Mobile gaming is expected to generate $1.4 billion in South Korea this year, and mobile games like Anipang have become a cultural phenomenon within the country. It’s as common to see older women in their sixties playing games in the subway as it is to see younger children playing games at the bus stop. We at Ultra believe the mobile gaming craze in Korea is largely a result of the following factors.
Above: Kakao dominates top Google Play ranks
1. KakaoTalk’s Social Graph
The KakaoTalk mobile messaging service has blossomed to more than 100 million users and 5 billion messages sent daily. It is visually attractive and it has effectively replaced text messages in South Korea. And it has generated unique experiences.
“Great to hear from you, Thanks to Anipang.”
This short, telling, and now famous Korean poem provides insight on the massive, nationwide popularity some Korean games have been able to achieve thanks to KakaoTalk. When Anipang, a simple puzzle game, debuted in the first quarter of 2013, it managed to capture 12 million monthly active users because it successfully leveraged the Kakao platform.
When Anipang players run out of lives, they can purchase more hearts or invite their friends to install the app in exchange for more game time. The result was massive spamming across KakaoTalk, as relatives, distant friends, and even former lovers exhausted their contact lists in search of extra game time.
Blockbuster hits in Korea are almost always KakaoTalk games. Kakao reviews and selects games from independent studios to host within the app’s game center. This selection process puts a relatively small number of games in front of more than 30 million active users every day, which leads to many downloads in and of itself.
(For a more in-depth analysis of KakaoTalk, read our article: What is KakaoTalk’s Business Model?)
Additionally, because KakaoTalk primarily serves as a mobile messaging service, the games built on its platform get to piggyback on existing user behavior. Friends and family are accustomed to sending messages back and forth via KakaoTalk, so the sharing of game invitations or high scores comes as a natural extension of the app’s usage.
In practice, Kakao users are more likely to send out game requests, lending Kakao games a strong viral advantage. Of App Annie’s Global Top 10 (Android, Aug. 2013), three are exclusively built for Kakao: Everybody’s Marble, Cookie Run, and Anipang. Their close connection with KakaoTalk ultimately leads to greater discovery, which goes on to help them reach massive popularity and drive sales.
Above: South Korean high-speed trains.
2. Seoul’s expansive, WiFi-equipped subway system
City infrastructure also plays an important role in the country’s widespread consumption of mobile games. The Korean subway and train system is vast and heavily used. Of Korea’s 50 million population, half live in Seoul and its metro area. Ridership for the Seoul subway system is reportedly 2.4 billion riders per year with 6.7 million daily riders. This ranks the Seoul subway system as the second busiest in the world (Tokyo ranks first).
Heavy ridership is just part of the story. Korea’s modern, LTE and WiFi-equipped subway cars provide an ideal space for gaming. Daily commutes can be long and uncomfortable. Children and professionals escape the shoulder-to-shoulder morning rush, not by reading books, but by gaming and chatting with friends on KakaoTalk. Because Korean subway cars are equipped with the world’s latest in telecommunication technology, travelers never miss a beat from their games, chats, or streaming TV shows thanks to LTE speeds pegged at up to 150 megabits per second — nearly triple that of speeds in the US.
When other subway commuters around the world might be limited to offline activities such as reading, listening to music, or engaging with pre-downloaded content, Korean commuters can pass the time playing simple, competitive games all the while remaining connected online.
Above: South Korean subway gaming
3. South Korea’s exceptionally high smartphone penetration rate
Mobile games are reliant upon the smartphones needed to play them. Fortunately for the Korean gaming industry, Korea is a global leader in smartphone adoption with a 73 percent penetration rate according to a July 2013 survey conducted by Google Korea. This puts Korea as No. 1 or No. 2 (depending on the research institution) in the world for smartphone adoption. For children ages 6-19, the rate remains high at 65 percent (Korea Communications Commission). Furthermore, Samsung Electronics, the world’s largest smartphone manufacturer, is based in Korea and heavily promotes its products across a vast range of Korean advertising channels.
Why to expect more growth for Korean games
As leaders in the highly competitive mobile app industry, Korean developers must constantly hone their game mechanics and business models to remain relevant. So they are innovating at how games convert players into paying customers.
Take, for example, the game Cookie Run. Cookie Run is No. 6 on App Annie’s Global Top 10 list and was made by the Korean game studio, DevSisters. Cookie Run is similar in gameplay to other popular endless running games such as Temple Run or Robot Unicorn Attack. A gamer’s character continuously runs forward, gains points via collecting items along the way, and must get as far as possible before succumbing to obstacles, enemies, or time. Though Cookie Run’s game mechanics are similar to its counterparts in the U.S., the monetization strategy is markedly different.
Cookie Run is free to download and is ad free. Gamers can upgrade their characters or purchase special power-ups as they would in Temple Run, but the key differentiator is Cookie Run’s pay-to-play strategy.
Cookie Run limits the number of consecutive games a user can play. Gamers have a “heart bank”, which represents the number of runs a player has left. Players start with 5 hearts and one heart is consumed prior to each run. Once a player has spent all of his or her hearts, they have three options: buy more hearts (i.e. more game time), wait 7 minutes for another heart to generate, or send a Cookie Run invite to a friend in exchange for a heart.
Above: Kakao games in South Korea
The game developers essentially bank on Cookie Run’s gameplay to be so addictive that it pushes its users to share the game or make in-app purchases to continue playing. This is an interesting approach that benefits both discovery and sales for the game. While other games focus on keeping users plugged in as long as possible, Cookie Run creates a pain point for its most active users by limiting access just as a player might be one run away from beating their friend’s top score.
At first glance, it may appear a reach to correlate pay-to-play with Cookie Run’s position as 6th on the Global Top 10 list. However, if we take a closer look at the 10 games on the list, 5 are games developed by Korean game studios (Pokopang and Wind Runner are also the work of Korean studios), and every single one utilizes a pay-to-play monetization strategy.
Based on the success of pay-to-play for Korean game publishers, it wouldn’t be surprising to see this strategy adopted by other Western and Asian game studios. And though most Western developers have focused on monetizing via the initial download or on powerups and items, we already see major player King.com utilizing this strategy in Candy Crush Saga. In Western markets, Candy Crush Saga has held a top 3 sales position since January 2013. While Western developers have favored other monetization methods, pay-to-pay is clearly working to King’s Benefit, and gamers are making purchasers to ensure unlimited play time. If this trend catches on with other arcade and puzzle makers, it would be wise for Western publishers to keep an eye on Korean games for new strategies in viral growth and player monetization
Abel Acuña is a graduate of Harvard University with a degree in government. He leads strategy and globalization for Ultra, a tech company based in Seoul.