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Broadband Future 5 July 05
"I feel like a star. My fans send me gifts, and I have a sponsor supporting my life."
Kim Hyun Wook, virtual Kart Rider driver, in Business Week
Kart Rider
Kart Rider is a Korean multiplayer internet game that involves racing a go-kart around a track. Since the game launched in S. Korea in the fall of 2004, more than 10 million users have registered. At any time, there may be as many as 200,000 people playing the game.
Kart Rider is a new kind of entry in the rapidly growing world of internet gaming. First, it’s a “casual game” as opposed to the more elaborate and involved “role player games” (rpgs) like Everquest or The Sims. Because it’s easy to get started, it’s much more accessible for occasional users, and usage rates have grown much more rapidly than for rpgs.
Second, Kart Rider charges no fee to play. Most multi-player rpgs charge a monthly membership fee. Nexon, the company that developed Kart Rider, lets users play the basic game for free, but sells a variety of accessories that enable players to look better or play better. So, for example, a player might want a special paint job for his digital car, which costs an extra dollar. Or he might buy special goggles so he can see through smoke, which costs $2.50. This approach helps explain both the large number of registered users and the incredible growth in revenues for Nexon -- there’s no cost to get started but it costs money to look good and be distinctive in their virtual world.
Korean cable television has run two Kart Rider TV specials. These resemble NASCAR races without the fumes and crowds. Professional drivers (like Kim Hyun Wook, quoted above), sponsored by companies that advertise on their virtual cars, race around a virtual track watched by a real television audience.
Nexon has been a premier online game developer in Korea for over 10 years. Kart Rider has been a spectacular success -- Nexon forecasts that its revenues will more than double in 2005, to $250 million, from $100 million in 2004.
Nexon Revenues (src Business Week)
All of this is made possible by the very high penetration of broadband in Korea. About 75 percent of all homes have broadband internet access, at speeds much faster than those in the US. It’s a new mass market, one where it makes economic sense for real companies to sponsor virtual racing cars.
Broadband Present
While Nexon is expanding its reach throughout Asia, it’s not currently planning on bringing Kart Rider to the US. One reason may be the poor quality of broadband in the US. A recent article in Foreign Affairs noted that Asia has moved ahead of the US in providing access to high quality internet connections. For example, Japanese broadband internet service is about half the price and 16 times the speed of the average service in the US.
Better broadband creates economic opportunity. Charles Ferguson, a researcher at the Brookings Institution, wrote “The Broadband Problem” in 2004. He believes that the US could lose as much as $1 trillion because of constraints on broadband development. It’s not just games like Kart Rider; countries like Japan and Korea have used their broadband infrastructure to excel in areas like teleconferencing, remote medical services and distance education.
As a result of the US broadband lag, the Kart Rider phenomenon has yet to come to the United States. When it does, it will be part of a much-anticipated shift in internet usage – to a mass market that looks to the web for entertainment as well as information. And a few drivers of virtual cars will find themselves getting famous (and making a living) by playing an internet game.
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