It is updating those games constantly, and it is launching new titles such as Rich Wars and The King of Fighters Allstar. Lineage 2 has more than 30 million players and generated more than $ 1 billion in revenue, and that’s one reason why Netmarble is worth more than $ 6.5 billion in the stock market. The company has more than 4,000 developers, mostly in South Korea, and they’re focused on both original titles and licensed games.
I spoke with Simon Sim, the president of Netmarble U.S., about the growth of mobile gaming, the use of licenses in mobile games, why the company chose to invest in the BTS K-pop group as it was going global. We spoke about the future of mobile games, big licenses, the aborted Nexon deal, mobile graphics quality, and cloud gaming at the GameDaily Connect event this week in Anaheim.
Here’s an edited transcript of our interview.
GamesBeat: What was your talk focused on today?
Simon Sim: The topic was how we deal with IP, and how to meet the expectations of the fans of each IP. I talked about Netmarble’s approach and the lessons we’ve learned.
GamesBeat: Is BTS one of the big ones there?
Sim: Yes, BTS is a big IP of ours. I also explained examples like Marvel Future Fight, and how Lineage II: Revolution is a different genre. Marvel fans have different expectations. They love action and collecting the Marvel heroes. We tried to meet that audience when we launched Marvel Future Fight. Lineage II: Revolution is based on a PC MMORPG, so we made a true MMORPG on mobile to meet those fans’ expectations.
BTS, as you know, is a very popular K-pop idol group. It’s an artist IP. But the fans are very casual gamers, mostly, or non-gamers. We made our game BTS World a very casual game mechanically, something that’s easy to play, and focused on collaborating with the music side. We have a soundtrack release. The game works together with the music.
GamesBeat: What’s the scale of investment in those games? How many developers work on each of these things?
Sim: I need to check the actual number of developers. But my understanding so far is that in Korea, where we have our first-party studios, more than 4,000 people are developing games. These are large-scale games. We need lots of human resources over there. It depends on the genre and the scale of an individual game, though.
GamesBeat: Does it feel like any one of those three is the biggest effort for you?
Sim: As far as the most investment — it’s hard to say. If you look at our track record at Netmarble, we’ve tried to diversify. Lineage II: Revolution is a true MMORPG. That’s a big scale of investment. Blade and Soul is another true MMORPG. Those kinds of games need a lot of human resources. At the same time, other genres — Marvel Future Fight is an action-RPG, but we need to put a lot of content in there. It’s hard to say which one is the biggest effort. It depends on the genre.
GamesBeat: I know you put actual investment into BTS. That seemed very unusual, and very complicated.
Sim: Yes, we invested in 25 percent of Big Hit Entertainment. We think there’s a good opportunity to diversify our game genres and reach a broader audience that way. That was the thinking behind that investment. We’re looking for a lot of synergy there.
GamesBeat: You benefit every time they do a concert.
Sim: [laughs] It’s the same with the Marvel games. Marvel Future Fight, whenever Marvel brings another movie out, we have an opportunity for synergy between Marvel and us. We do a lot of content updates alongside the movies. BTS is the same. We update with a lot of new content. We expect a similar synergy in the future between the activities of BTS as a group and our game.
GamesBeat: There are a lot of K-pop groups that have become very popular. Did you catch BTS as they were going global, or before that? Was it already obvious that they were going to be a global phenomenon?
Sim: When we started work on the BTS game, that was more than two years ago. It wasn’t easy. At the time BTS had already become popular. We expected them to become more popular, but we didn’t expect the kind of scale they’ve reached. It’s hard to predict. But again, it’s the same when we approach other genre. We watch the trends and we have a focus team that develops expectations as far as which IP and genres we should work in.
GamesBeat: Was there anything you could compare BTS to? Did you look at things like Kim Kardashian’s Hollywood and other celebrity games?
Sim: We definitely looked at that genre, at other games featuring celebrities. We played a lot of games and benchmarked their performance. At the same time, the fans are different. BTS is more about music. A big chunk of their fans aren’t gamers. We referenced existing games, but at the same time, we knew we needed to deliver the right style and mechanics to meet those fans’ expectations.
GamesBeat: It’s a big opportunity. They just seem to be getting bigger and bigger.
Sim: Day by day, they’re becoming more popular. We’re very excited about it.
GamesBeat: I’ve become more aware of them lately. One of my daughters is a big fan. She plays the game.
Sim: As I say, we tried to make BTS World a very casual game. We went for a generous model of monetization. Also, we make a lot of content. We have more than 10,000 photos and more than 100 videos. You can tell your daughter there’s more coming. [laughs]
GamesBeat: When you’re updating BTS World or doing live operations, is it very different from when you do that with Marvel and other games?
