It’s hard to believe that Korean players have some resistance to “games with blockchain elements.”

STEPN has a user community of about 30,000 people in South Korea, most of whom know next to nothing about cryptocurrencies, while SuperWalk has been downloaded more than 100,000 times. Blockchain games like “Idle Ninja Online” and “Mudol” have topped the app store’s revenue rankings.

However, this P2E narrative came to an abrupt halt after the $LUNA crash in May 2022. In South Korea, games must be "classified" by the Game Product Management Committee before they can be released online, and public attitudes have changed after courts repeatedly rejected P2E games' classification applications.

That said, I don’t think Koreans hate “blockchain games” per se, but rather the negative associations they bring with them. This article will reveal the "resistance" and "challenges" in the Korean market.

1. The existence of tokens

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Korean gamers have always had a negative view of game publishers. In the 2010s, South Korea's three major gaming companies—NCSoft, Netmarble, and Nexon—were collectively known as the "3Ns," and not in a complimentary way. They are often accused of holding back the development of the Korean gaming industry.

Due to this bad reputation, token issuances were quickly considered exploitative. WeMade led the P2E narrative in South Korea, selling a large amount of WEMIX to acquire another company. The move was widely seen as an act of greed, with the company profiting not only from the game itself but also from the token sale.

Therefore, if you want to introduce Korean players to blockchain games without any negative reactions, you need to explain that your token "will not directly benefit the issuer or venture capital firm." It’s a hard sell, and the best statement is: “We don’t issue tokens.”

2. Alternative legal supervision

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Korean players are very active in conducting P2P trading or RMT (Real Money Transaction). South Korea’s largest P2P platform has an annual transaction volume of more than $750 million. However, this is prohibited by the game publisher. Games like “MapleStory” are relatively tolerant of RMT transactions and have even formed their own RMT communities. In Korean, this is called "쌀먹". (Deep Chao Note: "쌀먹" is a Korean term that is usually used to describe the behavior of conducting transactions through informal channels in games, especially the use of in-game resources for real currency transactions.)

Aside from the debate over whether blockchain is suitable for RMT services, there are two options for the legal structure of Korean games:

  • If trading only with paid currency, the rating is R18.

  • If currency that can be obtained in the game is also used in the transaction, this falls under the scope of gambling regulation. Legal issues arise when it comes to blockchain markets, as the goods traded may not necessarily be marked as R18, but converting them into fiat currency presents problems. Similar to tokens, NFTs are subject to regulatory restrictions in South Korea because they are considered “fungible” if they have significant value in external markets.

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The recent heated discussion about "revenue sharing" in some Web3 games is not new in South Korea. RF Online sparked controversy back in 2009 by paying monthly salaries to top guilds, but it wasn't against the law. This is allowed because these payments are not related to in-game items. However, if in-game items can be directly monetized, this is prohibited in South Korea.

3. Player age

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In South Korea, the number of young investors is considerable. They are responsive, smart and informative. Knowing that P2E models tend to break down, they avoid falling into a death spiral. It would be a mistake to assume that targeting a younger audience will be the key to winning over Korean gamers. When you look at the user demographics of successful blockchain games (or apps) in South Korea, the results are very interesting. The core user base of MIR4, MUDOL, STEPN and SuperWalk consists of men in their 30s and 40s. They tend to be numb to community noise and, interestingly, have less backlash against blockchain games.

I once wrote a blog guide about MUDOL’s successor for a Korean portal. Maybe young investors have stopped paying attention and think MUDOL is a failure, but to this day, there are still more than 350 people using my invitation code to register their first overseas centralized exchange (CEX), and these people have Is in his 40s.

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Many gaming projects still view South Korea as an attractive market, and not without reason. The competition here is very fierce. MMORPG (massively multiplayer online role-playing game) has a high ARPPU (Average Revenue Per Paying User) and excellent game quality. It is also the fourth largest game market in the world. However, some claims about its potential are exaggerated. I’ve talked to many players, and while they may be skeptical of blockchain games themselves, they rarely hate the keyword “blockchain.” Their concern is the greed of game publishers and the potential for casual players to suffer when token prices collapse.

Gamers don't seem to be opposed to official support for RMT (Real Money Transactions), which is currently a legal gray area, or could be a pure revenue sharing model. However, this may require giving up control of the "tokens" or waiting for the Korean government to clarify regulations regarding in-game monetization.

[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.

  • This article is reproduced with permission from: "Deep Wave TechFlow"

  • Original author: 1mpal