#sorry I need these to reroute to this article bc it’s related

[gacha-incels]

South Korea's 'Gaming Kingdom' Falling Apart Due to '쌀먹' and 'Gacha'

Economy insight

CULTURE AND BIZ

published October 4th 2024 this I thought was just an interesting opinion and analysis of the Korean gaming industry which heavily features critique on gacha. it is originally in Korean and has been mtl and edited into english so it’s not going to be a 1:1 but the very basic info should be there. If you see any discrepancies please lmk and I’ll edit it asap. Thanks for your help and understanding everyone

South Korea was once known as a gaming powerhouse; it was a term that frequently described the nation’s gaming industry. Even today, games are the leading export in South Korea’s content industry. As of 2022, South Korea’s game export revenue reached $8.9 billion (around 12 trillion KRW), which accounts for more than 67.8% of the country’s total content exports.

Globally, South Korea's status remains strong in the gaming industry, ranking 4th after the U.S., China, and Japan in a global market worth 282 trillion KRW. Though there have been fluctuations over the years, South Korea has maintained this position since the early 2000s. From a numbers perspective, South Korea still stands as a gaming giant.

However, if you listen to voices from within the industry, the phrase "gaming powerhouse" is hard to come by. A brief look at industry trends reveals concerns about a crisis: "The South Korean gaming industry is in trouble" or "There's no more innovation." Why is it that despite boasting a much larger export volume and market size than K-pop or K-drama, the core of South Korea's content industry, gaming, faces such grim assessments?

Broken growth caused by an incorrect business model (BM)

The key to South Korea's gaming industry growth was PC online games, which spread with the high-speed internet boom in the early 2000s. At a time when other countries were settling into arcade or home console markets, South Korea entered the PC online gaming sector—a move that turned out to be a masterstroke. With a fast market entry ahead of other nations, South Korea took the lead, pioneering its own paradigm. But today, the industry is struggling to even maintain its domestic market, losing ground to countries like China.

Everyone in the industry knows why. The unique business model (BM) of the South Korean gaming industry, particularly the trade of game items, is seen as a major obstacle to growth. The term “rice farming” (쌀먹- note I went thru a bunch of translations of this and this is the one that I thought made the most sense in context.. if you know the actual set in stone translation lmk)—a slang term meaning “making money by selling game items”—reflects how making money through games has become a major reason for gamers' choices. Currently, 60% of the South Korean gaming industry's revenue comes from in-game item trades, showing how central this model has become.

The core of "rice farming" is the sale of in-game currency or items that allow players to save time on gameplay. Game companies have capitalized on this psychology, introducing probability-based items, also known as "gacha." Gacha, a system similar to a lottery, can reward players with rare items but is also highly risky. The system is often regarded as being close to gambling.

The gaming industry has desperately tried to conceal the fact that probability-based item models have elements of gambling or promote a gambling mindset. If public opinion were to focus on the gambling-like nature of these models, it could literally lead to the downfall of the entire industry. Since this "goose that lays the golden eggs" brings in massive profits easily, no one has been willing to sacrifice it, even though everyone knows it's a problem, making it difficult to change.

The issue is that this culture has dominated the South Korean gaming industry for a long time, severely damaging the overall diversity and competitiveness of the industry. The current crisis stems from a decline in trust in the gaming industry as a whole, following multiple allegations of manipulated probability-based items, which has subsequently led to a decrease in revenue.

Instead of focusing on enhancing gameplay or user services, companies have drawn in users solely with gambling elements, while users, motivated by the desire to make money, approach these games with a gambling mentality. This dangerous dynamic is the main reason why the gaming industry is in its current crisis. The fixation on a flawed business model has led to distorted growth, and the industry has so far stubbornly ignored the issue.

It’s not that there haven’t been calls for change. Many in the industry have been raising alarms, warning that continuing down this path will eventually lead to a collapse. However, market forces often silenced these voices. By 2023, the festering issues that had been ignored for so long have now grown into an irreversible cancer.

Today, Korean games are no longer judged by their content but by how well they incorporate gambling-like elements. One might wonder how this is any different from Japan's national gambling game, pachinko. This is the current state of South Korea’s gaming industry. What's even sadder is that all of this is a result of game developers knowingly turning a blind eye to the situation, blinded by short-term profits.

A Gaming Industry that Talents Ignore

Beyond the distorted growth caused by flawed business models, there are numerous warning signs for the Korean gaming industry. The most noticeable problem is the significant decline in competitiveness when it comes to developing new games. Recently, it has become increasingly difficult to find new Korean games making a mark in either the global or domestic markets. This issue has worsened since the gaming paradigm shifted to mobile platforms. In 2022, only one Korean game made it into the global top 10 for mobile game revenue. The domestic revenue rankings tell a similar story, with most of the top 10 games being either Chinese titles or mobile versions of games that have been in service for over 20 years. This clearly shows the lack of competitive new game releases.

Experts point to the distorted personnel structure of current game development companies, where decision-making is dominated by professional managers who often lack a deep understanding of games. They highlight that Korea's game development culture is plagued by rigid hierarchies and processes, rather than fostering individual developers' creativity.

Survey data shows that the average tenure of employees in the Korean gaming industry is only 2.8 years, and six out of ten game developers express dissatisfaction with their current working conditions. This stands in stark contrast to the foreign gaming industry, where passionate developers drive innovation with fresh ideas. The so-called "crunch culture," where overtime and late-night work are expected, is another major factor hindering the progress of Korean game development. The high workload, compared to other IT sectors, causes talented workers to gravitate toward other industries, leaving game development behind. This is not just a problem of individual developers' working conditions; it poses a structural threat to the future of the Korean gaming industry. Unless the industry escapes from its stagnant development culture, a resurgence for Korean games will be difficult.

The rapid pace of technological change surrounding games has also intensified the sense of crisis in Korea's gaming industry. When it comes to adopting and utilizing emerging technologies that drive next-generation gaming trends, such as the metaverse and blockchain, Korea has fallen significantly behind leading nations. The power that once positioned Korea at the forefront of game innovation seems to have all but vanished.

Industry insiders unanimously agree that the root cause lies in the complacency of game developers, who prefer to take the easy route and prioritize making quick money over embracing new challenges. This results in the industry circling back to its distorted business models. Looking at this trajectory, it's no surprise that concerns are growing over whether the Korean gaming industry can maintain its past glory in an increasingly competitive global market.

The Last Golden Time

For the South Korean gaming industry to recover, fundamental innovation is needed. The focus must shift from aggressive commercialization to delivering the intrinsic value of games—fun, emotion, and immersion. A drastic change in game design philosophy is required, prioritizing enjoyable experiences over pushing players toward in-game purchases.

Additionally, a flexible, autonomous development structure that values creativity must take root. Only in such an environment can future hit games emerge. Risky and innovative attempts should be encouraged, even at the cost of failure. More companies need to embrace new technologies and genres.

The road to reclaiming South Korea’s status as a gaming powerhouse will not be smooth, but if the industry collectively prioritizes the essence of gaming and takes one step at a time, the path to revival can open. Now is the last golden opportunity for the industry to unite for its future.