The announcement of the salary increase launched by Nexon is making a big difference in the game world. Krafton raised the annual salary of developers by 20 million won, and raised the annual salary of new college graduates to 60 million won, fueling the competition for talent acquisition.
The issue of raising the annual salary of game companies is highly likely to persist for the time being. This is because large game companies such as NCsoft and Smilegate, which recorded trillions of sales, will negotiate salary from next month. In particular, NCsoft, the eldest in the game industry, is drawing attention as it is likely to fall into deeper concerns.
According to the game industry on the 26th, Krafton decided to increase the annual salaries of developers and non-developers by 20 million won and 15 million won, respectively.
In addition, Krafton has also significantly increased the initial salary for new college graduates. New developers are 60 million won and non-developers are 50 million won. This is the highest annual salary increase and the highest annual salary compared to large game companies with sales of over 1 trillion as of today.
This is not the first time a large game company has announced an annual salary increase. At the beginning of this month, Nexon announced that it would increase its employee salary by 8 million won. In addition, the company reported that the initial salary for college graduates was divided into non-developers and adjusted to 50 million won and 45 million won, respectively.
Netmarble prepared and released the same salary increase plan as Nexon, and gameville and Com2u, middle-sized game companies, have decided to increase the average annual salary of their incumbent by 8 million won.
Krafton drastically raises salary to operate a talent-oriented organization
If so, what is the reason that Kraftton’s salary has increased significantly? The company explained that it decided to increase the salary to the point that it changed the organization’s operation method to focus on human resources and that human resources should be the driving force of competitiveness.
In addition, the company also showed a willingness to actively compete for talent acquisition with other large game companies by conveying a plan to significantly increase the size of public recruitment to hundreds of people this year.
On the other hand, some of the industry interpreted that Krafton had raised its annual salary significantly to resolve negative internal public opinions such as lower annual salary compared to earnings growth, controversy over 52 hours per week, maintenance of the comprehensive wage system, and reduction of welfare. This is because the salary increase exceeded expectations.
Krafton is one of the few mid-to-large game companies that maintain a comprehensive wage system. The Comprehensive Wage System is a work system that includes all of the extra-work allowances, and developers who frequently work overtime have mixed likes and dislikes. There were also opinions that the crunch mode (maintaining long hours of work) and free overtime work, which are highly fatigued, do not disappear due to the working system.
In response to this opinion, Nexon, Netmarble, NCsoft, Smilegate, Pearl Abyss, Webzen, Wemade, etc. early abolished the comprehensive wage system. Gameville and Com2uS also decided to abolish the comprehensive wage system at the end of last year, and are currently preparing to apply it.
Ahead of negotiations with NCsoft and Smilegate salary
The market’s interest is focused on NCsoft and Smilegate ahead of the annual salary negotiations. This is because both companies set new earnings records last year, so they expect their annual salary increase to be large.
NCsoft has exceeded 2 trillion won in sales for the first time since its establishment. Last year, the company recorded sales of 2.42 trillion won, operating profit of 8248 billion won, and net income of 585 billion won. This is a 42% increase in sales, 72% in operating profit, and 63% in net profit compared to the previous year.
Smilegate is known to have surpassed KRW 1 trillion in sales for the first time since its establishment last year. Smilegate’s growth is attributable to the stable profits of the existing popular game, Crossfire, and the success of mobile games such as Epic Seven at home and abroad.
Above all, the two companies have been striving to give their employees the best treatment in the industry. This is why industry workers’ attention is focused on whether or not they will stand out in the competition for talent acquisition through salary increase.
However, some predicted that the two companies would have deep thoughts before deciding to raise their salaries as large as Krafton. This is due to the size of the workforce, which is different from Krafton.
NCsoft is known to have about 4,000 people, and Smilegate has about 2,700 people. In the case of NCsoft, assuming that the average annual salary is increased by 10 million won, a simple calculation could result in an additional 40 billion won in annual labor costs. Compared to the number of employees (1,800), Krafton’s annual labor costs increase by up to 36 billion.
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In addition, the general opinion of experts is that there may be a difference in the extent of the salary increase as the compensation system according to performance, welfare, and work atmosphere are different.
An industry insider said, “After Nexon announced a salary increase and declared a competition for talent acquisition, the wave is rising. Not only games but also IT workers expressed their surprise and envy at the news of Krafton’s salary increase.” Soft and Smilegate may also have a lot of worries over the salary increase. It is expected to determine the extent of the salary increase by calculating the size of employees and existing welfare benefits.