Chinese games are rapidly eroding the Korean market. It is happening while China blocked the distribution of new Korean games in China over the deployment of the Terminal High Altitude Area Defense (THAAD) missile system. The Korean game industry is suffering from unfair competition.
According to the “2017 Performance report of Chinese mobile games in Korea” by IGAWorks, a Korean app analysis company, Chinese mobile games that were released in Korea last year through Google Play, the Android app market, amounted to 136. It was 22 more than the previous year. Last year's sales totaled 196 billion won (US$163 million), up 75.0% from 112 billion won (US$ 93 million) a year ago. The average sales of Chinese games also increased from 10.2 billion (US$ 8.5 million) won to 12.2 billion won (US$ 10.16 million).
IGAWorks also said that 91 Chinese mobile games were released in Korea from January to June this year. In the same period, the top 30 games included 10 Chinese games. These figures show that Chinese games are becoming more competitive.
Korean game companies, on the other hand, have not been able to launch new games in China since last March. It is because the Chinese government is not issuing distribution permits to Korean games after the deployment of the THAAD missile system in Korea.
From the beginning of China's THAAD revenge to June this year, 202 Chinese mobile games were released in Korea. In the same period, no new Korean games were distributed in China. The Chinese government gave more than 400 distribution permits to foreign games last year.
As the world’s biggest online game market is blocked, it is a big blow to Korean game developers. Last year, the Chinese game market reached 33 trillion won (US$27.5 billion), with the number of game users amounting to 583 million. Nexon and Smilegate have grown in China by gaining popularity with “Dungeon and Fighter” and “Crossfire.” The two games began to be distributed in China 10 years ago and are now the major source of income for these two companies. Netmarble, NCsoft, BlueHole, Pearlabyss have applied for distribution permits in China but none of them succeeded.
A game industry official said, "Among the Korean games that have been successful in recent years in Korea and North America, there are many that can gain popularity in China. Even if the games are released in China two or three years later, they are highly likely to fail as they will be old games by then.”
An official from the Ministry of Culture, Sports and Tourism, who is in charge of the game industry, said, "We are protesting with the issue of distribution permits, but the Chinese government is not responding."