The Dependency of Southeast Asia
Many local game developers in Southeast Asia, mostly small- and medium-size companies, were start-ups in the 1990s or 2000s. They sustained themselves through contracted, skilled work that they accepted from international game companies seeking to outsource projects. Although some companies produce small-budget games, such as mobile and flash games, they also produce quality art assets for global titles. They are perfect subcontractors for cross-platform games that operate on consoles and PCs, as well as mobile devices.
Several global game companies have chosen to set up studios in Southeast Asia because skilled talent there can be hired at lower pay rates. Such companies include Electronic Arts, Lucasfilm, Koei, Gevo, and Ubisoft in Singapore; Codemasters Studios in Malaysia; Square Enix and Gameloft in Indonesia; Activision, Bioware, Bungie, and Eidos in the Philippines; and Gameloft in Vietnam. In addition to serving as satellite production hubs, these operational outposts are sometimes used to distribute products in Southeast Asia as well.
Korea as a Rising Global Exporter
In East Asia, countries like Korea and Japan have a long history of colonial dependence, but they are not satisfied with being culturally colonized nations. In recent years, the concept of exporting culture has taken hold, particularly in Korea because of strong government support. Nowadays, Korea is the major hub for creative industries both in Asia and globally, particularly the games industry. One major breakthrough in addition to financial support is that state policies encourage a sufficient supply of cultural labor to support the industry.
The year 1997 was a watershed year, when the Korean government announced a scheme to boost the local games industry, including a plan to set up a Korean Game Promotion Centre (KGPC). This not only meant that governmental policy was focused on developing the Korean games industry, but it also set in motion a series of related state initiatives that attempted to reverse one-sided importation of culture from the U.S. and European markets. Early efforts involved the reorganization of governing bodies. For example, in 1998, the games industry had officially been grouped with cultural industries, implying that games were not only entertainment but also part of the national cultural arena. The launching of KGPC in July 1999 and its Japan branch two months later marked major steps in the government’s plan to nurture its national games industry. The mission of KGDI (Korean Game Development and Promotion Institute, later renamed the Korean Game Industry Agency [KGIA]) was to establish a strategic platform between the government and the games industry. The strategy included providing the industry with overseas market information, infrastructural support, and subsidies for research and development. In this way the government provided industry practitioners with timely technological and marketing advice.
The formation of the Ministry of Culture and Tourism (MCT) in 1998 and the transfer of the cultural assets policy portfolio, including the games industry, to MCT’s jurisdiction served to enhance industry expansion. The launch of Cyber Korea 21 one year later accelerated the development of the online games industry, particularly by speeding up broadband technology development, rapidly increasing the number of Internet users in Korea, and enhancing national Internet education. Moreover, the subsequent launch of the Korean Creative Content Agency (KOCCA) provided these industries with additional support, including equipment rental, investment, technological training, international marketing advice, and research support for medium- and long-term development, as well as developing strategic partnerships with overseas buyers and suppliers. To nurture talent for the booming games industry, the Korean government started the Games Academy in November 2000. A games investment association and a games investment valuation association were established in December 2000 and June 2001, respectively, to nurture talent and obtain venture funding and investments to meet the needs of the rising games industry. Such outcomes were indicative of the visible success of a state-led industry policy.
The critical mass of cultural labor formed under the state-driven model unquestionably adhered to the philosophy of the state, although in fact it is neither a free-market nor a neoliberal model, but is instead similar to the Hollywood model for cultural export. Consequently, the mind-set of workers in the Korean gaming sector is very close to the values and lifestyles of their American counterparts, largely because the United States is regarded as Korea’s benchmark of cultural exportation.
China's Global Expansion
Like Korea, China changed from an importer of online games (initially from Korea) to a major international player and exporter. According to the official statistics released by Ministry of Culture, in 2010 the total annual revenue of mainland China’s online games industry reached $5.7 billion. It also became a substantial exporter of online games. In 2011, Chinese game companies generated $360 million in overseas sales revenue from thirty-four games that performed especially well in Southeast Asia, North America, Korea, and Japan. Such success has encouraged China’s game giants to extend their overseas reach by acquiring major game titles and companies. In 2011, Tencent’s acquisition of Riot Games, the developer of League of Legends, for about $230 million is typical of the global expansion of China’s game companies. League of Legends is the most popular PC game in North America and Europe, with an average of 27 million gamers daily.
However, the industry developed much faster than the regulations did. Before 2004, there were no regulations or cultural policy to drive or control the industries.12 In subsequent years, Chinese authorities introduced a series of regulations: the Regulation on Digital Publication in 2007, the Regulation on Publishing of Digital Publication in 2008, and the Administration of Software Production in 2009. A censorship system was promulgated in August 2010, when the state delegated such censorship to the provincial level (People’s Congress Decision on the 5th Batch Cancellation of and Delegation of Approval to Level of Management and Controlling Unit). In the name of protecting minors, most of the regulatory guidelines focus on controlling violence and indecency. However, my interviews with the committee responsible for censorship revealed that ideological controls are fairly common, thus hindering the import and publishing of foreign games in China.
Despite these stringent controls, the authorities have not hindered private investment and game support. Instead, as incentives, tax reductions are given to game companies that export, and the provincial and local authorities set up technology areas or cultural clusters to cater to the needs of game companies. The challenge for game companies, as I will describe, is the general lack of talent and the high cost of recruiting teams to develop games.
