Case study: Grigon Entertainment’s success and failure

The Korean online gaming industry has seen rapid growth since the boom of information technology (IT) related industries, especially Internet and PC‐bang or local area network (LAN) use, throughout the country. Online games are real‐time games in which two or more players meet, compete, and cooperate in the same game space using the same communication network. Even though the growth rates of IT‐related industries have recently slowed, the growth of the online gaming industry has increased, and Korean firms are expanding their businesses to countries all over the world. However, the online gaming industry is becoming an oligopoly, in which 4‐5 leading companies occupy most online gaming markets. This situation presents a disadvantage to the Korean online gaming industry, since online players usually seek a diversity of online gaming contents and high quality online game services. Therefore, small‐ and medium‐sized game developers must survive in this market by upgrading the quality of their online gaming services in an effort to provide differentiated goods and services in monopolistic competition markets. However, most venture companies in the online game industry, whether new or previously existing, are not able to obtain adequate financing. The objective of this paper is to examine the management environment for medium‐ and small‐sized game developers in the Korean online gaming industry. By introducing the case of Grigon Entertainment, we try to identify the source of difficulty obtaining external financing for Korean venture firms in the online gaming industry.