Sim: The approach is similar. Whenever a Marvel movie is coming, we do content updates and new character releases or costume releases. We try to find synergy and market opportunities between what Marvel’s doing and what we do. That’s how we’ve kept Marvel Future Fight popular around the world. In our experience with BTS World, we have a similar approach. We try to find synergy in our updates and marketing activity. The IP holders are very different, though. In some respects we think differently.
GamesBeat: A deal between Netmarble and Nexon never happened. Were some people disappointed?
Sim: I can’t talk about that. [laughs]
GamesBeat: It seemed like a big false alarm. “We’re going to sell… No, we’re not going to sell.”
Sim: I don’t know. I don’t think our company has any comment about that.
GamesBeat: It does feel like the deal-making space is very active in gaming.
Sim: True. These days there’s a lot of investment going on. We’ve seen that too.
GamesBeat: Eric Goldberg says there’s something like 17 game-focused VCs working right now. You have Apple, Google, and Amazon. There’s more money than ever being invested in games.
Sim: We think so too. We’re proactively looking for investment opportunities. We’ve become the largest shareholder in Jam City, and we acquired Kabam. Big Hit was another case. We’ve invested in some studios that we’re going to announce later. We’re also looking in the western market for potential investments, to extend our genre portfolio and our presence on a larger scale.
GamesBeat: Is mobile still going to be your main market?
Sim: Yes, mobile is still our main market. At the same time, we’re also trying to extend our games. A couple of weeks ago we announced a publishing deal with an HTML5-based MMORPG. We keep watching the trends. We’ll try other approaches beyond mobile.
GamesBeat: Does esports feel like an opportunity for you?
Sim: Yes, esports is an important topic for gaming in general. We’ve already launched King of Fighters: All Star in Korea and Japan. It’s a popular fighting IP, and we’ve made a beat-em-up with RPG features. We’ve had tournaments in Japan and Korea. Lineage II: Revolution also has realtime PvP features, and we’ve held massive tournaments in Korea. Some of our games, we’ve tried to experiment with esports features. We keep looking for the right genres and the right games that are more esports-friendly. We’ll keep trying.
GamesBeat: As far as growing more in the west, what does that mean for you?
Sim: We recently announced our earnings for the second quarter, where 40 percent of our revenues came from North America and Europe, including revenue from Jam City and Kabam together. The west is already a big market for Netmarble. We’ll keep bringing strong IP, more western-friendly IP, like King of Fighters, within this year. We’ll also keep looking for investment opportunities.
Our approach to the western market is very important, through both investment and launching our own IP to western audiences. We have a very strong lineup for the rest of this year and early next year. We’ll be showing you more games once we’re ready.
GamesBeat: I got a good look at Black Desert on mobile at Gamescom. They had an interesting decision to make about taking a really beautiful PC game to mobile and optimizing it for mobile hardware, versus bringing something like Black Desert Online to Google Stadia and then having it be playable on mobile devices that way. Both approaches would work, but they decided that optimization for mobile would work a lot better. The best way to play that kind of game was with a build that was made for that platform.
Sim: We’ve had a similar experience already with Lineage II: Revolution. We customized a lot of features from the Asian version when we developed the western version. An Asian-friendly male warrior, for example, isn’t as popular with western gamers. We changed a lot of things about the visuals, UI, and UX. The content balance and playtime per day is different between Asian gamers and western gamers, too. With just one build it’s hard to match different behaviors. That’s why we made the decision to separate the builds.
Content consumption-wise, the Asian market is very interested in growing toward the goal of endgame content. In Lineage II: Revolution, the end content is realtime massive-scale battles. Western gamers, though, they don’t as often get to the endgame content without dropping partway through. We put in a lot of smaller-scale PvP content during the journey to the endgame. We’ve learned a lot doing culturalization, learning how to fit the two markets. The user behavior is very different, especially in MMORPGs, which call for so much time and effort.
GamesBeat: If Stadia comes along, do you think you’d have to build something just for Stadia, if you wanted to work with Stadia?
Sim: We haven’t talked about our strategy with Stadia or other cloud-based platforms yet. But we’ll keep discussing and thinking about what will be the right way to go. Once we’ve made a decision, we can share more with you. But we have a couple of options we can consider.
GamesBeat: Is there anything else you’ve been paying close attention to?
Sim: King of Fighters: All Star is coming soon. We’re trying to make a more western-friendly game. The IP is already popular across North America, and even Latin America. We’re very excited about that.
Another topic I talked about during a previous session, we’re trying to embrace games based on our own IP. Everybody’s Marble has been very successful across Asia, and so has Seven Knights. We’re trying to build franchises around them, to extend that IP across a bigger fanbase. There are two approaches we’re working on now. Stay tuned and we’ll keep you updated.
Disclosure: The organizers of GameDaily Connect paid my way to Anaheim. Our coverage remains objective.