3N Challenges 'Level Up' with Finance, Entertainment, and Subscription Economy

NC Expands Entertainment Business
Nexon Pursues New Business Combining Gaming and Finance
Netmarble Acquires Coway, Prepares Smart Home Subscription Economy

[Asia Economy Reporter Bu Aeri] "Leap beyond. Imagine (PUSH, PLAY)" NCSoft recently changed its corporate mission for the first time in 12 years. True to this phrase, NCSoft is expanding its scope by challenging not only the existing gaming business but also the entertainment and finance sectors. The new business moves of the three leading game companies known as the 3N (NCSoft, Nexon, Netmarble) are becoming increasingly significant.

The 3N's Expanding Moves

According to the gaming industry on the 7th, NCSoft is the most proactive in expanding its business areas. NCSoft plans to establish a joint venture (JV) with the 'content powerhouse' CJ ENM within this year. The plan is to combine NCSoft's IT capabilities with CJ ENM's entertainment expertise to develop various content businesses. First, NCSoft will collaborate with CJ ENM for the K-pop fan platform 'Universe,' scheduled to launch this month. This is not the first time NCSoft has expanded its domain. In October last year, it also participated in establishing a JV to launch an 'AI-based easy investment securities firm' with KB Securities and December & Company Asset Management. The three companies will combine NCSoft's AI technology and KB Securities' financial investment know-how to create a new type of digital securities firm. NCSoft plans to gradually extend the influence of its IT technology, which is its strength, beyond gaming into other fields. An NCSoft official explained, "We continue to challenge ourselves to broaden the application scope of the technologies we have researched for over 20 years."

Nexon is actively entering the finance sector. Recently, Nexon signed a memorandum of understanding (MOU) with Shinhan Bank to promote new businesses combining gaming and finance. The two companies plan to discover new business models based on Nexon's AI technology and data, as well as payment services based on financial infrastructure. Analysts say Shinhan Bank gains data to attract the MZ generation (born early 1980s to early 2000s), while Nexon secures a foothold for entering the financial sector. A Nexon official said, "By combining the data each company has, we might create a new platform and are considering various ideas such as financial product recommendations and payment benefits." Additionally, Nexon's holding company NXC established a subsidiary called Aquise last year to develop a trading (investment and financial transaction) platform, targeting the MZ generation by lowering the barriers to asset management.

Netmarble acquired Coway to secure a steady cash cow. Unlike the gaming business, which depends on hit success, Coway can generate stable income based on its water purifier rental business. Netmarble is also preparing a subscription economy model incorporating its technology. A Netmarble official said, "The acquisition of Coway is for entering new businesses," adding, "We will integrate Netmarble's IT technologies such as AI, big data, and cloud to develop a smart home subscription economy business." The appointment of Seo Jang-won, a former Netmarble executive, as Coway's new CEO on the 5th also reflects the intention to enhance synergy between the two companies.

"Limitations of the Gaming Industry Alone"

These moves by game companies are interpreted as a strategy to secure new growth engines. According to data from the Korea Creative Content Agency, the domestic gaming industry was a high-growth sector with a 20.6% growth rate in 2017 but has been showing a slowing growth trend. In 2018, the growth rate was 8.7%, and even in the last year, which enjoyed a boom due to the COVID-19 pandemic, the growth rate remained in the 9% range. There are certain limitations to generating profits solely from the existing gaming industry.

The 'de-industrialization' trend, where boundaries between industries in the domestic IT sector are breaking down, also seems to have an impact. Moreover, platforms utilizing IT and K-pop content, such as Naver's V Live and Big Hit Entertainment's Weverse, are gradually expanding.

Wi Jeong-hyun, president of the Korea Game Society and professor of business administration at Chung-Ang University, explained, "As platforms blur clear genre distinctions, game companies may feel a crisis that if they remain passive, they will be reduced to subcontractors of platforms," adding, "If game companies build platform foundations using their AI and big data technologies, it will be easier to enter other industries after advancing into finance."

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