Cash Shop: An Obstacle?

"Online games cannot reach cultural values without continuous innovation!"

At KGC (Korea Games Conference) 2010 held not long ago, Kim Ji Won from Nexon started his speech with the above sentence. As he said, online games that once grew rapidly are now at a standstill, and new ideas are absolutely required for the sake of further growth.

According to him, the current business model is the biggest reason for online games' stagnation.






Most online games adopted the monthly subscription model at the beginning. Though simple and aiming for gaming fun only, this business model's threshold is still high for gamers since they have to pay relatively high fees. This just led to the appearance of micro-transaction. With games basically free to play, such business model attracts more gamers and brings the game companies more profits, but makes the game systems too complicated.

At this point, as Mr. Kim pointed out, the micro-transaction model has to take many risks, and is prone to become a stumbling-block for online games.

The current online games, which adopt the micro-transaction business model, basically strive to get more money from gamers. That is, gamers now have to pay more fees for the same gaming experiences only because the game companies are eager for more profits.

There also exists a social risk, which can just be explained by the question – "How many gamers can be recognized by the society?" At present, large numbers of people watch TV and see films, and make TV and films become two recognized forms of entertainment. Then, what about games? While dating, will you say proudly that you won some top-grade gear yesterday? Most of the gamers won't do so! So, this is just the so-called social risk!

The fact that gamers are made to spend more time on games even makes the risk more serious!

With the increase in the number of risks and the decrease in the gaming value, game companies make fewer profits accordingly. Meanwhile, gamers start to ask themselves "why I play games" and leave the games in succession, or leave the games so as not to waste too much time. Though there may be an increasing number of gamers in certain fields, it's inevitable that the whole number of gamers will become smaller and smaller.

To minimize the risk, Mr. Kim said that it's necessary to relieve the pressure brought on gamers, and game companies also had to reduce expenditures and increase production by creating new payoff structures.

New payoff structures refer to the introduction of outside capital by investment attraction, ads, etc. The problem is that, in comparison with other industries, it's more difficult for the game industry to be invested in. For example, films are basically created depending on large amounts of investment and support, but games' development cost is borne by the game development/publishing companies. Though certain game companies get assistance from the government or some venture capital companies, it is still a difficult job from the perspective of the industrial structure.

The in-game ads should be made seeable by gamers during gameplay, and it is also feasible to cooperate with other types of companies for the sake of certain commissions. The amount earned in such way can then be applied in game development, thus making the game companies able to concentrate on the development of gaming fun instead of money-making content and relieving gamers' pressure in money and time.

It's time for online games to grow to a mass culture.

When will online games become a mass culture? Just think about it!

According to Kim Ji Won, to become a mass culture, four factors are necessary for online games, i.e. "Massive" – guarantees large numbers of gamers, "Public" – accepted by the society, "Trendy" – guarantees a powerful community in the real world, and "Women" (that is, female gamers), the most important theme of economic activities in the modern society.

As the most popular mass culture, films and TV are easy to reach with colorful contents and few risks, and greatly differ from online games. The difference mainly lies in the business model. Based on different business models, films persist in the principle of "pay according to your demands". Though the common, IMAX and digital versions are priced differently, the audience make no complaints as they are served with satisfaction

We can also compare the game with the amusement park, which also belongs to the entertainment industry. The amusement park's business model resembles that of online games very much. People spend much money enjoying themselves in the amusement park, and don't feel unsatisfied. Why? Because they're satisfied with what they've been given. Many relevant services are offered in the amusement park in addition to a large quantity of operating methods, which does satisfy consumers' demands. And thanks to the diversified entertainment items there, people can have different feels every time they have fun in the park, thus making people more prone to come back to the park. The greatest difference between the game and the amusement park is that the amusement park's goal is not to create a complete virtual world. When playing in the park, people feel like they're in a new virtual world, but after leaving it, they return to reality right away. That is to say, the amusement park is not the reality's extension. So, what about online games? The virtual world is totally separated from the reality, or connects with it?

To become a mass culture, online games have to better integrate the mass culture's advantages. Though based on the Internet, online games still need to connect with the reality. And it's also necessary to further make the online games' threshold lower, so as to attract more gamers.

Surely, there's still a long way to go. Films and TV were also criticized widely at the very beginning, and considerable efforts must have been devoted to make something formerly criticized a mass culture. From this, we can say that it's also possible for online games to become a mass culture and be widely accepted.


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