South Korea: The land of the metaverse
South Korea would rank highly on the list of nations best positioned to capitalize on the prospects offered by the metaverse.
People in this country, where 98% of the population owns a smart device and more than 10% of the population owns at least some bitcoin, are eager to adopt new technologies. It is the fourth-largest gaming market in the world, with 33 million gamers estimated to earn $8.3 billion in revenue for the industry in 2021, despite its 27th-largest population and 13th-largest GDP.
Gaming is already a social activity resembling the metaverse. Cooperative or competitive games tend to be the most popular, and the United States is the leader in esports, with spectators filling stadiums to watch professional athletes compete.
According to Melbourne-based Zerocap researcher Nathan Lenga, who has researched South Korea’s metaverse plans, “For [Australians], our entertainment on a day-to-day basis would be watching TV or watching a movie or whatever.”
However, fifty percent of Koreans cited gaming as their daily source of enjoyment. Consequently, according to him, it has been fully integrated into their culture.
The metaverse and South Korea’s Digital New Deal
The “Digital New Deal,” an ambitious 58.2 trillion won ($44.6 billion) initiative by the South Korean government, contains 223.7 billion won ($171.6 million) designated to enable South Korea rise from its present ranking of No. 12 to No. 5 among nations with the highest adoption of the metaverse by 2026. The Korea Herald claims that analysts estimate the domestic metaverse will be valued 400 trillion won ($306.5 billion) by then.
The funds are distributed as grants to academic institutions and businesses developing metaverse platforms and technology, but they hardly need encouragement given that the country has filed nearly one of every five metaverse patent applications worldwide since 2016, placing it second only to the United States. Samsung and LG Electronics are the two largest local IT businesses in terms of filings.
Moreover, the metaverse industry is extremely established. 109 “scaleups” (a rapidly expanding company with a successful product) and as many as 300 additional metaverse businesses exist in South Korea’s metaverse sector as of June 2022, according to research by innovation consulting firm Mind the Bridge. According to the research, which indicates that scaleups have raised $10.6 billion to construct metaverse platforms, “their scaleup density ratio is three to four times that of Silicon Valley, the United Kingdom, Europe, and Israel.”
The nation’s metaverse plans were developed by the prior government, and President Yoon Suk-110 Yeol’s “national ambitions” contained ten metaverse-related objectives.
Why does South Korea have so much interest in this industry?
Since the government estimates that the industry would eventually generate 1.5 million virtual jobs, they believe that there is a substantial possibility for profit if they can enter the market early. Beginning with college classes, forty thousand students will be trained on the metaverse.
According to Lenga, the target of 1.5 million jobs will have a significant effect on the country’s wealth and rejuvenate its economy.
South Korea’s achievements in the metaverse
Sangmin “Sam” Seo is a representative director of the Klaytn Foundation. He leads the blockchain and metaverse branch of South Korean internet giant Kakao.
He asserts that when everyone was required to work from home due to COVID-19 and engage in virtual worlds like Zoom and Google Meet, opinions toward the metaverse underwent a dramatic transformation.
“Just seeing other faces on your screen is not that fun, right?” He affirms.
So, we were trying to find a more interesting platform that can help people work and also provide fun and entertainment. And I think that’s why people were more excited about the metaverse, and why the metaverse became a new area for Koreans and the Korean government.”
Klaytn celebrated its third anniversary this year by introducing its “metaverse blockchain for all” plan, which intends to facilitate the development of AAA blockchains, play-to-earn games, NFTs, and DeFi services for metaverse firms. For a superior metaverse experience, it has launched a $500 million grant program and is optimizing its blockchain for high scalability and low latency. Additionally, it provides “metaverse as a service” so that other companies, publishers, producers, and users can simply connect to the metaverse.
Seonik Jeon, the founder of Korean Blockchain Week said Kakao, the parent company of Klaytn and an internet juggernaut, is providing full support for its metaverse branch.
Based on Magazine, Brian Kim, the founder of Kakao, fully believes that blockchain is the company’s future, and he is currently focusing the majority of his staff, including all of the elite workforce, to Klaytn.
“Right now, they are having some issues because they are changing a lot of stuff. But once the settlement is done, I think they will grow fast,” He claims.
Ifland, a “social metaverse” platform built by local telecommunications operator SK Telecom, has 12.8 million subscribers by the middle of 2021, with 49 more nations having appeared by the end of November, and it aspires to conquer the globe.
What exactly is Seoul’s metaverse?
Even local governments support the City of Seoul’s plans to launch “Metaverse Seoul,” the first virtual platform for public administration in the metaverse, by the end of the year. The beta has already been utilized by approximately 3,000 locals, who visited the virtual City Hall and participated in games in Seoul Plaza.
During the five-year plan, residents will be able to enroll in the virtual campus of Seoul Open City University, register official complaints, and apply for licenses.
It was named one of the Best Inventions of 2022 by Time magazine, and other Korean cities, including Changwon and Seongnam, have declared their intentions to digitally clone themselves as well.
