The Chinese government has lifted the 'Korean Wave Restriction' (한한령) and has resumed issuing game service permits (판호) for K-games, but the performance of domestic game companies in entering the Chinese market has been sluggish. The only South Korean game that has achieved long-term success in the Chinese market is Neople's 'Dungeon Fighter Online,' released in 2005. The industry believes that while the Chinese gaming industry has grown significantly, it has become difficult to achieve success in China even with the resumption of issuing permits.
◇ Dungeon Fighter Online loved in China for 20 years… both online and mobile successes
According to 'WeGame,' China's largest PC gaming platform, as of June 17, the only South Korean game in the top 10 rankings of popular PC games in China is 'Dungeon Fighter Online,' at 4th place. During the same period, market research firm Sensor Tower reported that the only South Korean game in the top 25 of the China Apple App Store revenue rankings is 'Dungeon Fighter Mobile' (21st). KRAFTON's Chinese version of 'BattleGrounds,' 'Hwapyeongjeongyeong,' ranks 2nd, but this game is effectively developed and distributed by Tencent. KRAFTON failed to obtain a Chinese game service permit for 'BattleGrounds' in 2018 due to its violent content. Subsequently, Tencent consulted with KRAFTON to launch a similar game, 'Hwapyeongjeongyeong,' independently, and KRAFTON is only receiving royalties.
'Dungeon Fighter Online' is a 2D side-scrolling action role-playing game (RPG) characterized by its fast-paced combat and combo-centric battle system. The online version was released in Korea in August 2005, and it launched in China through Tencent in December of the same year. Currently, over 90% of 'Dungeon Fighter Online' revenue comes from China. As of 2023, the game boasts more than 800 million global subscribers and has achieved a cumulative revenue of $22 billion (30.76 trillion won). 'Dungeon Fighter Mobile,' released in China in May last year, generated more than 1.5 trillion won in revenue within that year. Consequently, Nexon's development subsidiary Neople achieved a record revenue of 1.3783 trillion won last year.
Industry experts cite initial service operation capacity and localization efforts as key factors to success. When 'Dungeon Fighter' first entered China, low-spec PCs and unstable networks were common. 'Dungeon Fighter Online,' with its 2D graphics, did not require high-spec PCs compared to 3D PC online games. Neople took the opportunity to assess the network conditions in different regions of China and adjusted the game accordingly.
Since then, Neople has focused on localization efforts through regular updates. They updated new content almost bi-weekly and introduced event content tailored to major Chinese holidays such as the Spring Festival and National Day. Characters favored by Chinese players, such as dragons and pandas, as well as avatars from the 'Romance of the Three Kingdoms,' were developed. A character called 'Machangsa,' using a spear, was also added. Additionally, they continuously enhanced clothing and backgrounds preferred by Chinese users.
◇ Growth of the Chinese gaming market over the last 7 years… Thorough localization and freshness are key
Domestic game companies are actively entering the Chinese market, hoping to create a 'second Dungeon Fighter.' This follows the Chinese government's resumption of issuing permits in 2022. China had effectively blocked the entry of South Korean games for nearly six years by not issuing permits since the Korean Wave Restriction was imposed in 2017.
Domestic games acquired permits for ▲ 8 cases in 2022 ▲ 9 cases in 2023 ▲ 10 cases in 2024. So far this year, they have secured 9 permits in the first half alone. Notably, the genres of the games that obtained permits include massively multiplayer online role-playing games (MMORPGs), casual games, and shooters, leading to analyses that the Chinese authorities may have eased their review criteria.
However, there have been no major hits to date. Nexon Games' 'Blue Archive,' SHIFT UP's 'Goddess of Victory: Nikke,' Netmarble's 'The Seven Deadly Sins: Grand Cross,' and Smilegate's 'Lost Ark Online' have all begun service in China, but unlike the early surprise successes, their rankings quickly dropped, showing sluggish performance.
Industry experts identify changes in the structure of the Chinese gaming market as a significant reason. Just 6-7 years ago, South Korean games had advantages over Chinese games in terms of technology and gameplay. However, the situation has since reversed. In August of last year, the Chinese gaming company Science released the console game 'OKONG,' which demonstrated high gameplay quality, surpassing 10 million sales within three days of its release. Competition among domestic companies like Tencent and miHoYo in the Chinese market has also intensified.
Typically, Korean games are first released as global versions and then take 1 to 2 years to be released in China after obtaining a game service permit. In fact, 'Goddess of Victory: Nikke,' which was released in China this past May, had already launched in the global market in 2022. The timing of releases shows a significant difference.
A gaming industry official noted, 'The domestic games that have currently obtained permits in China are either being overshadowed by local games or have already lost freshness due to their release timing.' He added, 'Only when a thorough localization strategy tailored to China's regional characteristics, along with game quality and freshness, is established will blockbuster games emerge.' Wemade plans to launch 'Mir M: Vanguard and Vagabond' in the third quarter of this year, and NCSOFT is set to release 'Lineage 2M' in China next year.