Amid Ban on Blockchain Games, South Korean Gaming Industry Increasingly Looks Overseas – TheStreet

The government’s refusal to repeal the ban has many developers searching for opportunities abroad.
South Korea’s gaming industry is increasingly going overseas, thanks to a ban on play-to-earn games and blockchain-based games.
Although Korea is among the globe’s top markets for gaming, ranking fourth worldwide for video games, the government is worried that rates for youth addiction to gambling are exploding in the country. Many in government fear this may be linked to the gaming industry.
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The Covid-19 pandemic saw an uptick in South Korean teenagers being treated for gambling addiction, the Korea Herald reported. Between 2017 and 2021, more than 7,000 Korean adolescents underwent treatment for addiction.
According to the Korea Creative Content Agency, more than 70% of Koreans are gamers.
This has prompted the government to prohibit the domestic gaming industry from releasing NFT games, play-to-earn games, or other games designed using decentralized blockchain technology, amid fears that the games might push teenagers deeper into a dependence on online game-playing.
Earlier this year, the election of pro-crypto President Yoon Suk-yeol looked as if it might reverse policy. On the campaign trail, Yoon initially pledged to repeal the country's ban on blockchain gaming, only to backtrack and exclude the demand from his campaign manifesto. 
Many believe the Yoon administration is unlikely to reverse course and reinstitute blockchain or play-to-earn gaming in the country.
Aware of this, South Korean game developers are eyeing a lucrative overseas market as a destination for their blockchain-based games, particularly after the meteoric success of blockbuster play-to-earn titles like Axie Infinity.
Since 2017, South Korean game developers have been working on their own blockchain and play-to-earn games – even ahead of the success of Axie Infinity by Vietnam-based game developer Sky Mavis. 
But a governmental ban on initial coin offerings in South Korea made it increasingly difficult to launch a domestic game built on blockchain technology.
More than a decade ago, South Korea also levied the so-called "Shutdown Law," which prohibited players under 16 from playing games online from midnight until sunrise. Earlier this year, the government repealed this law, but observers say antiquated views on gaming's ability to cause addiction remain.
Some say this traces back to the 2005 controversy surrounding the video game Sea Story, which quickly became linked with underground gangs and sparked a gambling fever throughout the country, leading to multiple suicides.
For now, game developers are not attempting to change governmental or societal attitudes around gaming. Instead, many are simply choosing to release games integrating play-to-earn models and blockchain technology overseas.
Among them is the South Korean gaming giant Netmarble, which has a new play-to-earn game titled Everybody’s Marble: Metaworld that focuses on buying and trading virtual land in the metaverse. Approximately 70% of the new games Netmarble pushed out this year were metaverse and blockchain-based, starting with the March release of A3: Still Alive.
“The blockchain-based games made by Netmarble will integrate the enjoyment of games, along with intangible assets through NFT, and I believe that the gaming industry will grow even bigger than it is now,” said Bang Jun-hyuk, founder of Netmarble about his company's expansion into blockchain and NFTs.
Similarly, the release of another Korean blockchain-based game, MIR4, led to a 620% surge in stock prices last year for game developer Wemade, transforming founder Park Kwan-ho into a billionaire. Four years ago, Park carved out a blockchain unit at his gaming company and unveiled the Wemix coin two years later.
The Legend of Mir game creator successfully hooked more than half a million gamers to his non-blockchain games before releasing play-to-earn blockchain games. Today, Park's company has a valuation of $3.9 billion. 
“It was wishful thinking at first to create a virtual world where people are allowed to make money while playing a game,” Park told Bloomberg last year. “That’s now possible with the development of blockchain technology, and the recent surge in share prices is reflective of our vision.”
Park also expressed hope that governments worldwide might offer clarity around blockchain-related regulations soon. "I am very interested in knowing … how different countries will implement regulations on the blockchain sector,” Park said. “There’s so much to worry about and be prepared for because I learned over the years that even a small risk can take down a company.” 
Sabrina Toppa is an award-winning journalist focusing on cryptocurrency, blockchain, DeFi, NFTs, and Web3. She has written for The Guardian, TIME Magazine, The Washington Post, The Atlantic, and other publications. Follow her on Twitter @SabrinaToppa. For story tips: [email protected]
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