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Thursday, June 8, 2023

Shares Of Little-Known Korean Game Company Soar After A Big Leap Into Blockchain

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In the past three months, shares of Korea-listed Wemade, a little-known online gaming company, surged more than 400% to give it a market capitalization of about $5 billion. The share price rise made Wemade’s founder and chairman, Park Kwan-ho, a billionaire, joining other Korean gaming billionaires like Nexon’s Kim Jung-ju and Krafton’s Chang Byung-gyu.

It all started when Wemade released its MIR4 game globally—across 170 countries in 12 languages—on August 26. Since then, MIR4 has been downloaded more than 1 million times on Google’s Play Store and brought in 11.5 billion won (about $10 million) in September alone. “MIR4 did not create something completely new,” says Park in a video interview from Wemade’s office in Seongnam, south of Seoul. “But what we have done is used blockchain to implement a system that could satisfy users’ needs. That’s why it’s getting so much phenomenal support from the user base.”

MIR4 is one of the few games based on blockchain technology developed by a major game company. Blockchain-based games like MIR4, Vietnamese startup Sky Mavis’ Axie Infinity and Hong Kong startup Animoca Brands’ The Sandbox allow players to earn cryptocurrency by converting in-game items into tradable crypto assets. Such games have been growing increasingly popular as cryptocurrencies gain mainstream acceptance and the value of digital assets continue to rise.

“They didn’t have that strong incentive to take that leap—that adventure—as we were willing to do.”

Wemade founder Park Kwan-ho

Other Korean game makers such as Netmarble, Nexon and Smilegate have thought about using blockchain and cryptocurrencies in their games several years ago. The digital currencies have long drawn interest as a replacement for in-game currencies that would help users easily purchase game items, as well as stamp out speculation and the distribution of unauthorized items. In 2018, for example, Netmarble and Smilegate explored using blockchain to develop cryptocurrencies for their games—but none were as successful as Wemade’s MIR4. “They didn’t have that strong incentive to take that leap—that adventure—as we were willing to do,” reckons Park.

But Wemade did have the incentive. The company makes most of its money from the MIR franchise (it’s preparing to launch MIR M—a mobile version of the game—early next year), which is particularly popular in China. “We were always a bit concerned about the future of the Chinese market,” says Park. “It’s a difficult market to work in.” Park’s concern proved correct when Beijing cracked down on the Chinese online games sector in August. “So what we did with MIR4 was we intentionally prepared it as a global service and adopted new technology to it as a breakthrough.”

In the third quarter of this year, Wemade made 63 billion won (about $55 million) in revenue, up 167% from the same period last year. Around 54% of the revenue came from overseas users including from Southeast Asia, Europe, North America and South America. Park’s immediate plan is to double down on its global expansion. “Our initial focus is to build on this momentum and expand our geographical market for not only MIR4, but other games we’re preparing,” he says. In addition to MIR M, Wemade is preparing to release AbyssRium, Dark Eden, Rise of Stars and Yulgang—all of which will be based on blockchain technology. Wemade is currently aiming to have 100 blockchain-based games by the end of the year.

As a pioneer of blockchain-based games in Korea, Park hopes the game genre will become a significant part of the entire gaming market. “Users have a wide range of needs and different preferences,” Park says, pointing to the variety of games such as casual games and first-person shooters.

“Some people want to earn money while playing games,” he says, “whereas others don’t want to mix earning money with what you enjoy.”

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