LD Studio (2)
When I said that, Sunwoo asked, sounding completely dumbfounded:
"Yeah. You don't seriously think you're just going to let this slide, do you?"
"Then you take revenge."
"Come on, don't talk like that. You have to stand your ground all the way to the end."
"No, you need to get revenge."
"Well, that's because..."
I thought of the Sunwoo I had known in my first life.
Right now he had been cut loose after getting on the executive director's bad side, but in the original timeline he had been forced out after enduring every kind of harassment and humiliation the company could throw at him, then watching it get swallowed up in a merger and acquisition as if he had been swept out with the trash. I knew better than anyone how miserable he'd been back then, because I had watched it happen from right beside him.
I had been planning to put him through the wringer eventually anyway, so this was perfect timing.
"Anyway, we're taking revenge. Okay?"
"It doesn't matter whether you think you're fine. I don't think you're fine."
I raised my voice for no reason at all. "Hey! If your friend got unfairly fired, you'd be fine with that? Huh?"
Sunwoo looked even more flustered.
"...."
Probably from this very moment.
I cut him off cleanly. "Just sit there and watch. I'll get my revenge for you."
"Your opinion doesn't matter at all."
"What matters is that I want to take revenge for my friend."
I went straight to Continue Capital and called a meeting. The key people, including David, gathered together, and Dong-ho senior and Kim Beom-seok were there as well.
"We've got something to do."
At my words, everyone put on a tense expression.
"What is it?"
"There's a game company in Korea called LD Studio. Have any of you heard of it?"
David gave a slight nod. "I understand it's the biggest game company in Korea."
The others all looked as though they'd at least heard the name in passing.
"Before I explain my plan, I need to give you a bit of background on LD Studio. Conveniently enough, we have a famous analyst here who did a deep-dive analysis of the Korean game industry."
I pointed at one person, and everyone turned to look that way.
Dong-ho senior, suddenly under the full weight of the room's attention, looked startled.
"Me?"
"Yes. You were in charge of the game industry at DA Securities, and you wrote plenty of reports on LD Studio."
"Well, yes, but..."
Dong-ho senior looked at me with the pleading eyes of a man asking, Why are you doing this to me? I ignored him and said, "Come on, get up and explain it in a way everyone can understand."
He had no choice but to rise to his feet.
"Ahem. Korean game companies, and LD Studio in particular, have a very clear distinction from foreign game companies. You can sum it up in just three words."
Edward Benson asked, "What are they?"
Everyone else wore the same curious expression.
Dong-ho senior held up one finger after another. "Mobile, monetization, and Random Box."
Games occupied a huge share of the cultural industry and were among the fastest-growing sectors anywhere in the world. In the era of the Fourth Industrial Revolution, they were one of the core forms of content.
It was no exaggeration to say that the game industry was in the middle of a period of upheaval.
From the United States to China, Japan, and Europe, game companies around the world were locked in a fierce struggle to seize the future's crown.
And Korea was no exception.
People liked to dismiss the country with jokes about the "four major addictions" and the like, but in terms of scale and revenue, the Korean game industry was in no way inferior to its foreign counterparts.
Last year it ranked fourth, behind the United States, China, and Japan, and its exports reached a staggering eight billion dollars, the highest of any content industry by far.
The companies leading the charge were the 3L—LD Studio, Nexon, and Netmarble.
Among them, the undisputed number one was LD Studio.
LD Studio's market cap stood at a breathtaking 30 trillion won, a size that put it among the world leaders even when compared with the biggest global game companies.
Both revenue and net profit were rising in tandem.
Dong-ho senior stepped forward and began explaining as he wrote on the whiteboard.
"LD Studio's main strength used to be PC online games, the kind generally called MMORPGs. But later it successfully ported those online games to mobile, and now more than 80 percent of its revenue comes from mobile. The game that accounts for most of that revenue is Brotherhood M."
At first he had seemed nervous, but since this had been his specialty, the words soon started pouring out of him naturally.
"Brotherhood M is a P2W, or Pay to Win, game. The more money you spend, the stronger your character gets and the more fun the game becomes. In practice, monetization is basically essential. You have to spend money not just to keep leveling your character, but even to maintain your current position. And if you want to get stronger than everyone else, you need to pour in an absurd amount of cash. Among the top-ranked players, plenty of people have spent tens of millions of dollars."
At that, everyone struggled to hide their astonishment.
"You mean people spend that much money just to play a game?"
The people gathered here were the elite of the financial world.
They'd all been too busy studying and working to pour real money into a mobile game just to level up a character, so how could they possibly understand the mindset of the people who did?
"The reason is that the game's main content is not PvE, but PvP."
PvE meant Player versus Environment, while PvP meant Player versus Player.
If PvE was a game you enjoyed on your own, PvP was competition against other people.
Nobody would spend that kind of money just to kill monsters or NPCs. But if it meant crushing other players and climbing over them, people would spend as much as it took.
Brotherhood M exploited that competitive instinct so perfectly that it came to be called the final boss of PvP games.
Thanks to that, it consistently ranked among the ten highest-grossing games in the world every single year.
The strange part was that, compared with the other games in that top ten, its user base was overwhelmingly small.
What did that mean?
