Expanding into Western markets will be critical to that strategy, and that’s why Mahoney has cut deals with high-profile Western game makers such as John Schappert, former No. 2 exec at Zynga and Brian Reynolds, a strategy gaming expert and maker of Rise of Nations.
Mahoney is proud that Nexon pioneered the free-to-play market, where users play for free and buy virtual goods for real money. But he hates copycats and wants the whole industry to be more creative.
We caught up with him at the Game Developers Conference in San Francisco last week. Here’s an edited transcript of our interview.
GamesBeat: What’s your latest take on the industry and how everything’s going?
Owen Mahoney: I was shocked to find out a third of all games being approved on the App Store were Flappy Bird clones? I thought that boded ill for the industry. But then there are some encouraging signs as well.
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We put out a game in Korea on Android called Legion of Heroes, from our Ndoors studio. You can see it on YouTube — there’s not an English version out yet, although it’s doing a very good job for us in Korea – and if you look at it, what you’ll notice is that it makes no real concessions to what everyone thinks needs to happen on mobile or on tablet, that idea of a dumbed-down interface. It’s a real gamer’s role-playing game. Comparing it to another one of our RPGs, Atlantica Online, what we’re finding is that there’s a very large audience of people who are core gamers, who like an immersive experience and want to take it with them on mobile.
Our central thesis has been, and we’re doubling down on this in 2014, is that there’s really no fundamental difference between your mobile device and your PC. A PC is essentially a mobile device and a mobile device is a PC. There’s a convergence happening now. You can deliver an immersive game experience on a mobile device and there will be a huge audience for it. Legion of Heroes is a 500-megabyte download, a big one by mobile standards but not a big one on PC. I’ve been playing a lot of the English beta, and as a core gamer, I like it a lot.
We’re not seeing this very much in the industry, but what we are seeing is very satisfying. That’s very much in line with our central thesis, that immersive, synchronous, free-to-play games are where the future is. That’s where we’re putting all of our efforts.
GamesBeat: What I’ve heard some people here say is that shorter sessions seem to define the mobile experience. It’s hard to carry something from the PC and continue it on a mobile device.
Mahoney: There’s a good debate on that. I wouldn’t say that shorter sessions don’t matter on mobile, but I know that the way I like to play, a lot of times I don’t have my PC logged into a game. I’m very happy to play a long session on my mobile device, because you can deliver an immersive experience on a mobile device, on a tablet or even on a smaller-format phone. There’s nothing inherent that says people can’t enjoy a longer session on a mobile phone.
You could make a good argument that the reason why people enjoy shorter sessions, why the majority of what you see on mobile devices is shorter sessions, is because the supply has created that demand. People are playing shorter sessions on mobile phones because that’s their only choice. I’m still personally looking for a good mobile RTS. I haven’t found it yet. I’m looking for a good mobile RPG. I can connect over wi-fi and have all the low latency that I have on a PC. Then you, the game-maker, can give me an RPG that I really like.
Yet we as an industry haven’t delivered that for gamers yet. A third of what we’ve done in the last few months is Flappy Bird clones. We’re letting consumers down. I know that, because as a consumer, I really want to play a different kind of game than just a casual, short-format game. I want to play a more immersive experience.
GamesBeat: What I took from your investment in the western developers was that it was a move to go global, and also that you wanted to expand beyond Asian-themed content. Asian-themed content seems to be a very good business, though. Is there a larger opportunity in adding things that you don’t have, content-wise?
Mahoney: The Asian opportunity has been great. We had a great year in 2013. In particular, in Korea we had an especially good year. Our business grew substantially. But we still think that the opportunity in the west is significant. A lot more immersive free-to-play online games come out in places like Korea every year, compared to North America and Europe. We think we have a good opportunity in those territories. We just haven’t delivered on it yet.
A few people in the west agree with us. Some of those companies are the ones we invested in during 2013. We’d like to do more in 2014.
GamesBeat: There seems to be some difference between the valuations of western game companies and Asian game companies. What do you think explains why that is?
Mahoney: I’d say that, in general, there’s an interesting valuation difference between public and private. There’s a reasonably high valuation for private companies and a reasonably lower valuation for public ones. We’ll see what happens with the King.com IPO.
My personal view is, that’s what makes a market. From an IR perspective, sometimes I don’t like the valuation differences, but from a corporate dev perspective, I do. Sometimes it’s the opposite. Right now I wish there were more reasonably-priced private companies. But you always want more of something that you think is good. There are several very good private game companies.
Public investors, I think, have been burnt, or they feel they’ve been burnt by other companies in our industry. They’re pretty skeptical, as a rule. But things like platforms end up going in and out of fashion for investors. Content goes in and out of fashion. It depends on the year. You and I have both been around long enough to see a few waves of this – by platform, by region, by private versus public. My sense is, we’ll see more of that.