When it comes to micro-transactions, no one knows more about the market than Korean mobile publishers.

All Korean mobile games - whether free-to-play or paid purchase - use the system to enable gamers to buy virtual items.

Indeed, many games generate more revenue from their micro-transactions that the initial purchase.

So continuing PocketGamer.biz's focus on how micro-transactions will impact the iPhone market, we sent some questions to Gamevil USA's CEO Kyu C. Lee to find out how that expertise was going to be deployed on the App Store.

Pocket Gamer: What percentage of the Korean mobile games market is driven by micro-transactions?

Kyu C. Lee: It's hard to tell the exact percentage since some games have them and some games don't.

For some of our games, micro-transactions generate as much as the revenues we get from the game purchase. Currently Gamevil doesn't provide any free-to-play games, so we are charging the users on top of the download price, which is around $3-$4.

Do you think this is an Asian trend or will Western consumers adopt micro-transactions?

Western consumers will adopt micro-transactions. It was easier to educate Korean and Asian mobile gamers since micro-transactions were already extremely popular in terms of PC games. But if you consider all the free-to-play and social games launched in the West these days, it's just a matter of time. This is a global trend.

What do you use in-game micro-transactions for?

Most of them are used for virtual items and virtual currency. Some companies have tried extra content, but that hasn't turned out to be a big success.

This is because although it may be additional content to the original game, gamers tend to believe it was planned from the beginning, which makes them feel they only bought part of a game and are now being forced to buy the rest. For this reason, most of these attempts led to a bad consumer experience, which led to bad reviews.

What's the price range for your micro-transactions?

The usual micro-transactions we do are from 10 cents to a dollar. On top of this, we've also been able to have in-game virtual currency purchases, which can be even smaller.

How do you expect to use micro-transactions in your iPhone games?

We're taking a very cautious approach, and have been watching the market. The minimum purchase unit being 99 cents is one of the biggest hurdles.

The other thing is the user response to micro-transactions. We want to provide a good experience to the end users, and don't think we have to be first to adopt it.

If we were able to introduce another in-game currency to break the 99c down to smaller pieces, it would be great, but I'm sure Apple wants to protect its own currency from potential threats. Still, it would be very interesting if Apple comes up with its own virtual currency for the App Store, just as the other consoles have with their points.

Will future iPhone games from Gamevil involve micro-transactions?

All mobile games in Korea have micro-transactions, and they are a huge part of our revenues. We've actually been taking out micro-transaction from games such as Hybrid Eternal Whisper, Zenonia and Baseball Superstars for the iPhone, to allow us to watch the market a little bit more. Also, we want to see if Apple's policies change.

Do you think you'll be able to charge more than the 99c minimum?

I can't promise if we will do so, but I'm pretty sure other companies will be. The price of iPhone games in general may rise in the future, as the games become more and more sophisticated, and then certainly there will be more publishers offering additional premium content for more than 99c.

How much of an issue is the number of iPod touch users who still haven't upgraded to OS 3.0?

OS 3.0 is another big issue. The 3.0 upgrade adoption hasn't been as fast as we expected. It was a great move for Apple to reduce the price for the 3.1 upgrade to $5. We'll see how that changes the adoption rate.

How significant do you think it would be for Apple to enable in-app transactions for free games?

This would be a huge move for Apple but I don't think it has to use this card yet.

If you look back at why in-app purchases took off in Korea in the PC space, it had a lot to do with piracy. Doing everything server-based, such as monthly subscription or micro-transaction, was critical for the game publishers to generate revenue, and that's one of the reasons why companies started building things around this new business model.

In my opinion, the App Store is doing extremely well and Apple doesn't need to rush to be innovative. I'd expect this move to come from one of its competitors instead.

Thanks to Kyu for his time

You can keep up-to-day with Gamevil via its website and twitterfeed.