Field Trip to Korea Summer 200

Field Trip to <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> Summer 2002

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A Focus on the Game Industry

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Background:

<st1:country-region w:st="on">South Korea</st1:country-region> is the world’s 25^th most populous country with 48 million people with over one-quarter (12M) of them living in the city of <st1:city w:st="on"><st1:place w:st="on">Seoul</st1:place></st1:city>. These two stats leave <st1:country-region w:st="on"><st1:place w:st="on">South Korea</st1:place></st1:country-region> with the fourth-largest population density in the world. There are roughly 25M Koreans in <st1:country-region w:st="on">North Korea</st1:country-region> and 2.5M in the <st1:country-region w:st="on">US</st1:country-region> and <st1:country-region w:st="on">Canada</st1:country-region>, with about 1M in <st1:country-region w:st="on">Russia</st1:country-region>, 1M in <st1:country-region w:st="on"><st1:place w:st="on">Japan</st1:place></st1:country-region>. There are scattered communities of Koreans elsewhere in the world, with more Koreans living in Central and South America than in <st1:place w:st="on">Europe</st1:place>. The number of Koreans living in <st1:country-region w:st="on"><st1:place w:st="on">China</st1:place></st1:country-region> is debatable with significant populations of Koreans of at least 2M Koreans. It came as a surprise to me to learn that <st1:country-region w:st="on">South Korea</st1:country-region> is actively repatriating Koreans from <st1:country-region w:st="on">Uzbekistan</st1:country-region> and helping replenishing their agriculture labor supply as all the South Koreans are headed to <st1:city w:st="on"><st1:place w:st="on">Seoul</st1:place></st1:city>. The South Koreans as a whole are actively seeking reunification with the North Koreans.

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Real GDP growth has been about 9% in the last couple of years currently at $16,100, overall economic output is about 1/4^th that of Japan – with a population just about 1/3^rd the size of Japan. Pretty good numbers for a country that is still developing.

Language:

The Korean language is very straightforward to learn, and is most likely the easiest of the eastern languages. The Korean script – Hangul – has the distinction of being the world’s only scientifically designed writing system in widespread use. In the 1440s the King of Korea charged his science advisors in finding a writing system the common folk and women could use, as the king was concerned about the elitism caused by having only the nobility and monks capable of writing with the Chinese characters. The advisors scoured <st1:place w:st="on">Asia</st1:place> for four years and told the king that there was no suitable language that fit his requirements for ease of mastery. The king then told the advisors to derive a wholly new one. Two years later in 1446, Hangul was introduced. Hangul requires about 11,000 entries in the Unicode standard, yet at the same time I only needed about two or three hours on the plane ride over to learn how to read Korean. The grammar is very similar to Japanese grammar with all sentences ending in the verb, and most sentences going Subject – Object – Verb.

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Up until the current generation educated Koreans would also study Chinese characters, the current generation shrugs off the Chinese characters and is proud of being Korean. However, all Koreans have a small vocabulary of Chinese characters due to constant exposure to signage and commercial brands, much like Spanish in the <st1:country-region w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region>. However, any American who takes a year of Chinese or Japanese will be likely to know more Chinese characters than a Korean of less than 30 years of age.

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I have previous experience with Japanese and the slightest of introductions to Mandarin; I have no changed my mind and will be pursuing Korean in full force and will follow with Mandarin as I see the opportunities in that order.

Weather:

The weather is much like the east coast of the <st1:country-region w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region> with a set of four seasons, with cold winters beautiful springs and falls, and miserably hot and humid summers.

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Smog was not really an issue in <st1:city w:st="on">Seoul</st1:city> despite its population of 12M and was reminiscent of the smog levels of <st1:city w:st="on">Los Angeles</st1:city> rather than <st1:city w:st="on">Mexico City</st1:city> or <st1:city w:st="on"><st1:place w:st="on">Taipei</st1:place></st1:city>.

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The city of <st1:city w:st="on"><st1:place w:st="on">Seoul</st1:place></st1:city> is constantly in a state of construction and renovation. Considerably more visibly prosperous than <st1:city w:st="on"><st1:place w:st="on">Taipei</st1:place></st1:city> – and more nationalistic with prevent displays of the Korean flags. Many nature paths that run along streams crisscross the city and act as jogging paths. Apparently Jimmy Carter jogged through <st1:city w:st="on"><st1:place w:st="on">Seoul</st1:place></st1:city> one day and now millions of Koreans are jogging.

Food:

Yes Kimchi is a big deal. There are even oversized, low-sided refrigerators sold in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> that are Kimchi refrigerators. These reminded me of the freezers Americans used to keep in the garage. All meals in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> are served with Kimchi. I find Kimchi on the whole either boring or disagreeable with a few highlights. Notable the fried rice in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> with the Kimchi spice and nori is quite tasty.

