Farewell PC, hello Net
It is often said of Taiwan's gaming industry that there is "Soft-World down south, Softstar up north," a reference to the fact that Soft-World is headquartered in Kaohsiung while Softstar is located in the Taipei suburb of Chungho. Softstar Entertainment president Eric Lee first started producing and marketing games on CD 14 years ago. He recalls that the company only had 20 people when it launched the first edition of the smash hit "Emperor's Sword," and everyone worked practically around the clock for months putting the game together. That same spirit is alive and well today in the firm, as one will quickly see upon entering the game development department. Sleeping bags and coffee pots are everywhere!
Gamania Digital Entertainment, which rocketed to fame two years ago after it started acting as agent for a number of Korean online games, is another company that got its start developing game CDs. Gamania strategic operations unit COO Bryan Shen confides that every single game CD was a gamble; sometimes they would struggle for two or three years to finish a game but get it to market only after that type of game had already gone out of fashion. Seeing a product withdrawn from the shelves just two weeks after launch is devastating.
Wang Chin-po explains that sales of game CDs are very much dictated by fashion, with old products constantly fading from the scene and new ones taking their place. "No one stays on top forever." South Korea is currently the worldwide epicenter of PC gaming, but seven or eight years ago no one was the least bit interested in a South Korean product. In fact, at that time Soft-World's "Romance of the Three Kingdoms" was selling like hot cakes in South Korea.
In 1996, much to everyone's surprise, a Korean game, "Lineage," took the gaming world by storm. Then came the Asian Financial Crisis of 1997, which hit South Korea especially hard. In response, the Koreans poured even more energy into developing online games. The Internet population began growing, broadband infrastructure was beefed up, and Internet cafes opened up everywhere. The country suddenly emerged two years ago as the undisputed king of online gaming.
Wang reports that he also began to take an interest in the virgin territory of online gaming four years ago and advised his company to throw itself full-force into the development of its own products. But the Koreans beat everyone to the punch.
Taiwan's online gaming market today has been gobbled up by South Korea and Japan, and Soft-World is gradually coming to accept the situation as permanent. Determined for the first few years to "beat the Koreans," Soft-World finally threw in the towel and began distributing South Korean products this past March. The Korean game Ragnarok went online in Taiwan in May and had 60,000 paying players in just a few months, giving Soft-World a big revenue boost.
Each player a protagonist
Wang freely acknowledges that Taiwan got started later in online gaming than South Korea and has devoted far fewer resources to its development. There is a clear quality gap, especially in the key area of "design concept."
Wang explains that designing a game CD is like a duel of wits between the developers and gamers. Developers work hard to throw in plot twists and excitement, complemented by attractive graphics and audio, in hopes that gamers will exclaim, "Wow! What a cool game!" But a developer who takes that same attitude toward online gaming is bound to fall flat on his face.
Why? Because with online gaming, the product is a virtual community, where game plot is not important. What's important is a stable, intelligently conceived, and fun place where gamers can do whatever they feel like.
Says Wang: "The protagonists are the gamers themselves. The important thing is the interaction between people." The gamers move about in the gaming space as they please, chatting, making friends, buying, selling, and competing. The provider's most important job is to maintain cohesion in the community. The provider might, for example, suggest that the creator of a particular game occasionally introduce new challenges or new pets to keep the gamers interested.
In addition, a game's sound effects, visuals, smoothness of animation, and balance in the plot have to be just right. Wang explains: "You can't have people who've been playing for just three hours defeating someone who's been at it for three days."
Technical virtuosity may not play to Taiwan's strength, but the Confucian cultural heritage shared by the nations of East Asia most certainly does. Whoever can delve into Chinese cultural themes most successfully has a leg up on the competition in these markets, and Taiwan is obviously in good shape on this count. Soft-World is planning to put "Romance of the Three Kingdoms" online in a bid for the allegiance of gamers in Japan, another country where the ancient tale is quite well loved.
Familiarity with similar themes puts Taiwan in excellent position to attack the mainland China market. Oliver Weng, director of the Network Multimedia Industry Promotion Project at the IDB, points out that with broadband access still limited in China, CDs constitute the mainstream. Taiwanese products command better than half of this market segment, and most of them rank in the top ten, a sign that gaming tastes are not far apart on the two sides of the Taiwan Strait. Softstar's monthly revenues in the mainland topped RMB10 million for the first time in October, while Soft-World's Wang Chin-po expects mainland China to overtake Taiwan as his firm's top market by 2004 at the latest.
In the future, what does Taiwan need to do to overtake South Korea? Wang feels that acquisitions would be the quickest way for Taiwanese firms to achieve the feat. With vigorous encouragement from the South Korean government, gaming firms are popping up in that country "like mushrooms after a spring rain," generating fierce competition and a crop of companies in serious need of a cash infusion. Such firms would be willing to sell out for the right price.
Oligopoly
In the booming online gaming market, a company that creates a popular community can count on the gamers themselves to rope in their friends, at which point the game takes on a life of its own. And a very long life it turns out to be. The Taiwan version of "Lineage" has attracted a total of 2.2 million members since going online two years ago, and once set a record by holding a multiplayer online gaming event with 160,000 participants playing simultaneously. And the game's popularity shows no signs of tapering off. In fact, firms are already locked in a fierce battle to be chosen as the Taiwan agent for "Lineage 2," which isn't even scheduled to go online until next year.
The strong tendency of online gamers to flock together results in a small number of games crowding the rest out of the market. A market like this reaches the saturation point very easily. Where only one or two new online games used to appear in a year, 12 new games hit the market this year during the summer vacation alone.
In contrast with the high-cost, high-risk, high-stakes online gaming market, game CDs played on individual computers offer game software companies in Taiwan more hope for success. Eric Lee feels that CD games give gamers the opportunity to enjoy themselves in privacy. And the games have a stronger story line and better audiovisual effects. These strengths have attracted a corps of diehard loyalists.
The biggest headache for CD game producers is piracy, a problem they will be solving in the future by going partially online. Gamers will still use CDs, but they will have to register online before they can use them. And some firms are planning to update their games at regular intervals, with gamers required to go online monthly, for example, to download new challenges and tasks.
Integration in the offing
The most intense competition in the video game world is between South Korea, Japan, and Taiwan. But what is the outlook for the worldwide market in the coming years? Will TV game consoles be knocked from the top spot? Eric Lee says it's too early to tell. TV game giant Sony isn't too keen about online gaming. They don't think the "mass melees" of online gaming can compare with what PlayStation 2 provides: a clear picture, two or three characters duking it out, and impressive audiovisuals.
But things are in flux. Sony recently signed an agreement with Taipei's WindThunder Era for joint development of PlayStation-compatible online games, and Microsoft Xbox is on the prowl for a partner in Taiwan.
In any case, Oliver Weng sees an inevitable convergence between TV games and PC games because there is little difference between the two on the manufacturing side; it is simply a matter of switching between them on the user's side. To have the best of both worlds, Taiwan would naturally like to take a multi-platform approach, producing games that can be delivered via any number of different vehicles, whether it be computers, PlayStation, Xbox, cell phones, or PDAs. The day may come when a game really can be played any time, any place.
Wang Chin-po notes: "The gaming public in South Korea features a very even age distribution, ranging from 87-year-old grannies to seven- and eight-year-old kids. But in Taiwan the market is bunched up in the 10-25 age bracket." In his opinion, gaming will have to become a national pastime enjoyed by all if it is to remain permanently on the scene. The gaming industry has a long way to go to reach that goal.
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