Blockchain games in South Korea: Players are not opposed to on-chain, but have concerns about the greed of publishers

Original Title: 《Why Korean Gamers Resist Blockchain》

Author: 1mpal

Translation: Shenchao TechFlow

It is hard to believe that Korean gamers have a certain resistance to "games with blockchain elements."

STEPN has about 30,000 users in Korea, most of whom know almost nothing about cryptocurrency, while SuperWalk has been downloaded over 100,000 times. Blockchain games like "Idle Ninja Online" and "Mudol" have topped the revenue charts in app stores.

However, after the collapse of LUNA in May 2022, this P2E narrative suddenly stagnated. In Korea, games must go through the "classification" of the Game Product Management Committee before they can be launched, and public attitudes have changed after the courts repeatedly rejected classification applications for P2E games.

That is to say, I believe Koreans do not hate "blockchain games" themselves, but rather feel disgusted by the negative associations they bring. This article will reveal the "resistance" and "challenges" in the Korean market.

1. The Existence of Tokens

Korean players have generally had a negative view of game publishers. In the 2010s, Korea's three major game companies—NCSoft, Netmarble, and Nexon—were collectively referred to as the "3N," and not in a positive light. They are often blamed for hindering the development of the Korean gaming industry.

Due to this bad reputation, token issuance quickly came to be seen as exploitative behavior. WeMade led the P2E narrative in Korea, selling a large amount of WEMIX to acquire another company. This move was widely regarded as greedy, as the company profited not only from the game itself but also from token sales.

Therefore, if you want to introduce Korean players to blockchain games without any negative reactions, you need to explain that your tokens "will not directly benefit the issuer or venture capital firms." This is hard to sell, and the best statement is: "We do not issue tokens."

2. Legal Regulation of Fungibility

Korean players are very active in P2P trading or RMT (real money trading). The largest P2P platform in Korea has an annual trading volume exceeding $750 million. However, this is prohibited by game publishers. Games like "MapleStory" are relatively tolerant of RMT trading, even forming their own RMT communities. In Korean, this is referred to as "쌀먹." (Note: "쌀먹" is a Korean term that typically describes the act of trading informally within a game, especially referring to the use of in-game resources for real money transactions.)

Aside from the debate over whether blockchain is suitable for RMT services, the legal framework for games in Korea has two options:

• If transactions are conducted solely using paid currency, it is rated R18.
• If in-game currency is also used in transactions, it falls under gambling regulations. Legal issues arise in the blockchain market because the goods being traded may not necessarily be marked as R18, but converting them into legal tender poses problems. Similar to tokens, NFTs are also subject to regulatory restrictions in Korea, as they are considered "fungible" if they have significant value in external markets.

The recent heated discussions about "revenue sharing" in some Web3 games are not new in Korea. As early as 2009, "RF Online" paid monthly salaries to top guilds, which sparked controversy, but this did not violate the law. This was allowed because these payments were unrelated to in-game items. However, if in-game items can be directly monetized, it is prohibited in Korea.

3. Player Age

In Korea, the number of young investors is quite substantial. They are quick to react, smart, and well-informed. Knowing that P2E models often collapse, they avoid falling into a death spiral. It is a mistake to assume that targeting a young audience will be key to winning over Korean players. When you look at the demographics of successful blockchain games (or apps) in Korea, the results are quite 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, they have fewer strong objections to blockchain games.

I once wrote a blog guide about the successor to MUDOL for a Korean portal site. Perhaps young investors have lost interest, thinking MUDOL is a failure, but to this day, over 350 people have registered for their first overseas centralized exchange (CEX) using my invitation code, and all of them are in their 40s.

Many game projects still view Korea as an attractive market, and there are reasons for this. The competition is fierce, the ARPPU (Average Revenue Per Paying User) for MMORPGs is high, the game quality is excellent, and it is also the fourth largest gaming market in the world. However, some claims about its potential are exaggerated. I have communicated with many players, and although they may be skeptical about blockchain games themselves, they rarely hate the keyword "blockchain." What they are concerned about is the greed of game publishers and how ordinary players might be affected when token prices collapse.

Gamers do not seem to oppose official support for RMT (real money trading), which is currently a legal gray area, and it could also be a purely revenue-sharing model. However, this may require giving up control over "tokens" or waiting for the Korean government to clarify regulatory provisions regarding in-game monetization.