particularly in online games, many insiders of the Korean game industry and experts began worrying about the market saturation in Korea. Since then, the game industry has made consistent efforts to advance into overseas markets. As a result, the entire industry reached US$1 billion in exports as of the end of last year.”
“Under these circumstances, the Culture Ministry and the KOCCA launched the GGHC with a view to expanding the size of the Korean game market, help Korean game firms advance into overseas markets to increase sales, and support them in their struggle to develop technologies for next-generation games, which are a major trend in the global game market,” he added.
As for the prospects of sales and job creation, Seo said, “Through GGHC projects, we expect to achieve sales worth US$360 million and create jobs for about 2,000 people by 2012.” He agreed with the Korea IT Times on the need to improve the competitiveness of the domestic game industry when the monthly asked him what focuses the center will have to secure competitiveness.
The global game market is valued at more than US$120 billion (W140 trillion) per year. This multimedia content industry is growing rapidly at an annual rate of higher than 30 percent. Simply put, it is expanding as a high value-added industry, with huge amounts of sales achieved in video game devices and platforms, such as Sony’s PlayStation 3, Nintendo’s Nintendo DS and MS’s Xbox 360.
Under these circumstances, the GGHC now has a mandate to promote the country’s game industry. He said, “The center will give support to the online game sector, which is enjoying competitive edge in the global market, rather than focusing on any specific sectors. The Korean game industry, the online game industry in particular, really has competitiveness in the global market. To be specific, the Korean online game industry, which has a 70 to 80 percent domestic market share, accounts for a quarter of the entire global online game market.”
According to him, the worldwide online game market accounts for a mere 7 to 8 percent of the entire game market, but the percentage is expected rise to 10 percent by late 2010. The Korean game industry should be ready to grab a larger global market share in the near future. Given the enormous market potential of the global game industry, the Korean game industry as a whole needs to diversify or shift its market focus from online games to other gaming console platforms and devices, while maintaining or keeping increasing its online game market share as well.
Pangyo Techno Valley
The GGHC plans to move into a new building to be dedicated inside a techno park in nearby Pangyo district, a complex of residential and commercial areas northwest of Bundang. When Pangyo Techno Valley, a Silicon Valley of Korea, is completed, many venture game firms, as well as major game developers such as NCsoft, NHN and Neowiz, will be housed in the valley. The GGHC hopes that in the new techno park, it will support as many game developers as possible, so that they can contribute to developing the country’s game industry and its science and technology as a whole, just as Silicon Valley has been doing for the United States.
In an effort to win international recognition and expand its worldwide partnership, the GGHC plans to host its first international technology seminar on next-generation games in November this year. With no details fixed on the international seminar yet, the GGHC considers inviting delegates from the United States, Japan and Europe to the seminar.