Early Days

Asia’s lack of online rules isn’t necessarily a good thing for investors

From an investors’ perspective, one of the key challenges in expanding the subscription and role playing game model is the lack of a regulatory framework in most Asian markets. This creates uncertainty, because without clear online gaming regulation what’s legal today could suddenly become illegal tomorrow.

In countries that do have clear rules, such as Korea, it allows investors and operators to plan ahead.

Korea opportunities

Korea, where CryptoLogic last year launched an online poker room, was chosen as an important target market because of its combination of high broadband penetration, clear regulation and opportunities to operate a new revenue model.

“Korea’s rules are very specific,” says Ken Crouse.

“You are allowed to have an online poker tournament, but you are not allowed to have a winner. You are though allowed a final table payout to the top three players. You can give them a prize such as a trip to Las Vegas, but you can’t announce in advance what the prize will be. The reality is that once you’ve given out prizes of a trip to Vegas the first time, players know what to expect.”

Other content providers have also noticed Korea’s structural strengths, such as its high level of 3G mobile telephone ownership.

International attention

In December, New York-listed Electronic Arts Inc., the developer and licence holder for popular game franchises such as Fifa Soccer and NBA Street, announced the acquisition of J2MSoft Inc. a Korean developer of PC online games.

J2M develops free-to-play online games with a revenue model based on micro-transactions for products such as on-screen avatars for players and advertising. Online games created and wholly owned by J2M include RayCity, TAAN, and Debut.

“This is a significant step in EA’s strategic plan for developing and publishing online games in Asia,” said Jon Niermann, President, EA Asia in a prepared statement.

“J2M is an experienced team of developers and we can’t wait to have them start creating online games based on new properties and powerful EA franchises,” he added.