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And the metaverse sector is already well established. A report from the innovation advisory firm Mind the Bridge estimates that as of June 2022, South Korea\u2019s metaverse sector had 109 \u201cscaleups\u201d \u2014 a fast-growing business with a profitable product \u2014 and up to 300 more metaverse startups. \u201cTheir scaleup density ratio is 3-4 times higher than the Silicon Valley and the UK (3% of total), Europe and Israel (2%) ones,\u201d the report says, noting that scaleups had raised $10.6 billion toward building metaverse platforms.<\/p>\n
The country\u2019s metaverse plans were developed under the previous government, and current President Yoon Suk-Yeol cited 10 metaverse-related ambitions among his 110 \u201cnational tasks.\u201d<\/p>\n
Why is South Korea so keen on the sector? Because they see a big opportunity if they can get in early, with the government estimating it could create 1.5 million virtual jobs in the sector in the future. To get the ball rolling, it will train 40,000 students on the metaverse through higher education courses.<\/p>\n
\u201cThat\u2019s obviously going to have a significant impact on the wealth of the country and really stimulate their economy,\u201d says Lenga on the target of 1.5 million jobs. \u201cThey\u2019re trying to produce experts that will push the country to the top of the metaverse market and bring new developers into the country because of these programs and initiatives.\u201d<\/p>\n
How South Korea is leading in metaverse technology<\/h2>\n Sangmin \u201cSam\u201d Seo is a representative director of the Klaytn Foundation, the blockchain and metaverse offshoot of Korean internet giant Kakao.<\/p>\n
He says there was a sea change in views on the metaverse after everybody was forced to work from home due to COVID-19 and interact in virtual worlds on Zoom and Google Meet.<\/p>\n
\u201cJust seeing other faces on your screen is not that fun, right?\u201d he says.\u00a0<\/p>\n
\n\u201cSo, we were trying to find a more interesting platform that can help people work and also provide fun and entertainment. And I think that\u2019s why people were more excited about the metaverse, and why the metaverse became a new area for Koreans and the Korean government.\u201d<\/p>\n<\/blockquote>\n
To mark its third anniversary this year, Klaytn unveiled its \u201cmetaverse blockchain for all\u201d plan to help develop AAA blockchain and play-to-earn games, NFTs, and DeFi services for metaverse businesses. It announced a $500 million grant scheme and is fine-tuning its blockchain for high scalability and low latency for a better metaverse experience. It also offers \u201cmetaverse as a service,\u201d allowing other companies, publishers, creators and users to seamlessly plug into the metaverse.<\/p>\n
In case you missed Magazine\u2019s previous article on South Korea: <\/em><\/strong>South Korea\u2019s unique and amazing crypto universe<\/em><\/strong><\/p>\nSeonik Jeon, founder of Korean Blockchain Week, says that Klaytn\u2019s internet giant parent company, Kakao, is giving 100% support to its metaverse offshoot.<\/p>\n
\u201cKakao\u2019s founder, Brian Kim, personally strongly believes that blockchain is the future of Kakao, and he\u2019s putting most of his manpower \u2014 all the elite manpower \u2014 to Klaytn these days,\u201d he tells Magazine.<\/p>\nA promotional picture for Ifland. (Source: SK Telecom)<\/figcaption><\/figure>\n\u201cRight 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,\u201d he says.<\/p>\n
Local telecom company SK Telecom launched its own \u201csocial metaverse\u201d platform called Ifland in mid-2021, and it already has 12.8 million users. It has plans for world domination, having launched in 49 more countries as of the end of November.\u00a0<\/p>\n
What is the Seoul metaverse?<\/h2>\n Even municipal governments are on board with the City of Seoul creating the first virtual public administration platform in the metaverse with its \u201cMetaverse Seoul,\u201d which is slated to open by the end of the year. Around 3,000 residents have already played around on the beta, visiting the virtual City Hall and playing games in Seoul Plaza.<\/p>\n
The five-year plan will see residents able to attend a virtual campus of Seoul Open City University, lodge official complaints and apply for licenses. Visitors can take a virtual stroll through specific tourism content.<\/p>\n
Time magazine named it one of the Best Inventions of 2022, and other Korean cities like Changwon and Seongnam have announced plans to replicate themselves virtually too.\u00a0<\/p>\n
In September, the Israeli Embassy in South Korea opened a diplomatic mission in the metaverse that you can visit via an Android and iPhone app. When Magazine visited it recently, it was totally empty of people and content-free \u2014 a good reminder that unless metaverse platforms serve a purpose and can attract users, they are simply expensive 3D games that aren\u2019t much fun.<\/p>\n
Why did South Korea ban blockchain and play-to-earn games?<\/h2>\n Korea has a very complicated relationship with gambling, and a study from the Korean Center on Gambling Problems suggests that the average South Korean is two to three times more likely to suffer from gambling addiction than someone of another other nationality (though it\u2019s unclear why). Gambling, apart from lotteries and horse racing, has been banned.<\/p>\n
So, while South Korea is big on the metaverse, it\u2019s not that keen on incorporating cryptocurrencies. In December 2021, South Korea\u2019s previous government banned the most obvious forerunner of the metaverse \u2014 play-to-earn blockchain games.<\/p>\nTime Magazine named Seoul Metaverse as one of the best inventions of the year. (Source: Seoul Metropolitan Government)<\/figcaption><\/figure>\nThis threw a wrench into the works for local companies working on blockchain games and recalls previous concerns over video game addiction, which from 2011 to 2021 saw teenagers banned from playing online PC games after midnight as part of the Shutdown Law.\u00a0\u00a0<\/p>\n
Doo Wan Nam, co-founder of research and advisory firm StableNode, believes the P2E game ban is a sign of the power of the big traditional gaming companies, which lobbied to have the games outlawed.<\/p>\n
