Korea: An isolated nation suffering from an oppressive government and dictator, virtually cut off from the rest of the world (and the 21st century). Oh no no no. Sorry. That’s NORTH Korea. Although this picture may be shockingly correct, perhaps in not as many words, North Korean’s cousins to the South couldn’t get any closer to the opposite side of the spectrum.

South Korea is one of the most wired countries in the world, with 80 percent of the South Korean population owning a PC. Based on rough population estimates, that puts a computer in the hands of 38 million South Koreans. Given the relatively small land mass that South Korea covers, including extremely densely populated areas such as Seoul, as well as being (more or less) the birthplace of the free-to-play business model, it’s easy to see why and how gaming has integrated itself so rapidly in the everyday culture. Don’t forget, this is the country that has professional Starcraft leagues that often receive national television coverage.

According to Pearl Research, the South Korean appetite for video game consumption is showing no signs of slowing, as they estimate the online games market in South Korea grew an impressive 20 percent in 2008. The data comes via Pearl’s new study, “Online Games Market in Korea.”

The top five game operators in South Korea in 2008 were:

• NHN – a 51 percent revenue increase YOY
• Nexon
• NCSoft – a 5 percent YOY revenues gain
• Neowiz – up 29 percent with revenue gains YOY
• CJ Internet – a 21 percent YOY gain in revenues

The Top online games in the South Korean market include:

• Activision/Blizzard – World of Warcraft
• NCSoft – Aion and Lineage series
• CJ Internet – Sudden Attack (free-to-play)
• EA – FIFA Online 2 (free-to-play)
• Nexon – Dungeon Fighter (free-to-play)

Naturally, the vast majority of games available to South Koreans come in the free-to-play format, and according to the Pearl Research study, the global economic downturn has had little to no effect on microtransactions purchases. Pearl points to the low cost of these individual items as a potential reason.

The report also goes on to conclude that while these numbers are exciting, and a good indicator of the current state of affairs, not all is rosy in the South Korean gaming market. They point to intense domestic competition, a government crackdown on web board games, and increasing development costs is important challenges to be met.  However, the study also cites lack of capital for smaller publishers even though the South Korean government is pumping money into the industry.  I guess these small(er) publishers are flying below the government investment radar?