An Android and iPhone app allows users to visit the Israeli Embassy in South Korea’s diplomatic post in the metaverse, which was inaugurated in September. It was completely empty and devoid of content when Magazine visited it recently, serving as a helpful reminder that metaverse platforms are nothing more than pricey 3D games with little appeal unless they have a practical application for consumers.
Why did South Korea prohibit play-to-win gambling and blockchain?
A study by the Korean Center on Gambling Problems reveals that the average South Korean is two to three times more likely to have a gambling addiction than a person of a different nationality; however, the reason for this is unknown. Korea has a complicated relationship with gambling, with the exception of lotteries and horse racing.
South Korea is therefore enthusiastic about the metaverse but less so about adopting cryptocurrency.
This brought back memories of earlier concerns about video game addiction, which led to the Shutdown Law, which prohibited teenagers from playing online PC games after midnight between 2011 and 2021.
According to Doo Wan Nam, co-founder of the research and consulting firm StableNode, the prohibition on P2E games is evidence of the influence of the major traditional gaming corporations, which fought to have the games banned.
They saw their competitors going into play-to-earn, and they were able to gain literally millions of users. So, for them, it was like, ‘Is this fair?’ They have a lot of lobbying power because it’s a big industry.”
He notes that while lobbying is illegal, “people know there is lobbying, directly or indirectly.”
South Korean viewpoint for the metaverse
Jeon disagrees, claiming that the most prominent South Korean game developers are already considering blockchain-based games.
He believes “All the major top-tier gaming gaming companies are adopting blockchain right now and figuring out how they can make better play-to-earn games,” he says. “I think these gaming companies are preparing for the future.”
Com2uS, Kakao Games, Neopin, Nexon, and Krafton are some of the developers of P2E games. More than a dozen blockchain and metaverse games, including Golden Bros, A3: Still Alive, Yokai Dual, Meta Football, Seven Deadly Sins: Origin, and many others, helped the mobile gaming company Netmarble earn $2.2 billion in 2021. It has its own MarbleX blockchain ecosystem on Klaytn and utilizes the Inetrium cryptocurrency. Everybody’s Marble: Metaworld, which is part of a franchise with 200 million users, is one of the most popular games in the franchise. In this real estate investment game, players purchase land and construct properties in a metaverse universe modeled after our own.
Using blockchain technology, WeMade is arguably the most successful South Korean game developer. Since President Yoon is taking a more accommodating stance, the magazine’s CEO, Henry Chang, believes that the restriction will soon be lifted. He maintains, “I believe that the new government, the current government, will modify the laws to reflect the current situation. “I expect it will be next year.”
“I believe that once they have enough use cases and enough good stories, […] the Korean government will think about their previous plan differently, and they might change their declaration.”
This has not yet occurred, and the failures of Terra, Celsius, and FTX have done little to bolster the case for loosening laws on anything related to cryptocurrencies. However, officials from the Ministry of Science and ICT have stated that they are drafting legislation to govern the metaverse independently from those that govern video games.
WeMade developed the popular Legend of Mir series, and the company claims that Mir 4, which was released in 2021, is the best-selling blockchain game ever. As players advance in the game, they can descend into a virtual mine and collect metal to convert into the cryptocurrency Draco.
Since February of this year, they have had an average of 650,000 users per month, as explained by Lenga.
At the time of writing, there were 61,000 players online, for a total of 5.4 million for the month. These numbers pale in comparison to Fortnite’s 253 million monthly players or Minecraft’s 172 million users, but they are impressive for a blockchain game. However, some of these players are in Korea, where they are using a blockchain-free version.
Regarding his strategy for Mir 4, Chang adds, “I believe blockchain games are games, and that creating a successful blockchain game is comparable to creating a traditional game.”
There is a possibility that blockchain-based games are more entertaining than those without cryptocurrencies.
With DeFi services and its own stablecoin, WEMIX, WeMade unveiled Wemix3.0 in June, a gaming platform it believes will rival Steam in the blockchain gaming industry. This year’s net income increased by 72% compared to the same period in 2021, and the outlook was positive.
The largest exchanges in South Korea delisted the WEMIX token in late November due to doubts about the veracity of its supply numbers, effectively wiping out 70% of its market value.
Without cryptocurrencies, can the metaverse exist in South Korea?
Nam believes that the South Korean government is attracted to the metaverse because it harnesses the power of blockchain while remaining close to actual cryptocurrency.
Several decades ago, it was AI; now, it’s the metaverse “He contends. “From the government’s perspective, […] they’re willing to support many of these new technologies so long as you don’t have a currency,”
Unfortunately, a large number of South Korean metaverse platforms have moved in this direction to this point. Ifland, Metaverse Seoul, and the Israel-Korea Embassy are 3D world equivalents of the internet (although Ifland 2.0 will have cash-like points). The fact that even the two largest Korean banks, KEB Hana Bank and Shinhan Bank, have branches in the metaverse demonstrates how little disruption the metaverse causes to the established order.
Until users are motivated by the digital ownership afforded by NFTs to develop the metaverse themselves, the current generation of metaverse platforms is essentially just a fresh coat of paint on the same old Big Tech-dominated Web2.
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