Korean Game industry is worried about cutting back on development due to falling investment
Korean Game industry is worried about cutting back on development due to falling investment
  • Dan Yoo
  • 승인 2019.02.11 11:50
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Korean gaming industry faces a crisis of cutbacks in new game development and industry-wide stagnation due to falling investment. 

According to data from the venture investment information center on Feb. 6, venture capital in the gaming sector accounted for only 4.1 percent of new investment in 2018.

Although percentage of game industry's investment was 10.7% in 2014, it has been decreasing for five consecutive years since 8.1% in 2015, 6.6% in 2016 and 5.4% in 2017. 

The industry is concerned about the decline in investment, especially in the gaming sector, although the content market is steadily growing.

The government's excessive regulation policy is the primary reason why investment in the gaming sector is shrinking. 

The Ministry of Gender Equality and Family is subject to mandatory shutdown and 1 percent sales of the gaming industry.

In addition, the Ministry of Culture, Sports and Tourism's selective shutdown system and webboard game regulation, the Ministry of Education's cooling-off system and the Post-consideration system on youth-use games, and the Ministry of Health and Welfare's Game Addiction Act are examples.

As risks for investments increase due to tightened regulations, it is more difficult to find investors than before." said a representative for a game developer. 

It is known that many small and medium-sized game developers do not receive investment in time and end their business.

Some point out that the sluggish gaming industry is not necessarily due to domestic regulations. 

As small and medium-sized game companies in charge of the ecosystem disappeared, it is also a problem that only large companies are surviving.

Fact that small and medium businesses are passive in development due to MMORPG's strength is also contributing to sluggish investment.

According to a market survey report, RPG accounts for 67.2 percent of total mobile game sales.

Including Lineage M, all games that have been ranked among top 3 in Google Play for the past year are RPG, with 33% of sales ranking 1 to 3. 

However, as the development of MMORPG takes a lot of time and manpower, it is not easy for small and medium-sized businesses that lack capital to challenge development.

As Chinese-made games are being imported continuously amid the vacuum in the development of Korean-made games in recent years, the anxiety in the gaming industry is growing.

Major game companies such as Joy City, Kakao Games, Webzen, and Gamevil are preparing to publish Chinese games in Korea soon. 

As the Chinese game is similar to the Korean users' tendency and its popularity and competitiveness have already been verified, the popularity of the game has also increased. 

"The government should lift restrictions and actively seek ways to help the gaming industry amid mounting difficulties," said the Korean game industry.


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