Local Gaming Firms
Korean game developers are receiving an increasing number of coy glances from overseas firms. Chinese companies are suggesting large-scale investments, and European countries are also actively seeking Korean gaming companies.
Currently, local gaming companies are heavily regulated by the government, and the gaming market is already saturated. The mobile gaming market is also growing slowly, and thus the market is expected to be stalled starting in 2015. Therefore, local game developers are pursuing overseas expansion, helped by the fact that they are recognized for technical skills and value in other countries.
According to industry sources on Nov. 10, Chinese Internet companies like Tencent and Shanda Games have made more than 1 trillion won (US$915 million) of investment in Korea's game and content developers.
On the same day, Tencent purchased an estimated 25 percent stake in 4:33 Creative Lab, a Korean gaming company famous for Blade and Arrow, through a consortium jointly established by Line, becoming a major shareholder. The Chinese Internet giant has invested about 120 billion won (US$109.8 million) into the consortium.
Previously, Tencent pumped money into Korean firms like Netmarble Games, Carbon Eyed, and PATI Games, with an investment of 560 billion won (US$512 million), 100 billion won (US$91.4 million), and 20 billion won (US$18.3 million), respectively.
The Chinese firm is said to have invested around 1 trillion won (US$915 million) in Korean gaming and content companies and software venture firms. If Shanda Games' 160 billion won (US$146 million) investment in its acquisition of ActozSoft and Identity Games is taken into account, the total investment in Korean gaming companies by Chinese firms exceeds 1 trillion won.
European countries are also trying to attract Korean game developers by encouraging them to move their headquarters or set up local branches in their countries. Last year, companies in Germany and the U.K. made an effort to attract Korean gaming companies at G-STAR 2013, Korea's largest game exhibition. The German federal state of Brandenburg will set up a booth at this year's G-STAR scheduled to be held in Busan from Nov. 20 to 23, and will also hold an investment briefing to attract Korean gaming companies. Brandenburg is aggressively seeking to attract Korean firms through incentives of up to 40 percent of total investments, with a promise to provide support for research, development, and infrastructure.