Online game

South Korean game producers hunt real money NFTs for gamers and businesses

  • Korean game makers embrace the NFT trend and put real money on the line
  • Gaming Company Shares Rise As Investors Bet on Larger Profits
  • Regulators ban NFT games in South Korea over gambling issues

SEOUL, Nov. 25 (Reuters) – South Korean mobile and online game producers are luring gamers with services using non-fungible tokens (NFTs), jumping on a trend that companies see as the future of the industry and igniting a strong rally in their shares in recent weeks.

An NFT is a digital asset that encompasses everything from images, videos to text, whose ownership record is tracked on the blockchain and is typically purchased with cryptocurrencies.

In the game world, the various characters, weapons, vehicles, and other items that players use to accomplish their particular tasks can be NFTs.

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The advantage is that these NFTs can be exchanged for digital money, i.e. cryptocurrencies.

However, South Korean regulators have banned nationally-enforced NFT games over concerns that these new services could fuel gambling addiction among teens and the very young. For now, these games are only accessible offshore.

“It is not blockchain technology that we are banning,” an official of South Korea’s Game Rating And Administration Committee told Reuters on condition of anonymity because she was not authorized to speak with the media.

“What we’re saying ‘no’ to is the NFT app that can be connected to real assets,” the official said.

That hasn’t stopped South Korean game maker Wemade Co Ltd (112040.KQ) from moving forward with the global release of its NFT game, MIR4, in late August.

The game has attracted more than 1.3 million players overseas, causing the company’s stock price to skyrocket by more than 600% since its launch. Its market value also increased more than 11 times to reach 6.6 trillion won ($ 5.55 billion) during the same period.

All over the world, the popularity of NFT games is also increasing rapidly.

Axie Infinity, an NFT game developed by Vietnamese unicorn Sky Mavis, drew 1.8 million players worldwide, generating $ 33 million in daily transactions in August, according to the company.

In Wemade’s MIR4 game, at present, players can only earn money by mining “Dark Steel” – the main in-game resource that helps increase weapon and character strength – which can possibly be converted into a listed WEMIX cryptocurrency.

The exchange of items – weapons, outfits and jewelry – obtained through gameplay and characters will soon be available through the company’s platform. XDRACOAn Young, head of Wemade’s public relations team, told Reuters.

Another NFT-applied game, “Rise of Stars,” is slated for release next year, An said.

WEMIX has traded in a range of $ 17.50 to $ 21.64 in the past 24 hours, up from $ 0.21 at the start of the year, according to CoinMarketCap.

GAME CHANGER?

Despite the local regulatory hurdle, other South Korean game developers are also looking to cash in on the NFT boom.

Earlier this month, NCSoft Corp (036570.KS) announced that it is preparing to release a game that includes NFT and blockchain elements next year. Its shares jumped to the daily limit of 30% on November 11 when the company made the announcement.

Krafton Inc (259960.KS), the maker of the blockbuster “PlayerUnknown’s Battlegrounds”, has also climbed 22% since Nov. 11 after the company said it was looking into integrating NFTs into games.

Gamevil Inc (063080.KQ), listed on KOSDAQ, and its subsidiary Com2uS Corp (078340.KQ) rebounded strongly earlier in November.

Analysts say the NFT trend is a sea change for the gaming industry and is likely to increase their profits.

“Winning was the main focus of the games … but with the integration of NFT and cryptocurrency, it became more than just winning – a method of making money,” said Lee Sang-hun. , analyst at Hi Investment & Securities.

“This, over time, would provide an opportunity to reassess the valuation of gaming companies, as well as an upward curve in the movement of stocks.”

($ 1 = 1,189.8000 won)

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Reporting by Joori Roh, additional reporting by Phuong Nguyen; Editing by Vidya Ranganathan & Shri Navaratnam

Our standards: Thomson Reuters Trust Principles.


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