Annals of Business Administrative Science 7 (2008) 33–44
Available at www.gbrc.jp

Online ISSN 1347-4456 Print ISSN 1347-4464©2008 Global Business Research Center

Management of an Online Game Development Project

Jong H. WIChung-Ang University
E-mail: jhwi@cau.ac.kr

Abstract: This paper discusses a case study of the project management of online content,
namely, an online game. For the analysis, the paper presents the patterns of management
approach adopted by analyzing a successful case of the development of an online gamecalled “FreeStyle,” created by JC Entertainment (JCE). The analysis results reveal that twovariables, namely, the CEO’s indirect management of the development team and the strong
intrinsic teamwork among the development team members, influenced the developers’
performance. Finally, the paper illustrates four patterns based on the two aforementioned
variables. The pattern of the development project moved from “direct management-low
intrinsic teamwork” to “indirect management-high intrinsic teamwork.” Due to the patternchange, JCE achieved a high development performance.
Keywords: online games, project management, indirect management, intrinsic teamwork

1. Introduction

such as China and Vietnam but also to advanced
countries such as the U.S., Japan, and those inThis paper is an exploratory research, which focuses

Europe. In contrast, Western and Japanese gameon the organizational management required tocompanies have failed to penetrate the global online

develop online content, especially online games,

game market. The fact that the Western and Japanese

which have different product attributes fromonline game companies are struggling to expand in

manufacturing products.

the global game market is a completely new

Korea became the most advanced country in thephenomenon, which was never witnessed in the

online game industry in the late 1990s. Korean online

personal computer (PC) and console game market

games have been exported not only to Asian countries

before (Roh & Wi, 2007; Wi, in press).

33

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The characteristics of the Korean online gamecapacity to develop games by maintaining a standard

industry are completely different from those of otherquality and are able to meet the global consumers’

traditional industries such as steel, shipbuilding, andrequirements.

automobiles. With regard to the traditional industries,

A lot of prior research on successful productwhich have developed since the 1960s amidst

development in manufacturing industries alreadyeconomic boom, products and services were firstexists. A good example is Clark and Fujimoto (1991),

developed in advanced countries and then exported

which

to Korea. Korean companies thus gained a

automobile industry. By conducting a field survey oncompetitive

cost

global automobile manufacturers, they point out thatleadership strategy based on the low cost achieved by

the competence of the Japanese automobile industry

ready-made technologies and dominant design

is derived from the heavyweight project manager

products (Wi, 2008, in press).

system. They argue that the Japanese companies wereadvantage

throughtheexamines product development in the

However, the Korean online game industry

able to develop products efficiently because theshows a heterogeneous industrial trajectory, whichheavyweight project managers received the enormous

differs from that of other Korean manufacturing

privilege of having control over developers fromindustries. As the Korean game companies succeeded

different units of the company. In addition, Nobeoka

to industrialize the online game market, product(1996) elaborates this research to elucidate howdevelopment and sector technologies could be

efficiently to control multidevelopment projects

established for the first time in the world. Althoughbesides managing single projects.

the technology and product prototype of the online

The above research contributed to broadening

games were derived from “Ultima Online,” whichthewas developed by a U.S. game company, Electronic

field. Moreover, this research focused on not only theArts, the complete industrialization of online games

industry-based

can be attributed to Korean companies. Therefore, in

product-based microanalysis. In particular, it tried tothe online game industry, Korea is not a follower, but

find out the most suitable development system for

an

the

efficient product development. In addition, Baldwin

competitiveness in technology and product quality,

and Clark (2000), Henderson and Clark (1990), andand not only in cost. This advantage enabled the

Clark (1985) illustrate the new theoretical concept of

Korean game companies to achieve competence andproduct architecture. Sanchez and Mahoney (1996)

dominance in the global game market. Theseand Wi (2006a, 2008) analyze the architecturalcompanies possess the capability of productchange—from integral product to module product ordevelopment, which indicates that they have thevice versa—and suggest that development systems

innovator;

moreover,itretains

34

strategyoftheproduct

macroanalysis

butdevelopment

also

the

Management of an online game development project

have to be modified in correspondence with theTable 1. History of JCE’s game developmentchange in product architecture.
However, in contrast to the extensive researchcarried out on the product development in the

Year

Month

2007

3

2005

9

2004

7

manufacturing industry, there is little similar researchon the content industry, especially the online content
industry. Japanese researchers such as Shintaku,
Tanaka,andperformance

Yanagawaof(2003)

Japaneseanalyzeconsolethesoftware12

development. They conclude that the pattern of

2003

1

utilizing developers should be based on the game7

genre. However, their research contains the limitationthat it does not analyze the success factors in content

2001

9

development.

