Bandai in Net gaming JV with Korean firms

By Staff and wire reports

TOKYO, Japan (CNN) -- Toy giant Bandai will form a joint venture with South Korea's Game Venture and DAIWON Cartoon Industry to develop online games for the Japanese market.

From October, the new venture will start distributing Game Venture's runaway hit title "Fortress" in Japanese via the Net.

The maker of the Digimon and Tamagotchi wants to capitalize on the online expertise of its partners to bring Korea's networked gaming craze to Japan -- a nation known more for its wireless infrastructure than broadband sprawl.

VIDEO CNN's Kristie Lu Stout gives her insight into the online gaming craze in South Korea. (July 12) Play video (QuickTime, Real or Windows Media)

Bandai Game Venture will be 60 percent owned by Bandai, with Game Venture contributing 30 percent, according to the Nihon Keizai Shimbun business daily.

The firm plans to develop games featuring Bandai's wildly popular Digimon toy character, and will target 15,000 customers in Japan during its first year.

Learning from Korea

Networked gaming has spread rapidly in South Korea, largely due to the country's hyper-speed Internet access services.

Game Venture's "Fortress" online title currently boasts over 9.8 million registered users in South Korea

South Korea has the highest take-up of broadband in the world, according to a recent OECD report.

"That's why Bandai is turning to Korea as a learning center to bring these things over to Japan," said Zachary Liggett, West LB's Tokyo-based game analyst.

Japan has lagged behind the South Korea, the U.S., and several other advanced nations in the rollout of high-speed broadband networks.

Analysts say the country's relatively unsophisticated Internet infrastructure is a major setback to any online gaming venture in Japan.

"Obviously the bottleneck in Japan is the rollout of broadband or even fixed-rate pricing for Internet use," Liggett told CNN.

"You can design programs but you need to be online all the time, and in Japan you're racking up your phone bill every time you're online."