Why is the Korean Console Market Size so Small? - A Retrospective of Korean Console Games

You can see the Korean version of this article at this URL: https://gamegeneration.or.kr/board/post/view?match=id:58

I have a vague memory of a time when I was in upper elementary school, sometime in the early 90's or so, but I can’t recall the exact year. I had gotten a "gaming console". I think I won it in a magazine giveaway. Given the age, I can assume what model it was, but I can only make an assumption. I also do not recall the exact model. 

The reason my memory is so fuzzy is simple: I only played with that console a handful of times. The ROM packs had either a single collection of games or none at all, so the minigames on the internal ROM were all there was. The reason, of course, was my parents. I wasn't kept from playing it, but buying a new ROM pack was out of the question, and the very act of connecting it to the TV at home was frowned upon. I had no concept of what a cable was, or why there were so many wires, and I needed an adult to show me how to connect all the right wires, but my parents actively refused to take on that role. To play the console I had to go over to a friend's house, and while their parents would help me connect everything, I wouldn’t say that they looked comfortable doing it. With no games to play and nowhere to play them, the first game console of my life naturally disappeared into a closet and was completely forgotten.

I imagine that the gamers who grew up in the '80s and '90s probably shared a similar experience. As a result, console games only make up a small percentage of the South Korean gaming market today. According to the 2020 White Paper on Korean Games, the percentage is 4.5%, but 1.4% of this is taken up by arcade games, which virtually barely remain in existence. This is a far cry from North America's 38.4%, Europe's 37.5%, and South America's 19.1%, as well as the 2022 global ratio of 25.2%. In Asia, console games accounted for a mere 8.7% of the market, in large part likely due to South Korea's small console market. PC and mobile games, on the other hand, account for 25.7% and 54.1% in Asia, respectively, a stark contrast to the rest of the world.

* 2020 White Paper on Korean Games, p. 668

The reason for this can be traced back to its humble beginnings in the 80s and 90s. It's a sad story of a market that started small and never experienced the momentum of hegemony experienced by arcades and PC and mobile. Let's go back to those sad days for a moment.

The first game console that was sold in South Korea was the Otron TV Sports. It was a console with built-in games, just like the American "Pong" console, and was initially priced at 29,500 won, and later reduced to 198,000 won. In comparison, in 1977, the average monthly salary of a worker was 69,000 won. It was a price that was far from market formation or popularization, so it didn’t mean much apart from the fact that it was the first of its kind.

Due to the price, console gaming in Korea never really took off in the era of the family Pong and Atari, and in the '80s, Nintendo was brought to the forefront. However, the idea of Nintendo being imported into South Korea, a country with strong anti-Japanese sentiment at the time, was out of the question. Instead, PC games on the 8-bit MSX platform were imported in the early 80s as a substitute. Even then, they were a luxury, and as of 1982, less than a thousand units were imported into Korea.

By the late 80s, South Korea had succeeded in hosting the Asian Games and the Olympics, and the pride from those achievements were through the roof. Naturally, the anti-Japanese sentiment had subsided somewhat, and with Daewoo Electronics releasing its own console called the Zemmix in 1985, much of the unfamiliarity with the new culture that was gaming had dissipated. Still, public sentiment made it difficult for Japanese companies to set up local subsidiaries, so domestic corporations imported consoles under different names. Only then did relevant gaming consoles begin emerging.

Samsung imported and marketed the SEGA Master System under the name “Game Boy” which became a hit. Hyundai then imported Nintendo's NES, the North American version of the Nintendo Entertainment System, and released it as the “Hyundai Comboy”. Thus, the pioneering of the Zemmix, Game Boy, and Combo formed the market. However, this market was not large-scale enough to be called a mass market. While it was a huge success, and was well-known enough for the masses to be aware of its existence, it was a market centered around enthusiasts. This much was evident based on the individual price of each console.

 * Daewoo’s Zemmix advertisement, priced at 70,000 KRW. (approx. 53 USD today) 

 * Samsung’s Game Boy advertisement, priced at 119,000 KRW. (approx. 91 USD today) 

 * Hyundai’s Comboy advertisement, priced at 139,000 KRW. (approx. 106 USD today) 

 * The prices of console game titles in the latter half of 1992. Therefore, the cost of console games also had to be accounted for on top of the cost of the gaming console itself. 