EventsLaunched the beta service for“Aeronauts”
Entered into FreeStyle license
agreement with T2CN in China
Established JCE-China in Shanghai
Digital Park
Completed one year of service of
FreeStyle in Korea
Launched the beta service for “Priest”
Launched the casual shooting game“Rocket Roll”
Launched commercial service for“Joy City”
Established the “WorldnetGames,

Therefore, this paper studies the success factors
in the management

of

1999

11

Inc.” in the U.S., the U.S. subsidiaryof JC Entertainment

product development

organizations, by focusing on an online game that12

was commercially successful.

2. Research subject: FreeStyle
The subject of the research in this paper is FreeStyle,

1998

11

1994

5

Launched the commercial service for“Redmoon”
Launched the commercial service for“War Bible”
Established “Chung Media”

and Korea, respectively (Refer to Figure 1).1

an online game developed by JC Entertainment
In 1991, the creator of FreeStyle initiated the(JCE). JCE was established in 1994. It has developed
development of the game with the proposal of amany popular Korean online games such as War
one-page game development plan. However, thisBible, Redmoon, Joy City, and FreeStyle (refer toproposal was rejected owing to technological
Table 1). At present, JCE is servicing FreeStyle inbarriers. Instead, JCE decided to develop anotherTaiwan, China, the U.S., the Philippines, andcasual game called Rocket Roll.
Japan. FreeStyle achieved a huge success in both the
Korean and Chinese online game markets.
1

FreeStyle acquired 20 million subscribers and
0.3 million and 80 thousand concurrent users in China
35

In the case of online games, the success or failure of agame depends on the volume of users. As an online gameis a type of cyber community, the probability of successdirectly depends on the total numbers of users.

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possess the necessary engineering capabilities. It did
Figure 1. Tendency of concurrent users andnot even have 3D client programmers. Game

subscribers of FreeStyleengineers who wish to develop sports games have toensuretechnical

requirements

such

as

the

synchronization of motion and animation, highqualityrendering,

and

the

stability

andsynchronization of the server and network. At thattime, JCE’s engineering capability could not ensure
theserequirements,

and

the

development

of

FreeStyle had to be postponed.
Later, a new development team, called Tech
Concurrent users

Tree (TT) undertook the task of developing Rocket
Roll for one year. Although the team successfully
developed Rocket Roll, the game failed to acquire asubstantial number of users to sustain the game
service. Consequently, JCE discontinued the service
for Rocket Roll. However, this failure enabled the TT
team

to

acquirevaluable

assets.

Thus,

the

development process of Rocket Roll led to effective
teamwork among the members.
Discussions on the development of the next

Subscribers

game began after the commercial failure of Rocket
Roll. FreeStyle was once again considered as one of
At that time, my colleagues and I thought that we
couldn’t develop FreeStyle. Therefore, we
selected Rocket Roll instead. We thought that
we could take up the challenge of developing
FreeStyle once again after we finisheddeveloping Rocket Roll. I was sure that
FreeStyle would be a big opportunity for us asnobody had tried to develop that kind of gamebefore. But the only problem was the lack of
capability of my company (CEO).

the alternatives after a period of one year and three

Before developing Rocket Roll, JCE did notversion of a basketball game generally consists of ten

months since it was first proposed. Although the teamcontinued to encounter technical problems, whichhindered the development process, the TT teamremained enthusiastic.

2-1. Game concept
FreeStyle is a street basketball game. The formal

36

Management of an online game development project

players—five in each team. However, in the case of

mainly played by African-American youngsters instreet basketball, generally, each team consists of

the U.S. The players sometimes neglect the rules ofthree players. The initial proposal for developing

the game and are engrossed in demonstrating their

FreeStyle explained why JCE decided to develop askills.

basketball game, as follows.