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Sushi costs about twice what it costs in <st1:city w:st="on"><st1:place w:st="on">Los Angeles</st1:place></st1:city> and the proportions are about half the size, and finally the quality of preparation and the taste is worse. Leaving <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> not the place to eat sushi. It was no surprise in retrospect for Koreans to warn me about the sushi as early as the plane trip on the way over.

Hotels:

There are many great hotels. I found that the service even at a 3 or 4 star hotel far outshined anything I have experienced in the <st1:country-region w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region>. Service in <st1:country-region w:st="on">Korea</st1:country-region> is outstanding as it is in most of the East Asian cultures as the service industry is staffed with folks who in the <st1:country-region w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region> should be doing something more productive than wearing a funny costume and gloves and waving people through the individual lanes to the parking garage at the shopping mall.

People:

<st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> is one of the most homogenous countries in the world with very little racial distribution of permanent residents. In fact, in 6 days I could not identify a non-Korean who looked likely to be a resident of any duration.

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The flip side of this is that the Koreans appear to me to be one of the more friendly places in the world. The men stand closer to each other than American standards and the women will hold each other’s hands in frank, but non-sexual friendliness all the way through adulthood, unlike other East Asian cultures like <st1:country-region w:st="on"><st1:place w:st="on">Taiwan</st1:place></st1:country-region> where only girls hold each other hands. Indeed boys through grammar school will hold hands and occasionally high-school males will grab another young-adult’s hand to lead him in a new direction. Again, none of this is any display of anything more than friendship, but most westerners would be shocked to see this open affection. The crowds in the malls on Monday and Tuesday afternoons exceed the discomfort level of shopping in the holiday rush season in the <st1:country-region w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region> – I fear a Saturday afternoon at COEX or Lotte World.

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Cell Phones

All Koreans of all ages have cell phones with magical properties compared to US phones: great color displays, MP3 players and even integrated cameras. The number of cell phone vendors in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> is uncountable probably second only to PC rooms.

Game Playing – the PC Room

PC Rooms are everywhere in Korea – I saw more PC rooms than any other type of business with the possible exception 7-Eleven and LG convenience stores. There are over 30,000 PC rooms with the vast majority in <st1:city w:st="on"><st1:place w:st="on">Seoul</st1:place></st1:city>. To get an idea of how many PC rooms 30,000 PC rooms take a moment to visualize all of the world’s McDonalds restaurants and put them into <st1:city w:st="on"><st1:place w:st="on">Seoul</st1:place></st1:city> – you would still come up short, as there are only 20,000 McDonalds in the world[1]!

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The PC rooms vary from dingy, dark places with a dozen stations located on a random floor in a building, to the outstanding PC room in the COEX department store with over 200 stations, large staff, a restaurant, and chairs sporting dual-independent ergonomic back rests.

What do they play?

• Korean RPGs

• Counterstrike

• Blizzard games <o:p> </o:p>

  I found it very interesting to see that it was NOT our American, Blizzard games that the Koreans play so much, but rather the Korean RPGs are number one with Counterstrike being markedly more popular than the recently released Warcraft III.

What is the consumer behavior?

The PC rooms download all of the latest games, drivers and patches and maintain the game playing machines. The user walks into the room and rents the machine and simply clicks on the icon of the game they want to play.

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How about online subscriptions? The PC rooms pay a site license of $100 per fixed IP address and the consumer rents that IP while they stay at that station. Thus, it is trivial for a person living in <st1:city w:st="on"><st1:place w:st="on">Seoul</st1:place></st1:city> to whack some monsters from home in the morning, whack some more at lunch at the nearest PC room, and whack some more after work or after school in some other part of town.

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Broadband is rolled out to the residents of <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> like tap water with something like over 90% of the households with PCs having broadband.

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This causes the Korean customer to be one of the pickiest consumers in the world. They always download and play before they buy. Packaged games are very weak in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> with only the very largest brands like Blizzard doing real money. The amount of money generated in online subscriptions is truly awe-inspiring with a rumored $6B USD annually from Koreans, Taiwanese and coastal <st1:country-region w:st="on">China</st1:country-region> – this $6B market is owned by the Koreans with no significant product from <st1:country-region w:st="on">Japan</st1:country-region>, Europe or the <st1:country-region w:st="on"><st1:place w:st="on">United States</st1:place></st1:country-region> in the online game market other than the free to play Counterstrike. Everquest is now being heavily marketed in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> but will be in my opinion a big flop as the Koreans already have a half-a-dozen or so more technologically advanced RPGs to choose from with large established player populations.

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The consoles: PS2 and Xbox will make no measurable impact in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> in my opinion. The PS2 is already for sale with a few dozen titles being sold with mute enthusiasm from the vendors. But it comes back to the PC. The PC is dirt cheap in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> with all the components being manufactured in the domestic territory and extremely convenient with the well-maintained PC rooms and fat bandwidth to the home.