It meant the revenue per user, the average ticket size, was sky-high. In other words, the company was wringing out as much money as possible from each player.
The game itself was free, but without spending money, you couldn't really play it. Whether you had little or a lot, you still had to pay.
It was so extreme that people started calling it "income-linked monetization" or "income-proportional monetization."
If even the CFO openly admitted, "We study how to make our customers feel good about spending as much as possible," then that told you everything you needed to know.
So how did other Korean game companies react when they saw what LD Studio was doing?
Did they criticize it for making money through garbage methods?
Not at all.
As if they'd received some profound revelation, they all scrambled to copy LD Studio's BM, or business model.
You didn't need jaw-dropping graphics. You didn't need an incredible story. All you had to do was borrow the monetization hooks and release something that felt similar. And before long, Korean mobile games were being plastered with every kind of monetization gimmick imaginable.
David tilted his head. "I'm not sure I follow. If a game gets stronger the more money you spend, then the players with less money couldn't possibly win no matter what they do. Doesn't that make it unworkable from the start?"
He really did sound like someone who'd never played games before.
Dong-ho senior nodded. "Exactly. That's why P2W games are tied to another feature as well. The Random Box."
Random Box.
Depending on the country, it was called a loot box, lucky box, gacha, or draw, but the idea was the same: you bought a box, opened it, and received a random item.
If the item you wanted was inside, you won. If not, you lost.
"If you sold a powerful item outright for ten thousand dollars, only people with that kind of money could buy it, and everyone else would simply give up. But if you sold a box with a one percent chance of dropping that item for one hundred dollars, then even people who only had one hundred dollars could still buy it."
Morris Pearson said, "But ninety-nine out of a hundred people would get nothing. Why would they buy that?"
I snorted. "Lottery tickets produce losers by the tens of millions, and people still buy them every week, don't they?"
He gave a dry laugh. "Put that way, I can't really argue. But that's gambling, isn't it?"
"This is worse than gambling."
"...."
The predatory nature of Random Boxes had long since surpassed ordinary gambling.
As a rule, gambling industries were tightly regulated by the state: horse racing, cycle racing, casinos, pachinko, the lottery, sports betting, and so on.
But for some reason, the Random Boxes sold inside games had slipped free of that oversight.
The reason was that what you got from the box wasn't cash but an item. From the perspective of a player, though, an item was practically the same thing as money. In some cases, people even sold them for real cash.
And here's the funny part: until two years ago, the odds for Random Boxes hadn't even been disclosed, on the grounds that they were a trade secret.
That meant you had to buy the box without knowing whether the item you were chasing had a one-in-a-hundred chance, a one-in-a-thousand chance, or a one-in-a-trillion chance of appearing.
By any sane standard, it was absurd.
When public sentiment turned sharply negative and politicians began hinting that they might step in, game companies had no choice but to disclose the odds.
Even then, they buried the information deep inside their websites where it was almost impossible to find.
"Players keep spending endlessly until they pull the character, skill, or item they want, and all of that feeds directly into the game's revenue. Thanks to that BM, Brotherhood M posted twenty-three billion dollars in sales last year, and this year it's expected to surpass twenty-five billion."
David said, "Hearing it laid out like that, the way they make money is pretty vicious. But even if you can criticize it, that doesn't make it wrong in itself, does it?"
However a game company chose to make money was ultimately its own business.
Of course, criticism was the users' business too, and LD Studio had taken a tremendous amount of heat for it.
By the standard of all the hate it got, LD Studio should have collapsed long ago. And yet every quarter it was still setting record revenue.
Despite all the scandals, the loyalty of the so-called Brotherhood uncles remained rock solid. Then again, if I'd already dumped tens or even hundreds of millions of won into the game, I probably would have been just as loyal myself.
But there was one fatal flaw hidden inside all of that.
It was this:
"What if the game company is manipulating the odds?"
"Excuse me?"
"You're serious?"
Everyone reacted to my words with disbelief. It was that far outside the bounds of common sense.
Even if it was gambling, people could live with it as long as the odds were fair.
But what if the dealer was swapping cards behind your back? What if the roulette wheel had been rigged so that the ball would never land on the number where you had placed your chips?
"What do you think, senior?"
At my question, Dong-ho senior looked troubled.
"Well... there have been suspicions for a long time, not just about Brotherhood but about Random Box games in general. But nothing has ever been proven."
You could find plenty of posts on game communities talking about how the odds seemed weird. But at the end of the day, those were only suspicions.
When you rolled a die, the numbers from one to six were supposed to come up evenly, but they didn't always. Even if I kept getting nothing but duds, somebody else was still hitting the jackpot.
"What incentive would a game company even have to rig the odds?"
"To maximize revenue. Even in a game like Brotherhood M, there are fewer than a thousand users who spend more than one hundred thousand dollars a month. And their spending tends to spike when new items or skills are released."
Something that might fail to appear because of probability can also appear because of probability.
If a heavy spender pulled exactly what they wanted right away, then until the next product came out, there'd be no reason to spend money again.
From the company's point of view, that was nothing less than a loss in revenue.
"By slightly tweaking the odds for specific users or at specific times, a game company can pull in an enormous amount of extra money."