The initial game concept was a five-to-fiveFirst, players can play basketball in a very small

formalbasketballgame

calledBasketMan

space. Therefore, various playing combinations such(BaM). However, this form of basketball contained

as one-to-one or two-to-two or using the whole court

several problems such as the difficulty of controllingor half the court, is possible. Even a one-to-one gamethe game and the disruption of the game due to theis normal. However, a one-to-one game in soccer,

violation of the complicated basketball rules. The

baseball, or volleyball would be unusual.

hip-hoop style street basketball was developed as an

Second, in basketball, each team consists of lessalternative to the formal basketball. Since there arethan five players—the least number of players amongno formal rules in hip-hoop style basketball, it was

all ball games. This means that one player has to

not required to consider constraints such asassumethedisruptions by players who are not aware of the rules

game. Hence, it can be said that basketball is the mostor by unruly players. Furthermore, street basketballeffective sport in terms of fitness, considering theallows the use of unique game graphic styles thatconcept of Basket Man,2 that is, one character per

improve character motions such as kicking the ball oruser in the game (In case of soccer, several players

double dribble and make them exciting.

various

roles

and

activitiesin

For these reasons, the TT team changed the

may not even have the opportunity to come in contact

game concept from a formal basketball to an informal

with the ball when they play in a 11-player team).

street basketball. Other details, except for the main

Third, basketball involves quick movements;

concept, remained similar to BaM.

hence, the players have the opportunity of scoring
many points in the game. In other words, the players

2-2. Organizational review process of thecan easily gain rewards in the game.3

FreeStyle development plan

FreeStyle is a hip-hoop style street basketballgame. “Hip-hoop” is a combined word. “Hip” refers

Every JCE game development undergoes a four-stage

to hip-hop, and “hoop” refers to the basketballreview process: (1) submission of a one-page

hoop.

with

proposal, (2) review of the proposal details, (3)hip-hop music as a form of a “show-off” street sport,

prototype review, and (4) review of the alphaHip-hoopbasketballisplayedversion. A game being reviewed is passed only if it is2
3

unanimously

Initial name assigned for the FreeStyle game
JCE’s internal documents

37

approvedbythereview

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committee. However, the CEO has the privilege toteam’s development plan. The two preconditions

veto the decision of the review committee. The

were that the team had to seek funds from thecommittee consists of 10 employees including thegovernment to continue their development, and theCEO, vice-president, marketing directors, andcommittee would review the plan once more within adirectors of development.

month. After one month, the TT team succeeded in

The TT team formulated the proposal for theobtaining the committee’s unanimous approval, anddevelopment of FreeStyle and submitted it to thethey received USD200 thousand from the Institute ofreview committee. The proposal passed the first stage,

Software Promotion Agency, a Korean governmentthat is, one-page proposal, without any problems, but

agency.

it faced with strong objections from the marketing
director and director of development at the second

2-3.

stage,

management approach

that

is,

the

reviewoftheproposal

Changes

in

the

CEO’s

project

details. Technological barriers and lack of users for

When the development of FreeStyle resumed, thesports games were the main reasons for the

CEO encountered three problems: technological

oppositions. At that time, the sales figures of sports

barriers of the sports game, few user’s of sports

games such as FIFA Online and NBA Live were notgames, and the decision of whether or not topromising in the Korean game market.

maintain the TT team. She also felt the tremendous

In addition, the failure of Rocket Roll gave thepressure of approving the FreeStyle development

TT team a negative reputation. At that time, manyplan in spite of it being rejected by the review

engineers had already left the team, and only fourcommittee.

core engineers remained. Hence, it was natural that

When I saw the prototype of FreeStyle, I had arough idea of the game, although some people
had negative comments like “the hoop net does
not shake when the ball is put in.” The prototype
showed the basketball court as located under ahighway, and it looked so real. The design of thegame characters was also improved. I felt thatthey resolved the critical technologicalproblems. Frankly, I was worried about whether
or not they were doing well. But after seeing theprototype, I felt assured. It’s not a matter of goodor bad quality of the output. The TT team was ina very serious situation in my company because
they failed in developing Rocket Roll. Hence, I
was worried more about whether they could

