[Game-Timespecialarticlenoreproductionwithoutauthorization!】
Game-Time report/Since last year, the downturn in the global gaming industry has begun to show itself. The continued wave of layoffs and sluggish expectations have made peers worried about this year’s market growth. However, judging from the impact on game companies, Korean manufacturers seem to be the most affected.
Gamelook just wrote a few days ago about the news that the CEOs of many Korean game companies have become “scapegoats” for their performance. Judging from the 2023 financial reports, Korean game companies are showing a polarization trend. Although companies such as Nexon and Krafton have continued to grow with their new games and powerful IPs, more companies like NCsoft have experienced sharp declines in sales and profits, or even fallen into losses (Netmarble, Kakao Games).
Image source: Pixabay
To make matters worse, some game companies have even begun to have labor-management conflicts, with unions putting forward higher demands, making their situation even more difficult.
According to news from the game industry on April 15, NCSoft recently held formal negotiations with the union on wage issues. In the first negotiation at the end of last month, the union demanded that the average annual salary of management be increased by 6 million won (approximately RMB 32,000) in basic salary and the minimum wage be increased by 3 million won (approximately RMB 16,000).
In response, the employer proposed to the labor union to increase basic wages by an average of 3% (an average of just over 2 million won), and stated that it could not accept the minimum increase of 3 million won. The employer proposed the basis for annual salary calculation: 1) The overall gaming industry is in a downturn; 2) Worry about recent poor operating performance and the long-term downturn; 3) Higher salary levels compared with competitors, etc.
The union stated that it was unable to accept the employer’s proposal, but considering the recent industry conditions, NCsoft’s operating performance and NCsoft’s tightening tone, the company is not expected to make further compromises. The company’s new CEO also emphasized his commitment to management efficiency. Require.
According to forecasts from financial information company FnGuide, NCsoft’s operating profit in the first quarter was 15.4 billion won. In other words, it decreased by 81.1% compared with the same period last year (81.6 billion won). In this case, there are also concerns that if the company accepts the union’s demands, the company’s operating burden may increase.
Another Korean company, Webzen, also suffered from labor conflicts. Currently, the Webzen union will march every day at noon and hold intensive protests every Tuesday for a month. The Wanzen union notified its management of the breakdown in collective wage negotiations, mainly because the two sides did not agree on a plan to increase benefits.
According to foreign media reports, the Netzen Trade Union submitted a proposal for a reply agreement, which includes a total of 24 plans including exemption from working hours, prior agreement on company split and merger, family care leave, workplace harassment investigation, and support for education expenses for myself and my children. changes or new establishments. Taking wages as an example, the union proposed a plan to increase basic wages by an average of 5.6 million won.
Judging from the current situation, Webzen’s labor conflict will not be easily resolved in the short term. In October last year, the company sued the chief vice president of the branch for forging private documents, and the branch president also sued the CEO of Webzen, which further deepened the conflict between the two parties.
However, since such conflicts are likely to have a negative impact on the development of game companies, more and more people in the industry are worried. Most importantly, judging from Webzen’s performance last year, analysts generally believe that labor conflicts are incomprehensible.
Netzen’s sales revenue last year was 196.2 billion won, a year-on-year decrease of 18.9%, and its operating profit was 49.9 billion won, a year-on-year decrease of 39.8%. It is expected that the company will face the same continued difficulties in the first quarter as last year.
An industry insider said, “Sales in the game industry dropped by 3 trillion won last year, and the entire game industry is shrinking. If business conditions are good, labor negotiations may go more smoothly, but due to the difficult situation, labor negotiations on annual salary and other matters may be difficult. Extension. The occurrence of labor conflicts during a difficult period for the company may bring risks from an operational perspective, and as a result, employee benefits will be reduced.”
