Asymmetric Regulations
According to industry sources on May 25, three foreign online games backed by a Chinese company are making up 52.4 percent of the Korean market in May, crossing the 50 percent mark for the first time. In contrast, the market share of local online games continues to decline, and therefore it is hard to find local gaming companies with a 10 percent market share.
Three foreign online games refer to League of Legends (LoL), Diablo III, and StarCraft. All of these games are financially associated with Chinese Internet giant Tencent. LoL is the product of Riot Games, a subsidiary of Tencent. And ASAC II LP, an investment consortium led by Tencent, is the largest shareholder of Blizzard Entertainment, the company behind Diablo III and StarCraft.
An official at Korean gaming news site Gametrics remarked, “The first, second, and seventh spots have been taken by three foreign online games so far this year,” adding, “But local games rarely surpass a 10 percent market share.”
In fact, the combined market share of four locally-made online games — NCsoft’s Aion, Blade & Soul, Lineage, and Nexon’s Dungeon & Fighter — has decreased from 11.27 percent in January to 8.64 percent in May. Lineage, a dominant player among local online games, comprised only a 1.86 percent market share sometime during May.
Industry analysts are saying that one of the reasons for this phenomenon lies in the government’s asymmetric regulations. In other words, there are many cases where regulations applied to locally-made games are not applicable to foreign games. Some even say that competition between local and foreign games are unfair, since they compete in the same industry under a different set of regulations.