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If <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> represents the future with a territory of fat bandwidth, high casual user piracy, cheap PCs and a highly networked society, then I feel that the consoles themselves may be enjoying their last golden age. As consumers may refuse to plop down $50 for what they see as a bunch of static data with no service; the future of games I believe is service orientated, rather than product orientated.

Government and Games

The Department of Cultural Affairs has a Game Development and Promotion Institute. This is a cool place, publishing a bunch of market reports on the game industries throughout the world with focused papers such as <st1:country-region w:st="on">Poland</st1:country-region> and <st1:country-region w:st="on">Russia</st1:country-region>, <st1:country-region w:st="on">Japan</st1:country-region>, and <st1:place w:st="on">North America</st1:place>.

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The Institute maintains a current library of the world’s games on all platforms, all magazines, and all books. Even a modest science fiction and fantasy library is provided as reference material.

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Incidentally, my host in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> Mr. Hong is a founding board member of the Institute and former President.

Game Development

Game development on the whole is very similar to North American development with the small independent shops working in tougher conditions, with less financial and temporal resources and the publisher’s employees working in better spaces with larger teams and more resources.

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In particular the price for rent is about the same as it is in <st1:city w:st="on">Los Angeles</st1:city>, in a place where salaries are roughly ½ - to 1/3^rd what they are in <st1:city w:st="on"><st1:place w:st="on">Los Angeles</st1:place></st1:city>.<o:p></o:p>

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The typical game developer with two to four years of experience will make between $14,000 and $18,000 a year, with more experienced or senior developers reaching perhaps $20,000 a year. Artists and programmers make about the same amount of money.<o:p></o:p>

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Koreans put much more emphasize on design than Taldren does, with roughly ¼ of total staff being on the design team. However, project planning is considered a design task – something I like.

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Koreans are used to working in spaces much too small for western standards. The high-end publishing group uses 80 workers to a floor in bays of very low-walled cubicles where everyone can each other’s faces. In the less prosperous studious they literally have six developers working in a space I usually put one developer.

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The workweek is 44 hours long with the last four hours traditionally put in on Saturday. Most game companies interpret the workweek as nine hours a day Monday through Thursday and eight hours on Friday.

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Design documents are large and thick like a phone book for even more obscure titles. Interestingly, English is used quite commonly in design documents and email and English is considered a more formal language for business and design purposes. Especially UI layouts will be written in English, and localized back into Korean as a later stage in development.

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The Korean programmers consume much more programming books than their <st1:country-region w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region> counterparts and seem to be as a whole extremely ambitious. These programming books are furnished by the companies small and large upon employee request.<o:p></o:p>

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The artists range considerably in quality with the stronger artists working at the publishing companies. It appears that artists are celebrated more in <st1:country-region w:st="on">Korea</st1:country-region> than in the <st1:country-region w:st="on">US</st1:country-region> by always receiving the latest hardware, and the programmers receiving the art machines rather than the other way around as is common in the <st1:country-region w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region>.

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Code quality seems about the same as the <st1:country-region w:st="on"><st1:place w:st="on">US</st1:place></st1:country-region> with basic competency in Object-Orientated design and C++. UML is unheard of so far in game development.

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Game Books

Every possible book on technology published in the world is published in Korean. In fact, at Incheon International airport I saw dozens of game programming books for sale – imagine seeing Michael Abrash’s books for sale in LAX!

Game Publishing

Game publishing in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> revolves around the online games. Packaged games are dominated by Hanbitsoft and perform weakly compared to online so not that many publishers pursue packaged goods. Of the packaged goods that sell are AAA North American games as well as AAA Taiwanese and Chinese games that feature Asian historical material.

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There are ten game magazines in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> all of which have production values far exceeding US magazines with circulations of only 50,000 or so. Each time the consumer purchases one of these magazines in the store they receive something free like a CD or a book. I ended up with a bunch of nicely packaged Everquest clients and a Warcraft III hardbound brochure (!?).

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The typical online game in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> goes through these stages: Development, Closed Beta, Open Beta, and Release.

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The <st1:country-region w:st="on">US</st1:country-region> is familiar with Development, Closed and Release – but the concept of open beta is different in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region>, and again I think an indicator of the future in the ROW. During Open Beta, the game would is releasable condition for US markets, but the Koreans see that there are not enough players, so they release the client for free (no paying for a packaged good at the store) and run the player counts up to a high threshold. All this time the game has been running at a deficit, and then when the count of players is sufficiently high, they then demand payment and immediately lose about 70-80% of the players.

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This is financially acceptable as there are about two-dozen MMORPGs running profitably with the 6^th most popular game with more subscribers than Everquest.

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A large alternative financing market has become attracted to the MMORPG in <st1:country-region w:st="on"><st1:place w:st="on">Korea</st1:place></st1:country-region> with almost any good up and coming MMOPRG able to get bridge financing in the form of $1M USD upon reaching closed beta.

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[1] http://www.mcdonalds.com.au/insideMcDonalds/GlobalHistorical.asp

Originally posted on LiveJournal