AGDC: Nexon's Kim On The North American Free To Play Business

When Min Kim of Nexon, a company famous for popularizing the free to play MMO, asked his Austin Game Developers Conference audience how many people were developing or interested in developing free-to-play MMOs -- and roughly 70 percent of the audience raised their hands. Some hands went down when Kim asked how many audience members had played Nexon's Maple Story; by the time Kim asked how many had played the company's Kart Rider, only about 20 percent of hands remained. His point? "The first step to developing free to play MMOs is to play the games. People think they know how to make these games, and yet they’ve never played a FTP MMO before. I think it’s really irresponsible," Kim chided. "If you can’t do it, get an intern to do it and tell you what it’s like." Nexon currently has 1,900 employees, and 15 concurrent games globally, with investments in some others. According to Kim, many people criticize the North American free to play business, saying it’s not actually popular. To counter this, Kim revealed the company’s North American numbers for 2005-2007, based on the three games running in the U.S. during that time - MapleStory, Audition, and Mabinogi (Combat Arms was released in 2008). In 2005, Nexon America’s revenues were around $650,000. In 2006, when they added Paypal as a payment option, sales rose to $8.457 million, based on item sales. In 2007, once Nexon released its Nexon Cash cards to retail stores, revenue jumped to $29.334 million. “South Korea is still a big market for us,” Kim admits, “but the split is now 50/50 with overseas markets,” which includes the Asian and U.S. markets. One of the barriers to free to play games is that they’re on the PC, which is less of a known platform for a number of traditional gamers. Kim sees this problem as going away. “For those kids (playing Club Penguin) it’s really natural for them to play games on a computer,” he says. “If you get a normal gamer in front of a computer right now, they might not get it, might not know WASD controls. They’re not used to playing games on the computer. I think in about 5 years time, the teen market is going to get really huge, because everybody will be able to support that.” While many of the free to play games currently come from Korea, Kim feels that the market will eventually be dominated by Western titles. “We’ve seen this happen in other places like China,” he posed. “The big games now are from Chinese developers. I think the same thing will happen in the West, with Western-developed titles.” Free to play games, Kim says, are often viewed as only being for the casual or new players, but he calls this a gross misconception. “We don’t make games for non-gamers. We make games for gamers that are accessible to non-gamers, and that’s a big difference.” And yet, he says that it’s only since launching Combat Arms, a free to play massively multiplayer FPS, that the company got any recognition or notice from core gamers, and even from traditional media outlets. A developer looking to make a free to play MMO should first be playing the games, Kim says, but also they should “…try out and study all the shops. There are tens of games out there that are free to play. I think if you visit those shops, see those games, I think you’ll take one piece of learning from each one.” Focus on fun, not just on what items you can sell. “Have an idea about what your business model is,” he advises, but don’t go overboard laying out your business plan completely from the beginning. “Don’t have all your items and categories pegged out. Make sure you have a fun game, first.” 9 times out of 10 the ideas you’ll have at the beginning will be wrong. The players will tell you what they want to buy.” “The free way is not about collecting tolls,” he says, speaking out against the “velvet rope” model of time-limited free plays. “It’s not about shareware. Expansions and content are generally free; it’s all about extending the lifecycle so you can continue to sell items, or subscriptions. Do not lock players out of real content.” Unfortunately, the majority of players still need to be educated about what free to play is, says Kim. “most gamers when they click on a banner or see something free to play, they perceive it as lower value. I think PR is going to play a big role in free to play…there are a lot of big game sites out there that still won’t review free to play games.” While Korea still dominates the market, Kim sees lots of potential in the U.S. “This is something Korea hasn’t done well,” Kim admits, “and I think something that North American developers could do a lot better. And that’s carefully building the initial experience of free to play. It’s incredibly important is to protect those new players. Veteran players will spank a new player who just happens to wander in, so make sure they start in a safe place where they won’t just get headshot 15 times.” Free players do represent a lot of overhead, increasing server costs, but Kim chooses to look at it from another perspective. “Free players are definitely a good thing,” he offers. “They act as content for other people. If you think about an FPS like Combat Arms, we add a few maps and things like that,” but it’s really the experience because they’re the opponents in the game. Though much of Min Kim’s talk was familiar, the audience was very receptive – a lot of these lessons haven’t yet been fully learned and internalized. As the market broadens, with EA now in the market, these lessons may become harder to avoid.