It Takes Two to Tango
It Takes Two to Tango
  • Reporter Song Sung-chan
  • 승인 2019.03.29 15:45
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Reporter Song Sung-chan
Reporter Song Sung-chan

Last winter, I became interested in Nintendo Switch, a gaming console that is both playable at home and on the go. But, after research, I learned about the many discriminations against Korean customers, and wanted to share my findings and thoughts regarding this issue.
On Jan. 18, 2007, Nintendo launched its Nintendo DS Lite (NDSL) in Korea. Because NDSL was released before the iPhone, NDSL was on the up and up, and by Jan. 9. 2008, a million NDSL’s were sold in Korea only. In 2008, Wii launched, and by 2010, 3 million NDSL’s and a million Wii were sold. According to the Financial Supervisory Service (FSS), Nintendo had total sales of 204 billion KRW and a net profit of 25 billion KRW in 2008; 265 billion KRW and 18 billion KRW in 2009; 294 billion KRW and 24 billion KRW in 2010. The sales and profit undeniably show Nintendo’s huge success. However, in 2011, its total sales were 204 billion KRW and the net profit was 7.4 billion KRW; although the total sales were the same as that of 2008, the net profit dropped by 17.6 billion KRW. The cause was the illegal replication of Nintendo games. Most gaming companies—such as Nintendo, Sony, and Microsoft—profit from not their consoles, but from the games. The result of the piracy is well illustrated in the profit and loss statement: 122 billion KRW total sales and 2.9 billion KRW net profit in 2012; 72 billion KRW total sales and 25 billion KRW net loss in 2013; 52 billion KRW total sales and 11 billion KRW net loss in 2014; 45 billion KRW total sales and 3.6 billion KRW net loss in 2015; 39 billion KRW total sales and 0.3 billion KRW net profit in 2016.
As the statistics shows, the illegal gaming chips, R4, destroyed Nintendo’s market in Korea. Nintendo once tried to restrain piracy when it sued a R4 distribution company. Although the owner was sentenced to eight months, the lawsuit did nothing to put checks on R4 because the laws only applied to the distribution companies not the users.
However, piracy was not the only cause of the fall of Nintendo. With the advent of smartphones, Nintendo could not win over Apple and Samsung. Also, Nintendo utilized country code, which only allows games to be played when the console is of the same country. Moreover, because Nintendo only released games with mass appeal in Korea, Korean gamers could not fully enjoy Nintendo games.
As the vicious cycle continued, the present situation broke out. If current problems were to be solved, both Korean customers and Nintendo must admit their faults. Piracy happened in the beginning because that generation was not exposed to the gaming market and spending money on games was not a natural spending behavior. However, Koreans must realize that piracy can never be justified in any way. As for Nintendo, its customer segment gave it a huge success with the consoles, but because its method was through the sales of only the games with ass-appeal, it failed to appeal to game-lovers who appreciate games and pay fair prices. Also, Nintendo did not, and still has not, strengthened its security, refusing to protect itself from piracy.
I believe Nintendo will not suffer a loss from giving Korea a second chance. Sony proved it. In the past, Sony suffered from piracy too and the loss statement had a similar pattern with a 13 billion net loss in 2007. However, Sony did not renounce Korea’s potential; in 2014, Sony had 4.3 billion KRW net profit with its PS4; 4.1 billion KRW in 2015; 6.4 billion KRW in 2016; 11.7 billion KRW in 2017; and 10 billion KRW in 2018.
It takes two to tango. If Koreans and Nintendo admit their mistakes and trust each other, both will benefit.