Backed by record-high sales, Netmarble vows ‘pre-emptive’ strategy

The founder of mobile game company Netmarble said Tuesday that Korean game companies need to take the initiative and begin developing new games early in order to stay competitive against Chinese game makers.

On the same day, the games giant revealed its sales for 2017 reached a record high of 2.42 trillion won ($2.2 billion) mainly driven by the global popularity of its latest game product, “Lineage 2 Revolution.” Sales jumped 61.6 percent on-year, the company said in a regulatory filing, while operating income soared 72.9 percent on-year to 509.6 billion won.

During the “Netmarble Together with Press” event, the company showed plans to expand further, citing how although the top-ranking companies in major mobile game markets -- including the US, Japan and Korea -- are mostly homegrown, foreign companies are quickly expanding their presence in these markets. And many of those companies are Chinese, according to Netmarble founder Bang Jun-hyuk.

“Chinese companies have acquired the capital to aggressively enter into foreign markets. Until now, we have told ourselves that we have maintained the advantage when it came to game development, but that’s no longer necessarily the case,” Bang said. “In certain cases, Chinese companies are coming out with games that can hold their own against major global game companies.”

When compared with Korean companies such as Netmarble, one major advantage that Chinese companies have is speed. “Chinese companies can develop and release a major game in one year,” Bang said. “Being globally competitive in terms of development speed means that Chinese companies are able to react quickly to changing trends and take an early market share.”

To stay competitive, Bang said that Netmarble is taking a “pre-emptive” approach that would develop foundational strengths to allow Netmarble to respond to new trends earlier than Chinese companies.

The pre-emptive strategy includes measures such as expanding Netmarble’s platforms beyond mobile to include console and online Steam games; developing Netmarble’s own intellectual property, such as characters and stories rather than relying on licensing; developing artificial intelligence-powered games using Netmarble’s AI service engine Columbus; and creating new genres of games by integrating with other types of content such as dramas and K-pop.

As part of the strategies, Netmarble will be releasing a so-called cinematic game called “BTS World” in the early half of 2018 in collaboration with the boy band. The game, in which users become managers for BTS, will include exclusive music and drama clips featuring BTS members.

“Technological developments have grown to the point where it has become possible to mix two or three types of content well,” Bang said. “This type of integration is good in terms of providing fresh new content for users, and also in terms of expanding the market. ‘BTS World’ is an experimental project for us that will bring us a lot of experience and know-how. We plan to continue challenging ourselves to do things like this in the future.” 

The company, meanwhile, is also looking to expand its presence in the North American market in 2018 through role-playing games.

“As you can see from our game lineup this year, we have a few games that target the North American market,” Bang said.

“In China and Japan, role-playing games are the major market. But that market is still small in North America, and we want to open that segment.”

Games that are set to be released this year targeting the global, and in particular North American market, include “Firstborn Kingdom Come” and “Phantom Gate: The Last Valkyrie,” which are strategy games that include role-playing elements.

“In order to pioneer a new market, it is important to allow users to slowly learn about RPGs by including role-playing elements into non-RPG games,” Bang said.

Last year, Netmarble acquired Kabam, the company behind the game “Marvel: Contest of Champions.” The partnership helped bring Netmarble’s blockbuster game “Lineage 2: Revolution” to the Western market.

According to Tim Fields, CEO of Kabam, the two companies are currently working together on a new game that is still under wraps.

In addition to North America, Netmarble also plans to target Japan, the second-largest mobile game market in the world, using games that are specifically tailored for Japanese gamers. Noting that the top 10 game publishers in the Japanese market are all homegrown companies, Bang said that localization would be key for that market because Japanese gamers have “a totally different gaming culture.” 

Games lined up for 2018 targeting the Japanese market include “Teria Saga,” “The Seven Deadly Sins” and “Magu Magu.”

By Won Ho-jung (hjwon@heraldcorp.com)