JCE’s developers did not focus on FreeStyle until thelaunch of the beta test.
However, the TT team did not give up thedevelopment process. They continually tried topersuade the review committee members to approvethe development plan. After the committee meeting,the team members met with the CEO and requested
her to veto the review committee’s decision.
The CEO laid down two preconditions to the TTteam at the meeting, because she knew that thestockholders would protest if she accepted the TT
38

Management of an online game development projectcontinue than whether they could succeed. I
wanted everybody to recognize that it’s not allover even if they failed just one time (CEO).

what to do and didn’t understand what I was
saying. This experience helped me realize that I
should let the developers develop the game bythemselves using their own ideas (CEO).

However, JCE’s policy toward managing theAfter the failure of Joy City 2030, thedevelopment project as described above was not
stipulated

from

the

early

stage

of

development of the casual game, Rocket Roll,thecompany. Before the failure of Rocket Roll, the CEO

proposed by a development team, commenced in the

directed and controlled all the details of thespring of 2002. At that time, JCE’s management
approach toward game development changed. The

development projects. For example, JCE developed acasual game called Joy City, aimed toward

CEO gave the engineers the autonomy in planning

females. JCE once even tried to develop a new

and developing a game, while she simply monitored
the progress. This approach gave the CEO thecommunity game, Joy City 2030, which was different
from Joy City. This development project wasadvantage of deciding to continue or stop a project

initiated by a top-down control approach by thebased on the progress of the project.
The closed beta service of FreeStyle wasCEO. Nevertheless, the Joy City 2030 project became

launched in the fall of 2004. A closed beta service

stagnant without any progress for several months.

refers to a test game service for only certain

Through the failure of Joy City 2030, the CEO

users. The users’ responses to this game wererealized that direct control over the development
project prevented the developers from performing

tremendous in spite of the developers’ concern before

well. She thought that a successful game development

the launch of the service. JCE’s financial and human
support toward FreeStyle increased after the successwould be impossible without achieving a consensus
and having a deep understanding of the developers’of the closed beta service. After the closed beta

game development plan. Accordingly, she attempted

service, an open beta service, which refers to a game
service for general users, was launched. The number

to change the approach of managing the project team.

of concurrent access users increased to 2,000 or 3,000
I really wanted to develop Redmoon and Joy
City2030, butit
didn’tgoasplanned. Motivating developers was noteasy. Furthermore, in the case of Redmoon, I
could share my ideas with the developers withthe help of the comic book with the same name,on which this game was based, but in the case of
Joy City 2030, I failed to share my ideas with thedevelopers because there was no original
story. They complained that they didn’t know

per day and managed to reach 80,000 in 2006.

3. Managing a project team
The management of the FreeStyle development
project revealed two facts. The first fact pertains tothe change in the CEO’s management approach
toward the development project. Until the failure of39

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Joy City 2030, JCE maintained a top-down direct
Figure 2. Pattern change of the CEO’s management
management approach, which means that the CEO

approach and integrity of a team

had complete control over the projects and monitored
the game contents in detail. However, because of theexperience where JCE had failed to develop Joy City
2030, the CEO tried to change her management
approachtowardthegamedevelopment

project. Beginning with the development of Rocket
Roll, JCE introduced an “observe and monitor”
management approach that involved indirectly
monitoring the progress of the game development
process.
suggestions. Though research on the automobile
As compared to the manufacturing industry, theindustry by Clark and Fujimoto (1991) and Nobeoka
developers’ creativity is more important in the content(1996) insist that while the management ofindustry, including the online game industry. Direct
development projects conducted by heavyweightcontrol over or management of developers sometimes
project managers showed good performances, theprevents

them

from

expressing

their
same

cannot

be

said

of

onlinegamecreativity. However, maintaining no control or adevelopment. The case analysis of FreeStyle argues
laissez-fairemanagement

approachresults

inthat providing the developer with autonomy andinefficiency and an increase in the development
resorting to indirect control by the management are
cost. Therefore, the FreeStyle case raises questions
essential.
such as “how to manage the contents of aIn the case of the manufacturing industry, thedevelopment project?” and “what is the most suitableproducts’

