Trade deficit in IP hits record low on PC, mobile game boom

South Korea’s trade deficit for intellectual property rights reached an all-time low during the first half of this year, fueled by increasing demand for computer and mobile games and the consequent boom of franchising rights and copyrights, central bank data showed Tuesday.

The country’s trade loss in the intellectual properties account stood at $600 million as of the end of June, down from $910 million a year ago, according to preliminary data released by the Bank of Korea.

This was the lowest deficit tallied since the BOK started to compile the corresponding figures in 2010, officials said.

Of the half-year total, exports accounted for $6.67 billion while imports countered with $7.27 billion, data showed.

The decline of deficit was mostly attributable to a rise in computer programs and software copyright fees, an amount which soared from $140 million to $540 million during the cited period.

The progress in the game industry consequently boosted the services sector in general, which turned to profit with a surplus of $340 million, rebounding from the $430 million deficit a year earlier.
 

The manufacturing sector, however, saw $910 in deficit, almost double from the $490 million in the previous year.

Also, foreign-invested small and medium-sized enterprises recorded a record-high trade deficit of $1.7 billion, due to increased copyright fees paid to foreign information technology developers and trademark fees to renowned sports brands.

Benefiting the most from IP exports were conglomerates, which in total recorded a record-high trade surplus of $480 million.

“Despite the considerable fees paid to foreign license holders, the computer and mobile game industry here has achieved the largest surplus ever,” said Choi Jung-tae, director of BOK’s Economic Statistics Department.

The fact that some game-related SMEs have acquired conglomerate status -- such as Nexen and Netmarble -- also contributed to the fast expansion of the local industry, the official added.

By country, the largest deficit in IP came from trade with the United States -- $2.11 billion, up from $1.83 billion from a year earlier, while trade with China resulted in a surplus of $1.6 billion.

By Bae Hyun-jung (tellme@heraldcorp.com)