Game On for South Korean Free-to-Play Business Model

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With 90 percent of the country on broadband, South Korea is a haven for tech savvy, digitally wired gamers.

The South Korean government is bringing a taste of that to Wilshire Boulevard. On July 9, the country’s ministry of culture and tourism will open a permanent exhibit showcasing the latest online games and digital mobile technology at the L.A. Korea Center.

Six online games by Korea’s leading publishers Webzen Inc., Nexon Group, NCsoft Corp., and NHN Corp. will be featured at kiosks, along with six computer games and three mobile content consoles. The games, including “Audition,” “Huxley,” “Gunbound” and “Lineage,” are free to the public and new games will be showcased annually.

Most of these games are free to play but require purchases to get to more advanced stages. Such a business model is relatively new to the U.S. online gaming market and John Chi, chief executive of Nexon America Inc., hopes the Korea Center exhibition would change that.

“The free-to-play backend-item-sales model has been a powerful business model in Asia. But it’s a relatively new thing in the states where online games are mostly PC-based and subscription-based,” Chi said. “We, as Korean game companies, are trying to introduce this business model to the states.”


Boost for Helio

Helio LLC, an upstart L.A. mobile carrier, will get a fresh injection of $100 million from one of its parent companies.

The mobile virtual network operator that targets digitally connected, young customers launched last year as a joint venture of Earthlink Inc. and SK Telecom, South Korea’s largest mobile phone carrier.

SK Telecom’s additional funds follow an initial investment of $220 million. Earthlink, which also put down $220 million last year, is considering matching SK Telecom’s new investment, said Dan Greenfield, Earthlink’s spokesman.


CFO Fired

International Rectifier Corp. fired Chief Financial Officer Michael McGee during an ongoing internal accounting investigation.

Linda Pahl was appointed last week as the interim chief financial officer. Pahl joined the company in 1999 as director of global finance and most recently served as its vice president of corporate finance.

The company also announced that Robert Grant, the company’s executive vice president of global sales and marketing resigned, and that Alexander Lidow, the company’s chief executive, would assume Grant’s role until a replacement is named.


CSC Pacts

Computer Sciences Corp. in the first quarter secured $3.1 billion in government contracts, which accounted for nearly all of its first quarter revenues.

Under the terms of the contracts, the El Segundo-based information services provider will supply technology for training, security software and communications consulting for the Department of Defense, Environmental Protection Agency and NASA.

About a third of the company’s annual revenue comes from government contracts.

Separately, Computer Sciences announced last week that it has completed the acquisition of Covansys, a cash transaction worth about $1.3 billion.

Taking over Covansys, a consulting and technology services company, adds 8,000 employees to Computer Services. This includes 6,000 employees in India, nearly doubling the size of the El Segundo company’s operation in the country to 14,000.

Both Covansys and Computer Sciences businesses in India have been ranked among the top 10 places to work for IT professionals in India, according to the company’s news release.


Microsoft Suit

Microsoft Corp. has filed a piracy suit against Wilshire Computer Services Inc. as one of 23 legal actions against merchants in California and Florida allegedly selling counterfeit software.

Representatives of the L.A.-based company were not available for comment.

The blanket of lawsuits is a part of Microsoft’s ongoing effort to eradicate piracy. The company has ramped up the number of suits to 125 last year, compared with 56 two years ago and 60 the previous year, said Mary Jo Schrade, senior attorney for Microsoft.

“The effort is directed at making sure that when you go to your local reseller, you can be sure you’re getting the right software,” Schrade said. “Honest companies in your neighborhood will go out of business if we don’t file these suits.”


Staff reporter Booyeon Lee can be reached at

[email protected]

or at (323) 549-5225, ext. 230.

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