\n\u201cThey saw their competitors going into play-to-earn, and they were able to gain literally millions of users. So, for them, it was like, \u2018Is this fair?\u2019 They have a lot of lobbying power because it\u2019s a big industry.\u201d
The future of the metaverse in South Korea<\/h2>\n However, Jeon disagrees, saying that the top game companies in South Korea are already exploring blockchain-based games.<\/p>\n
\u201cAll the major top-tier gaming companies are adopting blockchain right now and figuring out how they can make better play-to-earn games,\u201d he says. \u201cI think these gaming companies are preparing for the future.\u201d<\/p>\nP2E games released or in development by Korean developers. (Xangle)<\/figcaption><\/figure>\nCompanies developing P2E games include Com2uS, Kakao Games, Neopin, Nexon and Krafton. Mobile gaming giant Netmarble, which earned $2.2 billion in 2021, has more than a dozen blockchain and metaverse titles, including Golden Bros, A3: Still Alive, Yokai Dual, Meta Football, Seven Deadly Sins: Origin, and many more. It launched its own MarbleX blockchain ecosystem on Klaytn and has a currency called Inetrium. One of its biggest titles is Everybody\u2019s Marble: Metaworld, part of a franchise with a user base of 200 million. It\u2019s a real-estate investing game where players buy land and develop properties in a metaverse world based on the real world.<\/p>\n
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Will South Korea lift the ban on blockchain games and P2E?<\/h2>\n Arguably the most successful South Korean game company utilizing blockchain technology is WeMade. When Magazine catches up with its CEO, Henry Chang, in Seoul, he says he believes the ban will soon be lifted thanks to a more favorable approach from President Yoon. \u201cI think the new government, the current government, will modify the laws according to the current situation,\u201d he says.<\/p>\n
\n\u201cI expect it will be next year.\u201d<\/p>\n<\/blockquote>\n
Klaytn\u2019s Seo agrees: \u201cI believe that once they have enough use cases and enough good stories, [\u2026] the Korean government will think about their previous plan differently, and they might change their declaration.\u201d<\/p>\n
This has yet to happen, and the collapse of Terra, Celsius and FTX hasn\u2019t really helped the case to ease regulations on anything related to crypto. However, officials from the Ministry of Science and ICT have indicated that they\u2019re working on laws to regulate the metaverse that are separate from video game regulations.\u00a0<\/p>\nThe Israel Korea metaverse was totally empty when Magazine visited. (Source: Andrew Fenton)<\/figcaption><\/figure>\nWeMade created the popular Legend of Mir series and claims that Mir 4, released in 2021, is the most successful blockchain game in the world. It enables players who\u2019ve gotten far enough in the game to head down a virtual mine to gather metal to smelt into the cryptocurrency Draco.<\/p>\n
\u201cIt became insanely popular,\u201d says Lenga. \u201cSince February of this year, they\u2019ve had 650,000 average users.\u201d<\/p>\n
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At the time of writing, there were 61,000 players online, with 5.4 million over the month. Sure, that\u2019s small beer compared with the 253 million monthly users of Fortnite or the 172 million people playing Minecraft, but it\u2019s very good for a blockchain game. Some of those users, however, are in Korea, where they\u2019re playing a version without blockchain.<\/p>\n
\u201cI believe that blockchain games are<\/em> games, and to make a blockchain game successful is very similar to a regular game,\u201d Chang says of his approach with Mir 4.<\/p>\n\n\u201cGames with blockchain can be more enjoyable than games without cryptocurrency. So, I believe that in three years, almost all games, conventional games, can be transformed into blockchain games.\u201d<\/p>\n<\/blockquote>\n
In June, WeMade launched Wemix3.0, a gaming platform it hopes will become the Steam of blockchain gaming, with DeFi services and its own stablecoin, WEMIX. Net profit grew 72% this year compared with 2021, and the future was looking bright.\u00a0<\/p>\n
However, in late November, South Korea\u2019s biggest exchanges delisted the WEMIX token over concerns about the accuracy of its supply figures, instantly wiping 70% off its market capitalization. The company is taking legal action, but this once again demonstrates that blockchain developers face significant risk.<\/p>\n
Can the metaverse exist without cryptocurrency in South Korea?<\/h2>\n Nam believes the metaverse is so appealing to the South Korean government because it harnesses the power of blockchain while being a few steps removed from cryptocurrency itself.<\/p>\n
\u201cMany years ago, it was AI. Now, it\u2019s metaverse,\u201d he says. \u201cFrom the government\u2019s perspective, [\u2026] as long as you don\u2019t have a coin itself, they\u2019re willing to support a lot of these new technologies.\u201d<\/p>\nShinamon Bank\u2019s Metaverse platform. (Source: Shinhan Financial Group)<\/figcaption><\/figure>\nUnfortunately, that\u2019s precisely the direction many of the South Korean metaverse platforms have taken so far.Ifland, Metaverse Seoul, the Israel\u2013Korea Embassy \u2014 these are just 3D-world versions of the existing internet (although Ifland 2.0 will have cash-like points). You can tell how non-disruptive the metaverse is to the existing order because even the big Korean banks KEB Hana Bank and Shinhan Bank have metaverse branches.<\/p>\n
Until users themselves are the ones building the metaverse, incentivized by digital ownership provided by NFTs, the current generation of metaverse platforms is really just a new lick of paint on the same old Big Tech-dominated Web2.<\/p>\n
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Andrew Fenton<\/h2>\n Based in Melbourne, Andrew Fenton is a journalist and editor covering cryptocurrency and blockchain. He has worked as a national entertainment writer for News Corp Australia, on SA Weekend as a film journalist, and at The Melbourne Weekly.<\/p>\n
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