In Vicious Cycle
Korean online game companies have not expanded their R&D budgets for several years. In addition, regulations on the game industry and the rapid growth of Chinese companies are hindering game publishers from securing excellent developers.
These circumstances have decreased the launches of blockbuster online games. So, industrial watchers are voicing concerns that steadily shrunken development and a labor shortage may force the Korean online game industry to a vicious cycle and make the Korean online industry rapidly lose competitiveness even though the Korean online game industry ruled the world.
This year, it is urgently needed for the Korean game industry to make a breakthrough now that domestic new online games which cost tens of billions of won to develop have been shunned by gamers.
According to the game industry on August 19, four online game developers –- NC Soft, Nexon GT, WeMade Entertainment and Neowiz Games -- recorded 116.1 billion won in R&D costs in the first half of this year.
Compared to 119.2 billion won in the first half 2014, R&D costs dropped. As they spent 115.6 billion won on R&D in the first half of 2013, R&D spending has not expanded for the fourth year.
Even though these game companies have prepared to launch mobile games in addition to online games, they have concentrated on the publishing business. This has hampered the expansion of R&D budgets.
As game companies are busy releasing mobile games, they are having trouble recruiting online game developers.
Online game developers are core human resources that produce various contents since they have better development careers than developers who developed mobile games only. As mid-sized game companies withdrew from the online game sector one after another, specialized human resources lost a base on which they can develop their careers. This made it difficult for companies to hire competent online game developers. In addition, as the game industry has not ramped up R&D budgets, compensations for developers deteriorated from the past.
Finally, this situation compels Korean online game developers to move to Chinese companies or leave the game industry.