Interview: Nexon's Min Kim on Console Games, Counter-Strike, 'Bubble Babies'

Nexon is continuing to make headway in the U.S. Last year saw its successful Combat Arms launch, and this year, and this year it's bringing Dungeon Fighter Online from Neople, the developer it recently acquired. The company has several more products up its sleeve, but still considers itself to be feeling out the market in the U.S. We spoke with Nexon America VP Min Kim about a wide range of topics, from Counter-Strike Online's viability in the U.S. to the state of Nexon's console initiatives, to the closure of the company's North American development studio in Vancouver. Perhaps most interestingly, Kim stated that the company is currently not interested in tackling the high end MMORPG market and going head to head with WoW or Aion. In fact, Nexon views services like Club Penguin and others as feeder services or gateways to Nexon's products, which will pay dividends in around five years time: State of Nexon Today How is Nexon actually doing in the States? The Vancouver studio did close down. That made people wonder a little bit. MK: Yeah. That's really unfortunate. That was a completely separate office from my office. We're the publishing arm, they're the development arm. The economy going really sour last year was very scary for the company. The burn rate on that development house was very, very expensive to upkeep with the currency exchange and whatnot. So, I think that's what led management to shut it down. It wasn't that we're doing poorly here. If you look at some of the numbers we put out last month, I think we had 30-something percent growth on July over July of last year. So, our numbers are actually doing really good. We haven't announced yearly numbers yet, but everything's extremely positive. And with Dungeon Fighter coming out, I think it's going to be even larger. having a lot of focus internally on the North American market just because our performance has been so good, especially with the rest of the market kind of being down. I think a lot of people are moving towards online. Yeah, a lot of people are looking at free to play certainly, even domestic companies. It's a lot trending that direction. MK: Did you see that Stanford talk with the EA chief creative officer (Rich Hilleman)? I was pretty shocked that he came out publicly and talked about it. I guess he said that if you want to look at the past of gaming, look at Japan, and if you want to look at the future of gaming, go to Korea. I was really surprised. That's awesome. We're making some pretty huge predictions here right now because we feel that... I've been trying to coin this word called “bubble babies.” We're on the ground floor. People talk about, "Oh, everybody's grown up with the internet." It's not true. People are born close to the internet, but people that have really grown up using the internet are the kids that were born during the dot com bubble of like 99, 2000, 2001. Those kids are somewhere between like 9, 10, or whatever right now playing Club Penguin. So, we've been saying, "Hey, this Penguin Army is going to grow up, and by 2012 and 2015, they're probably going to be 16 years old, and they're going to be really used to playing online experiences on the PC." And I think that's when our business is really going to take off. Yeah. I am still getting emails that say, "Move over Club Penguin" as their opening remark. MK: Those are huge feeder services for us. We looked at Club Penguin, Free Realms, and Fusion Fall. All those services, we look at as great feeder services for our games when they get older and graduate from those. How has Combat Arms been for you here? MK: It's destroying right now. Combat Arms is actually doing really, really well. We haven't announced our most recent numbers, but we hit another record. With a couple of the new modes that have come out, the revenues have been going up quite a lot. And Counter-Strike Online? MK: That's ripping it up in Asia. Obviously, we don't have the rights to publish that in the States, and I don't know if Valve would ever give it to us. Do you think there's any way? MK: I don't know. [laughs] That's something we'd have to talk to them about. But in Asia, it's doing amazingly well. I don't know if there's public numbers on it, but if we have them, I'll send them to you. The concurrency should be pretty ridiculous. It seems like something that you could maybe co-publish with Valve. They could release it on Steam, even. MK: Yeah. We could definitely release it on Steam. We'd just service it for them. I'm just not sure if they'd allow somebody else to though. And we've done a lot of things to make that game an online game in Asia that maybe they may not have necessarily done here in the States. I don't really know... Yeah. It's less of a Valve game than a Nexon game, I guess. Who developed it there? MK: We did. We basically took, I think it was Counter-Strike 1, and then we turned it into a microtransaction game. We've added stuff like zombie mode and a lot of different items. Counter-Strike has a very distinct playstyle and a brand here, so I'm not sure what they would say about that. If we were to do something like that, it'd probably go out as something else like Counterstrike: Freedom Zone or something. Logistics Do you see more value in a kind of closed money system (like Nexon Cash) than a more open one (like a universal currency)? MK: Not necessarily. It's closed loop within our service anyway, and it's also open loop within our service, so Nexon Cash is used across all the different games that we have. So, there's really not a huge difference there other than just opening up currency for other people to use. At the end of the day, it's just basically them sending money to