Paper Abstract - Jai Kim, Jay Chung & Tae Kim

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ABSTRACT

Foreign Market Entry Strategies of Korean Online Game Developers

Jai Kim, Jay Chung & Tae Kim

Game industry has long been popular in Japan. We can observe a list of leading Japanese console game makers including Nintendo, Sega, and, as a late entrant, Sony. In Korea, notwithstanding the popularity of the console games, virtually no Korean console game developers can be found. Along with the advance of internet, however, a growing number of Korean firms have concentrated their efforts on PC and online games. Two local developers, NC Soft and Nexon, head the list. NC Soft is arguably the most famous developer and 'Lineage', the firm's best selling game, has been developed to provide a multi-lingual system since its inception. Since its initial launch in the domestic (Korean) market in 1998, after a two-year development period, Lineage was a huge success. Lineage is a massive multiplayer online role-playing game (MMPORPG) where players from different regions and countries can enjoy the game using the internet. Players can compete with others with strategies and tactics like network games.

Players, with their own characters, show their emotion and feelings. The interface of lineage is so simple and intuitive that players can be devoted and further addicted to the game with ease. Lineage users thus form a large number of communities, possibly the primary advantages of the game. As of the end of 2001, over three million people now subscribe to the game, with 200 thousand logged on at the same time. Subscribers have paid approximately US$ 20 per month to keep their characters intact and NC Soft is forecast to make over 40 million in profits in 2001.

Extant literature on international business has long covered the issue of foreign market and its relationship with cultural differences between the host and the home countries. As a game developer, NC Soft acknowledges that its offerings including Lineage are culture-bound. In its selection of entry market, NC Soft first targeted at Taiwanese market, taking the cultural similarities with the region into account. Lineage has successfully penetrated the Taiwanese market. In a year since its launch, about 80% of the game users in Taiwan have played the game. Lineage was then introduced to the U.S. market. Since the U.S. is the biggest market in the world, NC Soft has ambitiously established a wholly owned subsidiary 'NC Interactive' in the U.S. to dominate the market.. NC Soft's Lineage has competed with a host of best selling games including EA's Ultima Online, Microsoft's Esheron's call, and Sony's EverQuest. The launch has not thus far proved successful. Lineage has around 100,000 users with 1,000 simultaneous users at peak time. NC Soft has launched Lineage to Japan in December, 2001. This late entry reflects the tough competition NC Soft will face in the Japanese market, a lead market in the computer game industry. NC has allied with Softbank, Japanese media giant, for division of labour: NC Soft provides game software and know-how, as well as technical support; Softbank will provide marketing and advertising expertise.

This paper aims to address the success factors of online game lineage in Korea and Taiwan as well as the reasons for failure in the U.S. We discuss about the entry mode selection strategies and then standardization and localization strategies of NC Soft in different foreign special reference to cultural (and psychic) distance.

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