The following is an excerpt from MALATHI NAYAK | October 4, 2012 | nytimes.com |
SAN FRANCISCO — A decade ago, a developer from the South Korean game maker Nexon threw a few lines of code together to create an image of a flower to present to his girlfriend, buying himself more video game time as she sat impatiently by his side at an Internet cafe.
And, so the industry legend goes, the “virtual good” was born. In the years since, digitally created items for games and social media — from beers on Facebook to weapons in role-playing worlds — have grown into a $15 billion globe-spanning business. They helped generate the likes of Zynga and underpin a fast-expanding online gaming industry.
Now, companies like Nexon that pioneered the model across Asia are muscling onto Zynga’s turf, hoping to cash in on fast-growing U.S. spending by bringing their distinct Asian brand of fast-paced “freemium” games — free with optional in-game purchases.
With PC sales stagnating even in China, the industry’s heavyweights are increasingly doubling down on mobile services and targeting the Western market as more smartphones and tablets land in users’ hands. Pushed also by slowing growth in casual games on Facebook, they have stepped up their investments this year.
“The emphasis of the Asian publishers is to successfully set foot in Western markets, and that gives you a blueprint of what’s to come,” said Joost van Dreunen, managing director of the digital goods intelligence firm SuperData Research. “The free-to-play games for mobile are where we identify huge growth.”
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