Korean Company Creates Xbox Hit for Microsoft

David’s Victory over Goliath –

The company Phantagram has 20 employees, which is very small compared to its global competitors in the U.S. and Japan with hundreds or thousands of employees. This small-sized company was first recognized not domestically but abroad. At the end of 2002, the U.S.’ Microsoft (MS), which makes the game console “XBox” with hundreds of billions of dollars invested, was searching for a suitable company to make good games.

Phantagram met MS’ requirements as its recommendations were already verified in the U.S. in 2000 with the computer game “Kingdom under Fire.”

Its sequel “The Crusaders” sold more than 450,000 copies, and in 2004 it reaped the second largest revenues among Xbox games. The top rank went to “Halo,” recording sales of more than 10 million copies, but “The Crusaders” was a bigger profit-maker with four billion won invested for development costs and marketing.

The secret of “The Crusaders’” success was a paradigm shift to integrate different kinds of games into one.

“The Crusaders” is a new form of game, which combines strategy-focused games like “Starcraft” and action games into one.

Upbeat with the success of “The Crusaders,” MS, together with Phantagram, is currently making “Ninety-Nine Nights (N3),” a next-generation game console for the Xbox360 by investing more than 16 billion won.

Games Have Been Everything –

The CEO of Phantagram, Lee Sang-yun (34, photo), managed to make a game “Daemaseong” for eight-bit computers in 1988 when he was a sophomore in high school and has been deeply into games since.

At that time it was thought that playing with computer games was merely done in dim “arcade game rooms.” It was “bizarre” to make games back then. Just like other students of his age, he decided to enter college, and he entered as the top student of the department of mathematics at Han Yang University, but he found it uninteresting. At last in 1994 he dropped out of school, and with five of his friends, he established a game company. It was the beginning of Phantagram.

The company targets advanced gaming nations such as the U.S. and Japan instead of the small domestic market overwhelmed by illegal copies and with a small number of gamers. As a result it made “Zyclunt,” the first game to be exported to Japan in 1996, and was able to advance to the U.S. market in 2000.

Mr. Lee said, “It is only temporary for Korea to be recognized as a game pioneer. Soon the competition with foreign competitors will be much fiercer,” adding, “The competition is meaningless without a technology to outrun the leading companies abroad.”

Sang-Hoon Kim sanhkim@donga.com