For Korean game makers, the Chinese game market is a market they must win, but often outside of their control.

They have to be prepared to have no Chinese gaming market, but if possible, it's better for them not to have that happen.

Nexon's turnaround is still relying on China

Nexon has almost become a major Korean manufacturer bound to the Chinese market. Nexon's Q2 earnings report in August was the best ever, with operating income of about $786 million, up 64% year-on-year - the Chinese market is the number one contributor to Nexon's Q2 results, and the launch of the "Dungeons & Warriors: Origins" mobile game allowed Nexon to earn $361 million in the Chinese market in Q2, a year-on-year increase of 209%.

Nexon officially admitted that "Dungeons & Warriors" was the main driver of the company's performance in the second quarter. Driven by the successful launch of the DNF-derived mobile game Dungeons & Warriors: Origins in China, the total revenue of the Dungeons & Warriors IP more than tripled year-over-year last quarter.

As of Q2, Nexon has generated more than $22 billion in global revenue with the "Dungeons & Warriors" IP alone. In the earnings report, Nexon said that it is working with Tencent to develop new games based on the "The Finals" and "ARC Raiders" IPs that will appeal to Chinese players.

Whether it is the social tone of China or South Korea, Nexon has a strong binding to the Chinese market. In fact, "Dungeons & Warriors" is really popular in China, and has even become a pillar product of Tencent Games, China's number one game company, and has been ridiculed as "Tencent's four masterpieces". Unlike in the Chinese market, Nexon's products released in South Korea and do not rely on the Chinese market have been cold in the past few years.

Nexon's 2024 Q1 results were miserable. According to the financial report, in Q1 2024, Nexon's overall revenue will drop by 32%, PC revenue will plummet by 38%, and revenue in China will drop by 10% year-on-year.

From the perspective of Nexon's revenue structure, it has a strong dependence on the Chinese game market, especially when its performance outside the Chinese game market is not good.

But for Nexon and other South Korean game companies, they must be prepared for the absence of a Chinese gaming market. The Chinese game market is the largest in the world, but South Korean game companies have not obtained game version numbers for a long time, so they can only enter the Chinese game market in a "side-rubbing" way. Although Korean game companies have long done a full set of Chinese localized content (Chinese Simplified, dubbing, etc.), they cannot enter the Chinese market from formal channels, which still greatly weakens the scale of their money in the Chinese market.

Earned more than $20 million, this time it really didn't rely on China

However, the good news for Nexon is that they do have a project that does not rely on the Chinese game market at all. The project earned them $24 million today, whereas last year it was a project that was cut in half.

In 2021, Nexon spent $100 million to buy 1,717 media bitcoins, with an average purchase price of about $58,000. That's enough money to make a new MMO, and it's a very luxurious budget. Nexon's purchase of bitcoin was ridiculed by the whole network at the time, and some Korean players commented that Nexon couldn't make new games from their old books, and used the money to make games to invest in virtual currency.

What was even more devastating for Nexon was that he bought the bottom in a downward trend. In just the past 3 months, Nexon has lost 46%. However, a few months later, Nexon hit the crypto bull market, and the investment made a profit of 12%.

However, due to the embarrassment of buying points, Nexon's investment later turned into a loss, and even lost 71% at one point. Korean netizens also once ridiculed Nexon as an investment ghost, which coincided with the annealing of Nexon's products, and the overall performance became more ugly.

But now, Nexon has earned 24% for this action. In the early hours of October 30, Bitcoin briefly topped $73,000 – and this time it did not rely on the Chinese gaming market, or even games.

A new discovery for a Korean game company

Nexon's case is also a wake-up call for their counterparts in South Korea to find a way to enter the Chinese gaming market. Even if they have to be prepared for the absence of a Chinese gaming market, more often than not, it is very difficult and painful.

Black Desert developer Pear Abyss recently spoke about their latest findings during an internal investor conference. That is, there is no need to look for a Chinese manufacturer to authorize the agent, because Chinese players will use Steam.

Previously, Pear Abyss's "Black Desert" entered China, and it took 7 years to get the version number (according to interviews with Snail Games at the time, the game was submitted for review in 2017). Pear Abyss's story is a wake-up call for Korean game companies, but they are helpless in the face of the temptation of the world's largest game market. This frustration has been transmitted to South Korean political circles, and some South Korean officials have asked Chinese diplomats to solve the problem of South Korea's game version not passing.

However, with the rapid growth of Steam users in China, Korean game manufacturers have found this solution. Unlike 10 years ago, after many rounds of blockbuster baptisms, China's Steam users are already quite large. According to the hardware report released by Valve, the data shows that in August 2024, the number of Chinese simplified Chinese users surpassed the number of English users - China's own triple-A game "Black Myth: Wukong" has allowed Steam simple Chinese users to grow by leaps and bounds again.

Although there is no exact data on the number of players, Korean manufacturers can calculate the number of users that can be reached in the Chinese market by looking for Chinese agents based on their own experience, compared to the users they are expected to reach by publishing directly on Steam. And they don't have to give affiliates a share, and they don't need to wait for the game version number, which may be 1 year or 7 years.

Judging by Pear Abyss's statement, this is already a more advantageous option.

Content cooperation and reprinting open white Vx: tsunamikm

This article is from Xinzhi self-media and does not represent the views and positions of Business Xinzhi.If there is any suspicion of infringement, please contact the administrator of the Business News Platform.Contact: system@shangyexinzhi.com