you. In an open loop, they're still going to take back currency and put it in their system and then offer it for the games that they're publishing, so it's pretty much the same thing. It's whether you allow other people to access your mode of payments or not. Do you use multi-sharded servers? MK: Yeah. Lots of different servers for Maple, and then within the server, a bunch of different channels. Why do you do it that way versus single shard like EVE does? MK: I don't know if it was necessarily intentional in terms of the service when we first started out. I think it had a lot to do with just technical, just the areas and the maps that you create. So, the way that the game's made, there's a finite amount of space that's created as geography. If it were single-sharded, that would have to be huge. I'm not exactly totally familiar with EVE, but I don't know if they would run into the same problems with what if you had like 70,000 people show up in one town. They do have difficult grouping problems. MK: Yeah. I think that has a lot to do with it. It's also that when you bring new players to the fold, like when they jump into a server that is more mature, the economy's going to be different and whatnot. So, if you jump into newer servers, then you can kind of start out on kind of more equal footing. I think it's pretty interesting the way that theirs goes because they don't have as much control over their economy, really. When they get a lot of people in one area, it usually has to do with trade, so they try to spread the trade out, but it just winds up creating another hub. MK: I kind of like it being sharded. I don't like the fact that it's difficult to communicate or like meet certain people because it's sharded, but I definitely like the fact that if I want to hunt on this particular map, I can maybe find another instance of it where it's not going to be completely full. I love the economy. If I jump into the game and try to buy this hammer, it's not inflated as some of the older servers might be with people that have been around for a while and have made a lot of money. Dungeon Fighter Online What kind of numbers are you anticipating for Dungeon Fighter Online? Min Kim: It's tough to predict. [laughs] I think the numbers are going to be really big because our closed beta has probably been better than any other beta numbers that we had before. It sounds pretty corny, but we think the game is really approachable. So part of my talk (at PAX), I was talking about how back in the day when there was arcade games, people would be like, "Move over. I want to try that." Now, it's kind of gone into like, "Hey, do you want to try this game." They're like, "No, I'll just watch you play." It's kind of transitioned over to that, and I think Dungeon Fighter is going to bring all that stuff back where people are just going to try and have fun. So, what is (DFO developer) Neople doing right now? Are they just supporting the North American launch? MK: Those guys are really busy because they're really successful. We've kind of taken a different approach where we didn't just work with them overseas like through vid con or whatever. We actually had a lot of the developers come move here for like over a month. They've definitely been here over a month. I'm sure they want to get back to their families, but we don't want to mess it up. Yeah, they're really busy. China, I think, announced publicly that they hit over 2 million concurrent users, which is like insane. Those guys are busy. They're raking in some serious dough, right now. It's interesting because in the console space, you pretty much say, "So, what are you doing next?" In the online space, it's very rare that there’s a “next” thing unless you’ve failed. MK: "We're doing the same thing next. It's just going to be better and bigger." "We're doing it more", yeah. That was kind of what the Neople guy said when I asked him why they wound up getting acquired. He was like, "Well, I think Nexon, all their projects were more long-reaching, so they were going to come out in a while, and they wanted some immediate cash flow." [laughs] MK: I think the other thing about that with the acquisition is that we're so good internationally that we kind of mastered taking our domestic titles and servicing it in China. We've got awesome partners across the globe. And even in the U.S., we have a publishing platform here that nobody else really comes close to. So, taking a title like Dungeon Fighter, which has done amazingly well in Korea, but I think we can be extremely helpful in terms of it catching its full value in the rest of the world. That's probably why we made the acquisition. Yeah. Actually, he did mention that, too, that Nexon had the power to really globalize in a way they couldn't. So, I guess what's next for you guys after DFO is Dragon Nest, right? MK: I think that this year, we've been saying that it's the year of focusing on foundation. We've been here remotely since 2005. We've been here officially since 2006. We've been working our asses of to build up the platform from our billing, like our prepaid cards and all that. This year, it's really been about building up our resources and our ability to scale so that we can launch more products next year and more services next year. Right now, we're at four services with DFO. Next year, we're going to be launching many more titles. It's not just going to be one title. So, it's really about getting ready for that. Next year, the year of the tiger, it's really cheesy, but we're saying it's the year of the crouching tiger. The years following, we'll probably reap the benefits of it. We've been pretty patient right now, just kind of getting ready for that explosion, you know, building out our platform with things like (Nexon's new game hub) BlockParty so that we can be more meaningful to the North American base and be more commercially viable in a mass market type of way versus just being seen as a foreign import company. Nexon and Consoles Do you have any plans to possibly bring it to consoles. I've been asking about that for a while. MK: Yeah. Probably not. And I'll tell you why. I don't think you can put a free to play console right now. You can put a game out there, but I think that... I don't know about Sony, but I'm pretty sure that Xbox doesn't put out a game for free unless you force somebody to buy some stuff with it when they first get it. And if they did allow you to put it out for free, the way they kind of... And this is just me talking. It's not what Xbox said. The way that they track all the patches and all the updates and stuff... We've got to update the game like every two weeks, and they'd have to continuously kind of be involved in that process. I don't think we'd be able to run the business as is. Because at minimum, we got to put in the items. We got to put in maps and modes and all that stuff. So, I think it's going to be tough. Well, what about that kart racing game that they announced at E3? MK: But Microsoft made it, right? Yeah, but it's still free to play. MK: Yeah, but it might be their own game, so they might have different rules for it. I've heard from other people that when they put out DLC or different stuff, they don't want people to put out a lot of free content. It's understandable because they're paying for the distribution and the bandwidth and stuff. But that make it impossible for us because we got to patch every month. Whatever happened to Mabinogi for 360? MK: Mabinogi 360? I remember it was supposed to come out a while ago. I think it got scrapped. (This has since been confirmed by consumer site thisisgame.com.) That’s a shame. MK: It would probably suffer the same things that I was talking about with the updates and whatnot. I think that in Korea, it would have probably had special consideration for it to help the penetration of Xbox, but I don't think that we'd have the same privileges here in the states. And Maple Story DS is still not out here either. MK: No…and there are definitely no plans for the U.S. that I've heard. I'm curious to know what you think about Aion and it coming out over here. When I was in Korea, everybody was waiting to see how that did because it was like the first big launch game in a while. What have you thought watching their progress and success or non-success? MK: It's crazy. Before the game came out, I think there was a little bit of that skepticism, like when WoW first came out. It was like, "Oh, I don't know if it's going to be big or whatnot." People were really careful about it. I don't know all the numbers, but it’s kicking some serious butt right now in Korea and China. It's getting a lot of really good reception there. WoW is an incredible game, and I think it's got that community aspect that's going to make it very difficult for somebody to really take their community away. I think it's going to be a really good option for people that are looking for a new game to play. And it's pretty polished. I don't know if you've seen it. I've looked at it, but I haven't played it. Is Nexon thinking of tackling that space as well? I mean Dragon Nest is more of like a large budget type thing. It's a different style. MK: The games that we have in Korea, not launched yet, but we've got Dragon Nest, licensed by Eyedentity. It looks very console-esque, but that's not an MMORPG. That's kind of more like Dungeon Fighter if you want to do dungeons together. I think that's going to be really good. And we've got another game called Mabinogi Heroes that's graphically incredibly amazing. But I don't think we'll be getting into the MMORPG space, like the subscription space. That's really not the business that we're in right now, so we don't really have any public plans for something like that. Do you ever see a life for free to play on consoles? Do you think that it's even necessary? MK: Not necessarily necessary, but I think it would be great. I feel like players would appreciate that, and there are certain types of games like Kart Rider that if they were on console, I think they would do very well. It's just a different interface, and it's a different group of users that grew up playing console versus PC. That might be a more viable place to go reach those guys, where they could have a good time with it. So, it would be great if they would open up how their service works and if they would create their service around being able to service free to play games. I think it could be a great thing. It seems like PlayStation Home was kind of a step in that direction in a way, but it didn't really make the full step. MK: Yeah. I don't think so. I haven't talked to any of the Sony guys really about the business, but I think everybody is trying to figure it out now. As a platform, I think it definitely could work. It seems like you would be the people to talk to them because you've done a lot more of it in North America. MK: And we've got games that have already proven themselves. I think with a lot of other new free to play games, it'd be tough on Xbox and a PlayStation to take a chance on it, because who knows if that game is going to make money. It might get a lot of users, but they might not be able to convert on the money side. But if you were to take a game like Kart Rider or Dungeon Fighter, we know that those games would make money. So, if we were just to be able to bring in users, we could make money off of those games. I'm not sure if we'd be open to like a 30 percent cut like Xbox takes. We have our own payment system, and it's doing pretty well.