I came across the following article in BusinessWeek while on my flight back to San Francisco (got in Sunday afternoon from Seoul). It was interesting timing since I met with my close friend, Jimmy, who I did a couple startups with and he was talking about his former company Nexon.
He was the unofficial and official CFO of Nexon for the past few years as a favor to his friend, Jay Kim (Founder & CEO of Nexon). Jimmy recently left this position at Nexon and as COO of HeyAnita Korea (yeah, i can state it now:) to head Innotive, the company I helped out during my last nine months in Seoul and which I posted about before (try the Technorati search on the sidebar... i'll get back to this).
Anyway, one of the topics we talked about was Nexon. They were actually a client of my when I was at iRG, a boutique investment bank, and during that time about four years ago I thought they didn't have the in-house creative talent to continue leading in the Korean online gaming market (#2 hardcore gaming company and budding casual gaming business at the time). But each year since they have proven me wrong. Jimmy says Jay and others have simply hired well as well as acquired some talent on the cheap.
Their recent hit is Kart Rider, which is discussed below, and it is generating about US$10 million/month and will help Nexon hit an estimated $250 million in revenues this year. Incredible numbers off one casual online game. Also amazing is that it has become a such marketing powerhouse to teens and twenty-somethings in Korea. Through Kart Rider, Coca Cola has almost tripled its sales in South Korea (actually, it was Jimmy who referred the idea and deal to Yong Jae Min, his "younger brother" and chief marketing officer of Nexon, along with a couple other huge deals).
Dude, Where's My Digital Car?
Tech outfit Nexon provides virtual doodads for Korean players of a hot online game, and sales are burning rubber
June 23, 2005
After graduating from college this spring, Kim Hyun Wook of Seoul had been expecting to launch into a career as an engineer. Instead, he has joined the ranks of professional race car drivers -- though he never has to leave home to hit the track.
Every morning, Kim logs on to his computer using the screen name of Sarang (Korean for "love") and races against rivals in an online game called Kart Rider for at least eight hours. For his cyber-driving, he gets paid real money by a local clothing company, which in turn emblazons its brand name on the virtual driver of a virtual car. "I feel like a star," says Kim, 21. "My fans send me gifts, and I have a sponsor supporting my life."
Sound wacky? Not to the millions of Koreans who play Kart Rider and other games like it. And certainly not to Nexon Corp., the game's creator. Nexon has built a booming business selling avatars -- digital representations of players online -- and virtual accessories such as cars and goggles. The company chalked up revenues of $110 million last year, some 85% of it from selling such digital doodads. This year, Nexon expects sales of $250 million. "The avatar market is prospering in Korea," declares Min Yong Jae, chief marketing officer. (full article)
Anyway, Jimmy passed on an offer to head Nexon's subsidiary company to try to take Innotive to the next level. My friend and former CTO of HeyAnita and ViewPlus, Peter, is also taking a risk since he recently passed on the number two spot at Macromedia Korea to join Innotive. Also J.J., the former chief strategy officer at Nexon, passed on becoming part of the executive team at CyWorld, which is coming to the U.S., to round out this kick ass team.
I don't know J.J., but I gave Jimmy and Peter crap when we met up in Seoul. For months, I would ask for their help on Innotive especially to prepare for my departure back to the U.S., but they didn't finally help out until months afterwards. And when they finally checked under the hood of Innotive they decided to take over the company on a full-time basis which the CEO agreed to since he was looking to move to a chairman role during the time I was leaving.
After my months of toil and hardship by myself, these guys come in like The Blue Angels... leaving the soil and earth untouched. Since Jimmy, Peter, and I have gone through two startups together, we said that a few years down the road we would do another, but after this experience with Innotive I'll have to reconsider since their slow response time makes me wonder if they have changed and whether they can truly hack it in the fast-paced entrepreneurial environment:)
Anyway, they just signed a deal with Infiniti to create interactive kiosks for their showrooms. Check out Innotive's new website too.