'Gambling Controversy' Unfairly Targeted Blockchain Game Companies [Buaeri's Game Dictionary]

Wemade Tree Blockchain Game 'Cryptonado for WEMIX'

[Asia Economy Reporter Buaeri] "We are being unfairly discriminated against because we apply NFT (Non-Fungible Token) blockchain technology." Kim Seok-hwan, CEO of Wemade Tree, Wemade's blockchain subsidiary, passionately spoke at a forum hosted by Lee Sang-heon, a member of the Democratic Party of Korea, at the National Assembly on the 8th. He expressed regret that discussions about the advantages of games utilizing blockchain technology are being reduced solely to issues of gambling addiction.

What’s Happening with Blockchain Games?

The controversy began when the Game Rating and Administration Committee (GRAC) took a stance of 'rating refusal' for blockchain games. Without even receiving a rating, domestic blockchain games face difficulties from the start of their service.

In fact, the blockchain game 'Five Stars for Klaytn,' which was removed from the Google Play Store in April due to a cancellation notice of its rating classification by GRAC, won a provisional injunction lawsuit requesting a temporary suspension of the cancellation order. Wemade also provides blockchain-based games such as 'Bird Tornado for WEMIX,' 'Jaeshinjeon-gi for WEMIX,' and 'Crypto Tornado for WEMIX' overseas, excluding South Korea.

Unlike traditionally distributed games, blockchain games allow users to own in-game items. Users can trade and monetize the items they acquire through NFT platforms.

GRAC views the fact that "NFTs obtained as a result of incidental game progress can be freely traded and monetized" as grounds for refusal of rating under the Game Industry Promotion Act.

Due to GRAC’s policy, domestic blockchain game developers are turning their eyes overseas, abandoning the Korean market. Kim Kyun-tae, a partner at Hashed, said, "You cannot find any company newly starting blockchain game development in Korea."

On the 8th, a forum titled "What is the Future of Blockchain Games in the Republic of Korea?" was hosted by the office of Lee Sang-heon, a member of the Democratic Party of Korea.

Industry: "Government is Blocking Development"

Blockchain game companies argue that the government is hindering industry development by focusing solely on gambling addiction issues. According to SK Securities, the market for services using NFTs and blockchain games is expected to grow from $340 million (about 390 billion KRW) in 2020 to $2 billion (about 2.3 trillion KRW) in 2021.

Especially in blockchain games, various attempts are possible, and the industry explains that the business scalability is large. Partner Kim said, "NFTs improve the unreasonable environment where ownership of game items, which should originally belong to users, is inevitably held by developers or operators due to technical limitations," adding, "Users can be recognized for the time and effort they invest in their games, and it is also evaluated as a new growth model for the game industry."

CEO Kim also emphasized with examples that blockchain technology can be an opportunity for small and medium-sized game companies. For example, if Wemade’s 'Mir4' items are turned into NFTs, they become user-owned and can be used without anyone’s permission. If a startup entering the market creates a new game that can use 'Mir4 items,' it becomes easier to attract users.

CEO Kim stressed, "With the introduction of NFTs, startups can create creative and new content and quickly capture the market as an alternative."

What About Overseas?

'Axie Infinity,' created by Sky Mavis, a blockchain game developer based in Vietnam, surpassed $10 million (about 1.15 billion KRW) in sales last month alone. Dapper Labs, the developer of CryptoKitties, attracted 300 billion KRW in investment from global investors and is recognized for its potential with a valuation of 3 trillion KRW.

In addition, companies like Sandbox and Decentraland are also releasing games that implement metaverses using NFT technology.

GRAC: "Concerns About Gambling Addiction"

On the other hand, GRAC’s position still runs parallel to the industry. They argue that the risk of 'gambling addiction' in blockchain games cannot be overlooked.

According to GRAC, blockchain games that have been refused rating classification commonly allow users to gain property benefits through NFTs created from automatic progression or incidental game results, which is judged to constitute 'acts promoting gambling addiction' under the Game Industry Promotion Act.

Song Seok-hyung, head of GRAC’s rating service team, said, "Games can be played by young users, so there is concern that they might play for money," adding, "Global standards and domestic standards cannot be the same."

Editor's Note The goal of 'Game Dictionary' is to understand and clearly convey game-related issues every weekend. We always listen to incidents and various voices arising from games. Any tips are always welcome.

This content was produced with the assistance of AI translation services.