"Taejin hyung, come out"... Domestic game companies truly distinguish between hyung and dongsaeng overseas

There was a time when an NCSoft commercial featuring someone calling out "Taekjin hyung" was a hot topic. Kim Taekjin, the founder and CEO of NCSoft and a member of the Class of '85 in the Department of Electronic Engineering at Seoul National University, was the undisputed elder brother of the gaming industry. Kim Beom-su, chairman of Kakao and creator of Hangame, and Kim Jung-ju, founder of Nexon, are from the Class of '86 at Seoul National University. In fact, age was not that important. NCSoft, led by Lineage, was the most profitable game company. There is a saying, "If you have money, you are the hyung." Since he was both older and wealthier, everyone recognized "Taekjin hyung" and NCSoft as the elder brother of the industry.

However, circumstances began to change. The term "3N" (Nexon, NCSoft, Netmarble) emerged. Nexon surpassed NCSoft, and Netmarble earned as much money as NCSoft. It became difficult to definitively say who was the elder brother of the industry. Still, NCSoft, which had built a long-standing presence in the Korean market, was treated as the elder brother. But as the competition shifted overseas, signs of a change in hierarchy began to appear. Now, NCSoft faces the risk of yielding its position even to companies with more than a decade of difference in experience.

Krafton 'PUBG: Battlegrounds'

‘SK2’ Operating Profit Surpasses '3N'

Starting with Nexon in 1994, followed by NCSoft in 1997, and Netmarble in 2000, these companies laid the foundation of the domestic gaming market. As pioneers, their performance was far ahead compared to later entrants. However, as the domestic market reached its growth limits, their positions began to narrow.

Last year, the 3N were overtaken in performance by Smilegate, Krafton, and Kakao Games, collectively called ‘SK2’. Krafton's operating profit was 751.6 billion KRW, the second highest among domestic game companies. Nexon maintained the pride of the 3N trio with an operating profit of 995.2 billion KRW. However, Smilegate earned 643 billion KRW, pushing the elder brother NCSoft, which earned 559 billion KRW, down to third place. Netmarble's situation was even worse, recording an operating loss last year and losing face.

The growth of the latecomers is steep. It took NCSoft 20 years to surpass 1 trillion KRW in sales. In contrast, Krafton exceeded 1 trillion KRW in sales in 2018, just 11 years after its establishment?about twice as fast as NCSoft. Kakao Games’ growth is even more aggressive. Founded in 2013, Kakao Games surpassed 1 trillion KRW in sales by 2021.

NCSoft 'Throne and Liberty'.

The Real Elder and Younger Brothers Are Determined Overseas

The reason the gaming industry landscape has changed is that competition is happening worldwide. Smilegate’s overseas sales account for over 80%. Krafton’s reach 94%. In contrast, NCSoft’s overseas sales account for only 30%. While NCSoft boasts overwhelming recognition domestically with the Lineage series, overseas, its former juniors earn more money and are more famous.

This year is expected to be the turning point that determines the real elder and younger brothers. Each game company is releasing major new titles in overseas markets one after another. The industry landscape can change depending on the results achieved in overseas markets, where sales volumes are much larger than in Korea.

NCSoft has bet everything on the performance of its new title “Throne and Liberty” (hereafter TL), which will be released this year. CEO Kim Taekjin personally got involved in creating this new game. It is a console-based game popular in North America and Europe. Through this, NCSoft plans to officially make its name known worldwide. TL will conduct a beta test in Korea next month as its final preparation.

Netmarble, which lost face badly last year, is releasing nine new titles this year. Recently, it launched the new game "Everyone's Marble 2: Meta World" worldwide and is receiving a good response. In the second half of the year, it will introduce new titles such as “Arthdal Chronicles” and “Solo Leveling: Arise” both domestically and internationally.

Smilegate and Kakao Games have also set goals to overwhelm the 3N with various new titles this year. Smilegate will release four new titles including “Outerplane” and “Wonderous.” Kakao Games will launch games such as “Odin: Valhalla Rising” and “Eversoul” in Japan and North America. Krafton, which is taking a breather, plans to release anticipated titles like “Bird That Drinks Tears” the year after next.