JULY 23 , 2007 • Most people that follow the game industry are aware that South Korea is a nation that loves their games. DFC estimates that there are over 22 million game-playing consumers in South Korea. This is a remarkable number in a country that has only about 49 million people. No wonder the large video game manufacturers are all focusing their attention on the Korean market.
The general stereotype is that consumers in Korea play PC online games like StarCraft and Lineage at the local cybercafé (PC Bang). However, this is only partially true. South Korea now has the highest level of broadband penetration in the world, reaching over 80% of households. This has resulted in a boom in at-home game playing. Nevertheless, what does hold true is that Koreans still play most of their games on the computer, due in part on the government’s past import restrictions on Japanese consoles on cultural/political grounds. As a result, the video game console systems have had minimal impact on the market. But that’s changing. Sony, Nintendo and Microsoft are all trying hard to make inroads and the next few years could see a boom in the South Korean video game market.
Sony was an early pioneer in Korea. Sony Computer Entertainment Korea (SCEK) was launched in lat 2001, two months before the February 2002 launch of the PlayStation 2 (PS2). By the end of 2004, the PlayStation 2 had passed the 1 million unit sales mark in Korea and with an estimated 1.27 million units sold by early 2007, the PS2 is far and away the most successful console system in Korea. In mid-2005 Sony launched the portable PSP in Korea. It had some strong initial success, but sales slowed considerably in 2006. By early 2007, the PSP had sold 300,000 units in Korea,
Microsoft has not been as successful in Korea. The original Xbox launched in late 2002, but was only able to sell 150,000 units. This was a disappointment because Microsoft had placed a big emphasis on online games, with Xbox Live getting a big Korean rollout in late 2003. The Xbox 360 launched in early 2006 and sold an estimated 70,000 units in its first year on the market. The Xbox 360’s price since launch has been ₩ 339,000 for the core system and ₩ 419,000 for the full system The exchange rate is constantly fluctuating, but perhaps the easiest way to quickly convert Wons to dollars is to use 1 USD = 1,000 KRW.
In forecasting the Korean console market, DFC Intelligence has taken a very conservative approach. We feel this market has a great deal of potential, but it is still unproven. The overall Korean game market has been rather stagnant, there is increasing push for government regulation of “game addiction,” and software piracy is still a major problem. It is still easy to buy pirated versions of hit console games in Korea for a fraction of the price of the legitimate products.
For more info see the DFC Intelligence report The Game Market in Korea