Staking a gaming claim

Renowned Chinese saga novelist Jin Yong may never have imagined his works would be popular with everyone from retirees to schoolchildren. Wang Chin-po, founder and president of Soft-World International Corp, the nation's largest online PC game provider which vitalizes Jin Yong's characters in the virtual world, talked with 'Taipei Times' staff reporter Jessie Ho about his vision to turn online gaming into Taiwan's signature industry

By Jessie Ho  /  STAFF REPORTER

Mon, Jul 05, 2004 - Page 11

Taipei Times: Online PC games have been enjoying considerable growth over the past few years in Taiwan, but one researcher said the market is nearing saturation, given that annual growth and game titles are declining by the year. Do you agree?

Wang Chin-po (王俊博): I don't think so. From the point of view of the market, broadband Internet subscribers here will only increase with time, which is good for the development of the online gaming industry.

According to our survey, one-fifth of Internet users are online gamers in Taiwan, while the ratio is one in three in South Korea. It shows we still have room to grow.

On the other hand, like the movie business, which counts on summer hits to lure consumers into movie theaters, I find that the gaming sector also brings in new segments of gamers with killer games. One example is our staple Ragnarok Online (RO, 仙境傳說). Before we rolled out that product, our rival Gamania Digital Entertainment Co's (游戲橘子) Lineage (天堂) series dominated the online gaming market with 180,000 members. But rather than snatch away Lineage members, we targeted female gamers who prefer light and casual games.

As a result, subscribers to RO are now hitting 300,000, and many of them are first-time players. Based on this experience, I believe strong and diverse products will continue to bring in new game lovers.

TT: Soft-World International Corp (智冠科技) is doing well in Taiwan and China. What distinguishes the two markets?

Wang: Taiwan is a free and democratic society with no laws regulating game publications. The upshot of this open environment is that game providers are allowed to release diverse categories of games, and gamers' tastes are also diverse. For example, role-playing games have been popular in the market, but strategy, sports and puzzle games are grappling for their market segments too.

Chinese gamers, however, tend to concentrate on a specific game category. Unlike Taiwan, Internet infrastructure is still not installed throughout most provinces in China, so most gamers there flock to cybercafes to play group role-playing action games together. Individual games are therefore less popular. Besides, the Chinese government censors game publications, which more or less hampers the development and diversification of the industry.

TT: Like Soft-World, many local game providers have also made inroads in the massive Chinese market, but few have struck gold in light of heavy competition from their South Korean and Chinese counterparts. How did you succeed?

Wang: We entered the Chinese market about 10 years ago, when Taiwan-produced PC games were overwhelmingly popular there. But the market was filled with pirated games. Consumers at that time just went straight to computer stores and got cheap pirated games, leaving us no room to survive. After struggling for two years, we adopted a detour strategy rather than meet our illegal competitors head on. We started to use 30,000 to 40,000 newsstands there to distribute our gaming magazine. And after the magazine's circulation grew to a certain size, we offered games with the magazine at prices that were cheaper than those of the pirated versions. The tactic was more than successful and we still use it now.

Another important key strategy is working with Chinese companies. Overseas gaming companies cannot apply to distribute games in China, so we forged partnerships with local companies and asked them to apply for us. Hence, we can bring our products directly to the market instead of being a mere distributor.

TT: Soft-World has not only introduced games made in Taiwan to China; it has also brought Chinese games to Taiwan, such as Kingsoft Co's (金山軟件) Swordman Online (劍俠情緣) last week. How do you measure the response of local gamers to this title, and what differences are there in the products developed by the two countries?

Wang: Swordman Online is the hottest game in China. The theme of the game is traditional Chinese martial arts, which is similar to many of our releases, but I think it will still take some time to find out how local gamers respond to games that are made in China.

The move represents the first step in the relationship between the gaming industries of both sides, and not just purely out of business considerations. The major distinction between the games produced by the two sides is our superior creativity, although game developers from both sides do use traditional Chinese stories, legends, fairytales and saga novels for their source material. I believe that gamers will figure out the differences once they play both games.

TT: In recent years Soft-World aggressively moved to open up markets in Southeast Asian countries, such as Singapore and Malaysia. Not long ago you also announced that you were considering forming joint ventures with your Thai counterparts. What opportunities do these markets offer?

Wang: We established several sales outlets in Singapore and Malaysia going back seven or eight years ago. At the time, we only targeted overseas Chinese gamers there. But starting last year, we decided to carve out local Malaysian and Indian markets and sent our marketing and operations people there with English- and Malay-language versions of our games. In the future, we plan to use local cultural materials in our games to cater to the market.

Indonesia, Thailand and the Philippines are rapidly improving their Internet infrastructure, especially broadband, which will soon be advanced enough for the online gaming industry to emerge. Currently, game developers and providers in these regions are not numerous or professional enough to support the industry, so I think there is a good chance for us to gain a foothold there. Another plus with these markets is the absence of political tension, which reduces investment risk.

TT: Soft-World plans to list on the US NASDAQ stock market in the third quarter of the year. But with the US gaming market long dominated by video games, how are you going to exploit it?

Wang: Actually, the decision to apply for the listing is a move to increase our market presence in the international community. Several South Korean and Chinese gaming companies have done so, so we can't miss this boat, especially as our business is not inferior to that of our Chinese counterparts.

In this huge market, we plan to target overseas Chinese or migrants that have experience with and are fond of online PC games. As for non-Chinese gamers, we are still considering what games are appropriate to give to them. After all, most of our product lines contain cultural elements that may not be accepted by Western gamers. I don't worry about US gamers preferring video games. For now, many games are designed to be compatible in both video and PC formats. I do believe there will be more of these games in the future, which will wipe out divisions between the two groups of gamers.

TT: The problem for Taiwan's online gaming industry is the shortage of original titles. What proportion of your games are your own creations? And how will you deal with this problem?

Wang: In number terms, our original games account for more than half of our releases, but we gain most revenue from distributing South Korean products. I do understand that we must develop more games of our own to stand tall in this industry, so now we have a subsidiary, Chinesegamer International Corp (中華網龍), to do the R&D.

We have also established a research center in Kaohsiung and invited a team from Singapore to jointly develop hardware that will enhance our technology. This may take us one or two years. After that's developed, we will start producing a variety of games to distinguish ours from overseas titles.

TT: Soft-World is known for adapting Jin Yong's (金庸) saga novels as games, but local gamers have said that they want new subjects that will interest them. What do you say to this?

Wang: Our products are not only derived from Jin Yong. But I admit that we prefer Chinese cultural materials, because this is an area in which South Korea, Japan and the US cannot compete. So we will stick to this as our main theme for developing new games. We will also continue looking for other interesting materials to put in them.

TT: The government views the gaming sector as an important industry to be developed. What measures do you think would help game providers here?

Wang: I think the government has done enough because it allows gaming companies to be listed on the stock market, which helps us to raise capital from public investors and nourish our business. But the impetus for the industry, I believe, is an awareness of crisis. The once-prosperous film industry withered a long time ago, and the music industry is now controlled by overseas companies. So online gaming is the only opportunity we have left to take a lead in the international entertainment industry.