“The King of Games”

If Korea’s top hit movie “The Host,” and “Lineage,” Korea’s leading online game, fought it out, who would win?

In terms of sales, Lineage wins an overwhelming victory.

The film earned 55.5 billion won, but Lineage raked in 1.52 trillion won, 27 times more.

Online games, which had been on the periphery of Korea’s culture industry, are surpassing movies in terms of size and profits. However, the game industry has a long way to go in order to be treated as a cultural industry like movies are.

The market size of the domestic game market was over one trillion won in 2004, 1.44 trillion won in 2005 and 1.814 trillion won in 2006. It is rapidly growing as well. The Korea Game Development and Promotion Institute (KGDI) predicts that it will reach 2.195 trillion won this year.

Korea is the top game developer in the global market-

In 2005, Korea ranked first in online games, followed by the U.S. (second), China (third) and Japan (fourth). In terms of mobile games, Korea is third following Japan and the U.S.

The Dong-A Ilbo compared the sales performances of the top five games and top five hit movies in Korea. The outcome was that games prevailed.

Last year, “Cartrider,” a car racing game, had 117,500,000 members, while MU, Lineage and the Maple Story had 50 million to 60 million members. Meanwhile, only four films had more than 10 million viewers.

Games have a big lead over movies in terms of the number of people in the industry and their sales as well.

According to the culture and industry statistics of the Ministry of Culture and Tourism, the number of people in the game industry as of 2005 was 60,000, which is two times higher than the number of those (29,000) in the movie industry. The sales of the game industry (8.68 trillion won) are 2.6 times higher than that of movies (3.295 trillion won).

While the profit structure of movies is a single event, games have the strong point of being able to generate profits continuously. The movie “The Host” was off the screen 105 days after its release. Meanwhile, Lineage, Korea’s top box-office game hit, is enjoying continuous popularity from 1998 until now.

Experts say that movies still gain profits through DVD copyrights and TV broadcasting rights, but the market is almost disappearing as more and more people download movies from the internet these days. The number of video rental shops in Seoul, which was over 3,000 in 2002, has shrunk to about 500 in 2006.

About 2.4 billion won in development costs was spent on “MU,” an online game. It has earned 196.2 billion won for the past five years, 82 times its production costs. Meanwhile, the film “The King and the Clown” cost 7.2 billion won (including 3 billion won in marketing costs) to produce, and made 47.4 billion won in sales, 6.6 times its production costs.

Games are more advantageous than the movies in terms of exports. Games are actively entering into U.S. and European markets. In contrast, Korean movies are having a hard time in the U.S. and Europe due to racial and cultural barriers.

There are lots of obstacles that games have to overcome in order to become a mainstream Korean cultural industry. The biggest one is the prevailing negative image of online games.

Kwon Hyeok-wu, a head of the industry promotion team of the KGDI, said, “It is true that negative images, such as ‘If one does a game, they don’t study,’ and ‘Some people died because they played games too long,’ exists. Accordingly, efforts to improve the image of computer games should be made.”

Computer games are not being thought of well, and investment is not coming into the industry as a result.

Park Jae-min, head of BINEXT CAPITAL, said, “Investment and policy aid are flowing into the movie industry, but as for online games, the world’s top investment sources are wary. That is because policymakers and investors have a low understanding of the game industry.”

In reality, when it comes to movies, people invest only if their scenarios are good. However, for games, where ideas are the key to their success, investment is possible only upon their completion. This is making the fortunes of new and small-sized game developers financially difficult.

The industry thinks that insufficient investment is the main reason for a decrease in the number of games in Korea’s game contests.