The Gaming Industry Soars with COVID-19... Annual Sales Reach 7 Trillion Won, Emerging as an Economic Leader

[Asia Economy Reporter Buaeri] The gaming industry, which has long been treated as a 'minority' sector in Korean society, has emerged as a key player in the Korean economy over the past decade, showing an average annual growth rate of 9%. The gaming industry especially enjoyed a boom this year due to the increase in 'homebodies' caused by the COVID-19 pandemic. Korea's leading game companies, the 3N (Nexon, NCSoft, Netmarble), are forecasting record-breaking performances this year.

The Era of 3N Annual Sales '7 Trillion Won'

According to the gaming industry on the 22nd, the combined annual sales of the 3N are expected to surpass 7 trillion won this year. Nexon is on the verge of becoming the first domestic game company to achieve annual sales of 3 trillion won. Nexon's market capitalization recently exceeded 30 trillion won. It ranks third in the domestic IT industry after Naver (46 trillion won) and Kakao (33 trillion won). Nexon's cumulative sales up to the third quarter reached 2.5323 trillion won. The strong performance was driven by the success of mobile games released this year such as Baram-ui Nara: Yeon, FIFA Mobile, and KartRider Rush Plus.

NCSoft is also on the brink of surpassing 2 trillion won in annual sales for the first time in its history. NCSoft's cumulative sales up to the third quarter reached 1.8549 trillion won. NCSoft's flagship games, Lineage M and Lineage 2M, maintained their stronghold this year as well. Since their release in 2017, the Lineage brothers have held the number one spot in Google Play sales for three and a half years. The cumulative sales of Lineage M and Lineage 2M up to the third quarter this year reached 1.3 trillion won, with Lineage M generating 617.1 billion won and Lineage 2M 682.9 billion won. According to the mobile data analytics platform App Annie, Lineage 2M and Lineage M ranked first and second respectively in consumer spending on games in Korea this year.

Netmarble is also expected to easily achieve 2 trillion won in sales this year. Netmarble's cumulative sales up to the third quarter reached 1.8609 trillion won. The overseas sales ratio has reached 75% for two consecutive quarters, raising expectations for global performance. Additionally, Netmarble's newly released mobile game last month, Seven Knights 2, is showing strong growth. According to IGAWorks' Mobile Index, Seven Knights 2 rose to second place in mobile game revenue share in November. Its monthly active users (MAU) reached 881,965, ranking first among RPG game apps in terms of user numbers. Industry insiders estimate that Seven Knights 2's daily sales could reach 1.2 billion won. An industry official said, "Because Seven Knights 2 is performing well, expectations for the results are high."

Annual 9% Growth as an 'Export Powerhouse'

The gaming industry, which has been growing every year, is also playing a significant role as an 'export powerhouse.' According to the Korea Creative Content Agency's '2020 Game White Paper,' the domestic gaming industry recorded an average annual growth rate of 9% over the past decade since 2010. Last year, Korea's gaming industry export value was $6.65778 billion (7.7606 trillion won), a 3.8% increase from the previous year. The gaming industry recorded a trade surplus of about $6.4 billion last year, accounting for approximately 16% of Korea's total trade surplus. As the gaming industry has played a key role in exports, its status has also changed. Kwon Hyuk-bin, founder of Smilegate and chairman of the Smilegate Hope Studio Foundation, became the first person from the gaming industry to receive the highest award, the 'Bogwan Cultural Medal,' at this year's Korea Content Awards ceremony.

This year, expectations for exports to the Chinese market, worth 39 trillion won, are rising as China issued game service licenses (panho) for Korean games for the first time in four years. An Jae-min, a researcher at NH Investment & Securities, stated, "With Com2uS's Summoners War receiving the panho, Netmarble is considered highly likely to be next."

However, some voices point out that domestic game companies need to establish a 'long-term growth strategy.' Professor Wi Jeong-hyun of Chung-Ang University, president of the Korea Game Society, said, "The gaming industry has overwhelmingly benefited from COVID-19. However, large domestic game companies are developing and servicing games focused on short-term results such as probability-based items. They need to prepare long-term strategies that cultivate the forest over 5 to 10 years by aggressively developing new intellectual properties (IP) and absorbing artificial intelligence (AI) technologies," he emphasized.

This content was produced with the assistance of AI translation services.