functional

performanceisapproach for controlling a project?” The case analysis
important. Therefore, how to design the layout ofreveals that indirect control, which does not imply noeach physical function becomes essential. For
control, would be more suitable than direct control inexample, with regard to automobiles, the consumers’
managing the development project of an online game.
satisfaction in terms of speed, stability, and comfort
The second finding concerns the high integrity withinwould be prioritized (Clark & Fujimoto, 1991;
a development team. Game developers often exhibit
Fujimoto, 1997).
Otaku or an obsessive personality. This means that
However, in the case of the content industry, thethey stick to their arguments and even resort tousers’ integral emotional contentment, which isleaving the team if managers do not accept theircatered
40

to

by

each

product

attribute,isManagement of an online game development project

important. Users would not be satisfied with a gamedevelopment industry that states that there is ajust because of the excellent design of the characters

positive relationship between the CEO’s indirector the background music. In the case of the content

management of a project team or the high integrity

industry, understanding and interaction among

within a team and the development performance.

developers are more important, than intheThe pattern of “indirect management andmanufacturing industry. Therefore, the content

powerful integrity” highlights the difference of thedevelopmentononline game industry from the manufacturinggroup capabilities, than the manufacturing industry

industry. An almost successful product development

does.

of automobile industry would be categorized as type 1

industry

depends

more

If two factors found in the paper are jointly taken

as illustrated in Figure 2. The CEO of the automobile

into consideration, four patterns can be obtained asindustry does not manage the project team indirectly,

illustrated in Figure 2. This figure was designed

and the level of integrity of a team is weaker than it istaking into consideration the management approach,in the game industry. The reasons behind the different

that is, direct or indirect, and the level of integrity

patterns in the two industries were a result of thewithin a team, that is, weak or strong. The analysis

different product attributes in the two industries.

reveals that the JCE project moves from pattern II to

As product architecture is divided into two types,

pattern IV; this indicates a movement from “weakintegral and modular (Baldwin & Clark, 2000; Iansiti

internal integration and direct control” to “powerful& Clark, 1994; Ulrich, 1995), the products of theinternal integration and indirect control.” JCE

automobile industry can be classified as integral

obtained a better development performance throughproducts. However, from the perspective of the online

this shift (Refer to Figure 2).

game industry, an automobile is considered as asemi-integral product. The development teams are
divided according to the components they use such as

4. Conclusion

engines, radiators, and air conditioners. Although

The paper studies the successful product development

each team frequently holds coordination meetings

management pattern by examining the developmentwith other teams (Clark & Fujimoto, 1991), all the

project

successful

development teams do not possess a high integrity as

development of FreeStyle could be attributed to two

a united organization as in the case of the online

factors—the change in the CEO’s management

game industry. In other words, the degree of integrity

approach toward the development project and thein the two industries is different.

of

JCE’s

FreeStyle.

Thehigh integrity within a development team. The

This paper provides directions for future

research set up a hypothesis for the content

research. One of the topics of research is the game41

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genre. FreeStyle, discussed in this study, belongs to557–605.

the casual sports genre. This genre can be developed

Fujimoto, T. (1997). Seisan shisutemu no shinkaron

in the short term, and the product life cycle is[Evolution

comparatively shorter than that of the massively

Yuhikaku. (In Japanese)

multiplayer online role-playing games (MMORPG).4

of

product

system].

Tokyo:

Nobeoka, K. (1996). Multiproject strategy: Post lean

Therefore, applying the results of this paper to otherproduct

development

game genres will be a good research subject.

management. Yuhikaku. (Japanese)
Sanchez, R., & Mahoney, J. T. (1996). Modularity,
flexibility, and knowledge management in product

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44

ABAS: Annals of Business Administrative ScienceVol. 7 December 2008

CHIEF EDITOR

Junjiro Shintaku, the University of TokyoEDITORIAL BOARD

Makoto Abe, the University of Tokyo
Takahiro Fujimoto, the University of Tokyo
Makoto Kasuya, the University of Tokyo
Nobuo Takahashi, the University of Tokyo
Technical Editor: Maki Nishida, Global Business Research Center

ABAS: Annals of Business Administrative Science is published annually by Global
Business Research Center, Marunouchi, Chiyoda-ku, Tokyo, JAPAN. http://www.gbrc.jp