With the year 1990 as the standard, these were times when the starting salaries for secondary school teachers and businessmen for large companies were less than 600,000 won. The wealth gap grew from this point on, making it a bit difficult to use 1.5 million won as the benchmark for the average monthly wage of the working class. Nevertheless, unlike with the Otron from a decade earlier, these prices were ‘a bit overwhelming but still manageable.’

In addition, the hegemony of the gaming market was slowly but surely shifting from arcades to PCs. The PC was actually a competitor to the gaming console, despite costing anywhere from 1 million KRW up to 2 million KRW at the time. In fact, they were actually holding their own weight in the competition against gaming consoles priced under 200,000 won. PCs held the advantage with the context that they were ‘preparing for the technological future’ and could be used in various ways for ‘education.’ Unlike the multifunctional PCs, consoles only offered the gaming feature, rendering even the relatively lower cost to be pointless.

Furthermore, the biggest difference between consoles and PCs was the space that they took up. In general, a console belonged in the living room, and a PC in the bedroom.

Gaming consoles require to be connected to a TV. The TV is a family-shared media, and so belongs in the living room. Usage of the living room TV was determined by the parents, so the children had to fight for the right to play their console games in the living room. In addition, students of that time had to study late in the night, and thus were often unable to spend time in the living room at all. On the off chance that they could, it was difficult to negotiate for TV time in the living room when their parents had just gotten home from work.

But with a PC, the space becomes the room, and you don't have to contend with the usage of the living room. Once you were done studying at night, or if your parents were watching TV, you could just head into your own room. The fact that copying and distributing game software was much easier than copying console ROM packs probably also played a significant role in the spread of PC gaming.

In the narrative of the transition from playing games in arcades to playing games at home, North America and Europe were different. The distribution rate of the PC was much faster than it was in Korea, so the perception that PCs were multifunctional rather than just used for gaming was already widespread. Essentially, the PC was already a part of the parents’ generation. Their children did not have after-school study programs nor late-night studying, and the parents already had the PC as one of their leisurely options, meaning they could afford to cede some of the power of the living room to their children. Plus, parents became cognizant of the role that consoles played as caretakers. They figured, if they gathered a few of the neighborhood kids in the living room, ordered them a pizza and gave them the game console, they could sneak out for a night at the movies downtown. Korean parents, on the other hand, had their grandparents, other parents, or late-night studying to be the caretaker, and so had no reason to give console games a glance.

However, this is less the case in Europe than in North America, which can be explained by the average living space. In North America, where the residential space is much larger, having a console in the living room was no problem; but in Europe, you had to consider it first before making that change. Eastern Europe, in particular, is a former communist region with a high threshold for importing game consoles, a product of the capitalist camp. It also had a smaller living space than the rest of Europe did, which is why it has the lowest console market share. The only exception to this interpretation is the United Kingdom, where English is the native language and so is less mentally distant in regard to American culture.

 * While from 2014, this data helps us gather that the average residential space in North America and Australia is greater than that of Europe (especially in Russia, the eastern part of Europe.) 

In 1990, South Korea had an average of 62.94 square feet of living space per household, similar to Denmark in this graph, but for the cultural reasons mentioned above, they did not take advantage of this space. Therefore, we can say that North America and Western Europe saw a shift in gaming hegemony from arcades to consoles to PCs, while Korea and Eastern Europe went straight from arcades to PCs. Given the status of gaming arcades in these countries, we can summarize the narrative in terms of space. In North America and Western Europe, it's downtown to the living room, then the living room to the personal room. In Korea and Eastern Europe, it’s straight  from neighborhoods to personal rooms.

The narrative of these spaces is now shifting to being ‘directly in your hands’ with the concept of ‘mobile’ platforms, but the context of these spaces goes beyond that. Whether it's a glitzy downtown gaming center in North America and Europe or a dingy neighborhood arcade in Korea, arcades are public spaces built for gaming, so they naturally build a sense of community. Think of all the times you went to your local arcade to watch your friends play and play against other players from other neighborhoods. We could describe arcades as being "socially-friendly gaming spaces".

When this gaming space transitions into the private space of the living room, the social aspect fades, but it doesn't disappear. Someone can watch you play games, you can converse with someone while playing, and/or you can play together, all in the living room. Console gaming is a solitary medium, but it's also a great offline social medium.

