South Korea’s blockchain game makers are looking to foreign shores

An unexpected face from South Korean President Yoon Suk-yeol’s administration when it comes to prolonged apathy from the authorities to the country’s gaming industry, forces it to stick to overseas markets.

In his election campaign, President Yoon had promised to lift the ban on the play-to-earn (P2E) industry in the country and adopt regulations that would encourage the broader gaming industry, which is increasingly developing blockchain-based titles. But that promise was omitted from his final election manifesto towards the end of the election.

“The president has not mentioned [P2E] since, told Dongyang University’s Kim Jung-tae Reject. “And the Minister of Culture repeats the same quote as a parrot – and says that we must take a careful and comprehensive approach,” said the professor of gamification at the private university.

“The gaming industry and academics are [left speechless]”We had several blockchain game models four or five years before the success of Axie Infinity,” said the professor, referring to the huge success of the P2E game developed by Sky Mavis Pte.

“What’s the reason? I can assure you that they still perceive gambling negatively,” the professor said.

Gaming is seen by the old guard in South Korea as a distraction from a national obsession with improving grades and going up in life. This has meant that the country’s game development industry, widely perceived as a powerhouse, has struggled to enter the domestic market.

In 2011, Seoul passed the Shutdown Law, which banned players under the age of 16 from online games between midnight and six in the morning. While the law has been repealed this year, the critical view of the industry remains.

Play-to-earn has a particularly bad rap in South Korea due to perceived similarities with previous examples of players who have been rewarded for playing.

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South Korea’s Game Evaluation and Administration Committee does not allow blockchain – based games to be released domestically, due to concerns about speculative behavior.

The concern stems from the Sea Story debacle in 2005 where the slot machine arcade game that rewarded players with gift cards led to the creation of an underground economy associated with local gangs. The gambling behavior that the game created led to dozens taking their own lives, shocking a country with a strict policy of non-gambling.

See related article: Blockchain game MIR4 is gaining global popularity despite bans at home in South Korea

Keeps up with the times

Despite the stigma, games and esports are still very popular in South Korea.

Just over 71% of the country’s population are gamblers, according to estimates from the Korea Creative Content Agency (KOCCA). This is higher than the estimated 65% of the North American population who are interested in gambling.

The KOCCA study found that about 11% of South Korea’s population visit the PC bang, a data center that charges an hourly rate for visitors, mostly playing online video games, more than once a week.

Although the professor is not in favor of carte blanche for the industry, some institutional recognition can help sustainable P2E titles drain the domestic market, Kim said.

This has come as game developers increasingly resort to blockchain technology to develop new titles.

South Korean game developers began turning to blockchain and games to earn titles as early as 2017. But strict rules against cryptocurrencies and blockchain technology, including a ban on initial coin offerings (ICOs) that would help smaller studios develop new titles, held back the country’s industry. .

That seemed to change with the success of Axie Infinity.

Since its release in August 2021, the massively multiplayer online role-playing game (MMORPG) MIR4, developed by South Korea’s WeMade Co., Ltd., regularly ranks among the top 20 games played globally on Steam, a digital video game distribution service .

The company also unveiled two more blockchain games in the first quarter of this year, helping to increase sales in the first quarter to 130 billion Korean won ($ 99.3 million), an increase of 72% from the same period last year.

As a result, South Korea’s top 10 gaming companies, including Com2uS, Kakao Games and Krafton, have announced plans to release blockchain-based games in the near future. Domestic market leader Nexon joined last month by unveiling a new project that merged non-fungible tokens (NFTs) with the popular two-dimensional RPG MapleStory, which has 1.3 billion players globally.

“As someone in the industry, I can tell you that it is highly likely that blockchain games will be recognized as a [proper] genre, ”a spokesman for Netmarble Corp. said Reject in an email interview. Netmarble used P2E elements in two of its games – A3: Still Alive and Cross Worlds, said the spokesman for one of South Korea’s most profitable gaming companies.

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Netmarble will help build an ecosystem where user participation is driven by “reasonable compensation”, and help create a good cycle, the spokesperson said. “We believe blockchain games are sustainable if they are based on ‘entertainment’, the essence of gaming,” the spokesman added.

Promised land

But with no sign of thawing in the official stance, Korean game major adheres to a proven mantra.

MIR4 developer WeMade achieved record revenue last year with the global success of the P2E role-playing game, especially in the Philippines. Overseas sales contributed about 180 billion Korean won (about $ 136.7 million) or more than half of total sales.

The company had been focusing on the global market from the very beginning while developing the blockchain gaming platform, a WeMade spokesman said. Reject in an email.

“Domestic circumstances will not be a reason to start or stop the business,” the spokesman added.

The first and second quarters of this year witnessed the launch of several P2E titles by major developers. The industry as a whole earned $ 8.1 billion in exports by 2020, or more than 70% of total exports in the content production industry that year, according to South Korea’s Ministry of Culture, Sports and Tourism.

In addition to diversifying content and building a sustainable token economy, Korean gaming companies will gain competitiveness by expanding global partnerships, the Netmarble spokesman said. Reject.