Nexon’s office in Seongnam, Gyeonggi Province (Yonhap)
The prolonged pandemic has intensified a polarization between top South Korean game companies and small and mid-sized ones.
While the smaller players took a hit in revenue and employment amid the COVID-19 outbreak, the big three -- Nexon, NCSoft and Netmarble -- have reaped strong earnings and are returning part of them to staff and shareholders with dramatic hikes in salary and dividends.
On Feb. 1, Nexon, which breached a 3 trillion-won ($2.72 billion) mark in revenue for the first time this year, announced a uniform pay raise of 8 million won to everyone on its payroll.
The hike also applied to the company’s starting salaries. An entry-level developer will now get 50 million won a year, up from the previous 42 million won, while wages will start at 45 million won, up from 38 million won, for those joining other departments outside game development.
The firm has sharply increased its dividend payouts, too. According to a regulatory filing in Japan, the firm gave out a total of 61.4 billion yen ($580 million) in cash dividends to its Japan-based holding company NXC last year, in mid-year and year-end payouts. The amount is an increase of 31.7 percent from the previous year and is the largest ever in its history.
Netmarble followed suit, by granting a uniform wage hike of 8 million won on Feb. 10. The firm, which increased its revenue by 14 percent to 2.48 trillion won last year, raised the starting salary of new developers to 50 million won and that of non-developing staff to 45 million won. It will also hand out welfare points worth 100,000 won every month.
Not to be outdone, NCSoft, whose revenue and operating profit spiked 42 percent and 72 percent to 2.41 trillion won and 824.8 billion won, respectively, is also mulling a pay raise in March or April.
Compared to the double-digit growths witnessed by major game companies, damages were significant among smaller game firms.
According to the 2020 White Paper on Korean Games released by the Korea Creative Content Agency, the smaller the size of game companies, the more financial damages they suffered.
Among 113 gaming firms with less than five workers, 52.9 percent of them saw their revenues shrink. Of 95 companies with between five to nine workers, 44.1 percent had their revenues drop. For the 45 companies with more than 100 workers, only 28.4 percent saw their revenues drop.
Another survey showed similar findings. The coronavirus outbreak aggravated working conditions of almost every game company with less than 300 workers, according to the KOCCA’s 2020 Survey on Working Conditions of Game Industry Workers in Korea.
“Except for those with more than 300 workers, the smaller game companies are, the smaller wage and pay increase workers received. The ratio of telecommuting among those with less than five workers increased significantly, but those workers’ wage and pay, work intensity, working hours, job stability and job search and career development opportunities deteriorated considerably,” a KOCCA official said.
By Kim Byung-wook (email@example.com