When the gaming space shifted to the personal room, the social aspect became much less important. The room is a strictly private space, which is why it's possible for Korean parents to have their kids playing PC games while the parents can watch TV. The word PC stands for personal computer, after all. So, before the advent of online gaming, gaming in Korea was a one-person media, back when "playing games together" meant each person held a joystick/pad at a separate arcade/console cabinet. You could describe this as both offline anti-socialization + online socialization.

The antisocial nature of PC gaming has been brought down to console levels due to the proliferation of the internet. In the case of internet cafes, it was like reverting the room’s space back to an arcade, and the “arcadeification” of StarCraft was an especially huge historical pivot in Korea. It was socially offline when you went to play StarCraft at an internet cafe with a group of friends, but it could also be done online as well. In other words, Korea’s internet cafe culture has diluted the offline, antisocial nature of PC games, but has also developed the social, online nature due to the expansion of infrastructure, and the result is no more than a reinforcement: You do not have to meet people in-person to play MMORPGs together.

And so, society’s perception of games changes. In North America and Europe, where the market share is close to 40%, the offline-social view of gaming is still somewhat alive, such as when you invite friends over to play Halo. The fact that one of the slang terms for video games in American English is “nintendo games” is a testament to Nintendo's historical influence, but it also indirectly demonstrates that the social aspect of consoles is deeply woven into the perception of gaming in English-speaking societies. In Korea, on the other hand, after exiting the arcade, you go straight to your room. The perception of offline socialization is almost non-existent.

Two characters that illustrate a stark difference are Thor and Koo Kyung. In the movie, Avengers: Endgame, Thor is presented as a gaming addict who plays Fortnite together in the living room with his friends.  On the other hand, Koo Kyung, the main character in the Korean drama Inspector Koo, is a gaming addict, but plays MMORPGs alone in her own home. She interacts with her guildmates through the game, but is a reclusive loner otherwise in the world outside. The difference between Thor’s living room and Fortnite, and Koo Kyung’s own room and MMO role-playing game, is the distinct characteristic of Korean gaming – the lack of consoles.

* Thor has become disconnected from society, but he still plays his games together with his friends. This can be seen as a remnant of the faintly offline social nature of consoles. 

* Koo Kyung has also become distanced from society, but unlike Thor, only she exists in her offline space. This can be seen as society’s perception of online, socially-oriented PC games.

This historical context, or difference in experience, is where the difference between the social perception from outside of gaming and the gaming that consumers experience looking out from the inside comes from. The number of Korean console games being extremely low does not simply and one-dimensionally mean that fewer games are made for this platform, but also that fewer games that can be used for offline socialization are produced and consumed. Another way to put it is that games made or distributed in South Korea are made with online socialization as the primary, or even sole assumption.

And now, we approach the year of 2022. The hegemony of gaming has progressed in the order of arcade, console, then PC, and is currently transitioning into mobile platforms. The offline space for mobile is incredibly narrow because that space is in the palm of your hand, and it's more offline-antisocial than PCs are. Looking at this transition, you can imagine a graph where offline socialization continues to fade and online socialization grows in importance. So, are the weight of the times shifting to be completely online-social?

This is a memory from a few years ago. One of my exes was hooked on the augmented reality game, Pokémon GO. They had to meet up with people in order to capture and trade for more Pokémon, and would even occasionally meet up with people from the community near their house to move in groups together around the neighborhood. This was the point where online socialization became offline socialization. Despite having the “look and feel” of a traditional online game, Pokémon GO was bringing people together to play, leaving plenty of room for interpretation as a mobile arcade or mobile internet cafe on the streets. Looking back, I remember seeing celebrities traveling from city to city to play Pokémon GO, with fans chasing them along the way.

This was one of the marketing points of the Nintendo Switch. It's a console that's both stationary and portable, so two players who meet offline can play together by connecting their consoles. This proves that the mobile platform actually hides an aspect of offline-socialization. It's a paradox that makes it the first platform to facilitate offline contact because it's portable. It's phenomenally convenient compared to lugging a game console or PC to a friend's house to play together offline.

Throw in the possibility of augmented reality (AR) games, and the social aspect of mobile gaming has the potential to guarantee a solid place in society. But can the offline-social aspect of Korean games, which has been missing since the arcade era due to the absence of console games, make a dramatic comeback? Can something beyond the social activities that Pokemon GO fostered be created? That answer lies in the imagination of developers and how users utilize it.