NCsoft Corporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

CASE OVERVIEW

NCSOFT, founded in March 1997, launched its first game with the name of Lineage in September 1998. Lineage, was Korea’s first role playing game. Although, NCsoft, began as a systems integration business, but soon it was transformed into a full game company. After the release of the first game, it gained a lot of success and was soon listed on the Korean Stock Exchange. Just after its creating in 1997, NCsoft was earning about KRW5.5 billion. It was only in 2007 that its revenues increased by 170 times and its people increase from just 17 to 16,000.

This case presents us with a contribution of NCsoft in the Korean Gaming market. NCsoft had faced many challenges and was yet to face. Since the year 2000, the PC game market has declined by over 30%. Also the mobile game market began to experience declining growth rates. Apart from this the video game market experienced negative growth in the year 2004, due to economic stagnation. Nevertheless, the Korean game market started to show high annual growth rate of around 50%. By 2006, NCsoft had earned its 43% of its revenue from its overseas market. The company had an advantage of a first mover in the initial years of its operations in the gaming industry. However, this was no longer its first mover advantage. With the advent of new technologies, development of various profit models, diversification of accounting methods and building an online platform for online games, the company is now forced to reinvent new ways to reach the market.

CASE QUESTIONS

NCSOFT has a great growth potential both inside and outside of Korea. The president of the company is facing a number of issues. As the founder of the company, he wants to maintain a strong position in the Korean market. He wants to find out how to diversify into the global market in the area of, for example, casual games. He wants to deal with the negative perceptions that have been developed in the minds of many people regarding the side effects of playing online games. Also the company wants to formulate strategies to counter attack the competition that is coming from competitors developing digital-content online games.

1. MAINTAING ITS TOP POSITION

NCsoft has achieved success in the gaming industry and maintained its number 1 position in the Korean market for a long period. It has released a variety of gaming services such as, Lineage 1 and 2, massively multiplayer online role-playing games, blade and sword and also other casual games. The company has developed globally and has grown in diversity within its customer base. The company had so far maintained its top position in the Korean gaming industry. However, it was still needed to raise the quality of its gaming services to meet the changing expectations of its people and also mitigate the competition coming from the global market.

One of the ways for the company to maintain its top position was to occupy the niches in the game industry. For this, the organization needs to focus on its core capabilities and capitalize on them. So far the company had achieved success in the area of digital content company. The company needed to grow its business through the integration of wired and wireless networks to become a global online development and publishing company. Since its inception, NCsoft was differentiated in the perception of its games. They focused on, to make the lives of the customers more joyful and make them a part of their entertainment culture. The company needs to introduce new games into the market to further increase its market share. It is known that online games were going to create a nearly infinite potential because they were internet based. The company needs to further expand in this area by targeting niche markets. NCsoft also had the dream of becoming the worlds’ best digital content company and had three major mottos, “Fun, Creativity and Quality.”

The company needs to expand but it also needs to formulate such strategies and positioning plans that prevent cannibalization of the company’s other successful products. It has been seen that a new market within the gaming industry has been emerging. This was the development of game portals for the people of 30 or above and also some other casual games which were very popular with the people from all the ages, including the elders and the children. NCsoft can also target this area to maintain its brand image and top position not only in Korea but in the global market too.

2. MITIGATING THE WORLD COMPETITION

NCsoft was now giving considerable attention to the emerging competition that was going to increase in the distant future. It was known that the future competition in the gaming industry, especially in the online games..................

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The case is disputed issues and questions facing NCsoft Corporation (NCsoft) in 2007. As the leader in online games, NCsoft has the greatest future growth potential in and outside of Korea. The president has a number of questions to consider: What is the most effective plan to NCsoft for maintaining its leading position in Korea and its competitiveness in the global market? As the company has to diversify its offer to play on a few big games of other genres of online games, such as casual games? What are the important factors to consider for NCsoft achieve "glocalization" as the basis for building a global online game development and publishing company? What should be the response to a variety of NCsoft channels and video game systems and the growth of ubiquitous computing environment? As the negative perception and side effects of playing online games resolved? In addition, how to prepare for NCsoft, to compete with other industries that have become competitors with digital content online games? "Hide
by Ho-Keun Lee, Sang-Hoon Lee, Hyung-Jin Kim Source: Richard Ivey School of Business Foundation 27 pages. Publication Date: March 26, 2008. Prod. #: 907M61-PDF-ENG