[Special Report] 2023 G-STAR Recap: State of the South Korean blockchain gaming market
Market pioneers and observers
TL;DR
Of the 286 companies that participated in the 2023 G-Star Game Show, only 11 were blockchain-related, indicating a significant drop in interest in blockchain gaming compared to previous events.
Nevertheless, a handful of companies continue to explore the blockchain gaming market. Among them, WeMade stood out as the only company to emphasize blockchain elements in the B2C exhibition.
Many of the companies that announced blockchain games and strategies last year have opted for a "strategic retreat" to wait for market conditions to improve. However, their interest in blockchain technology remains high, as they are watching the pioneers in the market and looking for new opportunities.
How was G-Star 2023?
Blockchain companies participating in 2023 G-Star
The G-STAR Game Show is one of the largest game shows in Asia. This year it was held at BEXCO in Busan, Korea, starting with the Korea Game Awards ceremony on the 15th and ending on the 19th. A total of 286 companies participated in the event. However, due to bearish market conditions, only 11 companies were related to blockchain. This is a marked decline in corporate interest compared to previous events where blockchain was a major theme. (Blockchain-related companies were counted based on the inclusion of blockchain-related keywords in their company bios or submissions)
For the second year in a row, the main sponsor of this year's G-STAR Game Show was the blockchain gaming market leader WeMade. Most notably, WeMade was the only company to directly mention and feature blockchain gaming in its B2C promotional booth. This situation underscores the evolving dynamics of the market, where sustained innovation remains a challenge for many. Despite numerous Korean AAA game companies venturing into the blockchain gaming market and establishing dedicated Web3 teams since 2021, only a select few have consistently led and shaped the industry to the present day.
However, the B2B exhibit was a different story. It featured 11 companies, including WeMade and Haechi Labs (Face Wallet). From our interviews, it was clear that the remaining pioneers are still very active and strongly committed to the blockchain gaming market. As blockchain games are not yet accessible to the general public, blockchain gaming was not actively showcased in the B2C exhibits. However, in the B2B exhibit, many stakeholders were seen to be actively developing the industry and trying to find a point of contact with general users.
It was also evident from the attendee list that a wide range of industry stakeholders, from Layer 1 & Layer 2 projects to VCs, visited the 2023 G-STAR Game Show with interest in the blockchain gaming market, even if they did not have a booth at the event.
The consensus among attendees was that although there was less market enthusiasm for blockchain gaming compared to last year, pioneers are nonetheless continuing to make progress and build.
To summarize, there are remaining pioneers who are continuing to work on building the blockchain gaming market to the next level, and many companies are looking for potential opportunities with keen interest. Many observers seem to be hesitant to take the risk of entering the blockchain market head-on and are looking to enter the market later with reduced risk by emulating the pioneers' strategies. Below, we'll detail some of the market pioneers we saw in the 2023 G-STAR, as well as the companies that are watching them.
Pioneers in blockchain gaming
WeMade (WeMix)
WeMade was the only company to present blockchain-related content in both the B2C and B2B exhibits. In the B2C hall, there was an interactive, guided feature that explained the tokenomics applied to their medieval MMORPG game “Night Crow” at a level that the average user could understand, from acquiring tokens to selling them. In more detail, they explained how to acquire tokens through in-game auctions and how to mint their own characters as NFTs and sell them in the digital marketplace WeMix Play. These activities are aimed at educating users who are unfamiliar with the process of blockchain gaming to further drive its mass adoption. If successful, this will establish WeMade’s blockchain game process as the industry standard and create a competitive advantage compared to other companies.
In the conference hall, Hyun-Kook Chang, CEO of WeMade, delivered a presentation on "Game Content Innovation and Platform Innovation". Emphasizing the importance of content and platform business, Chang explained the transformative role of AI and blockchain technology in the game industry. He explained how AI enables storytelling and original artwork production on a fast and large scale, laying the foundation for the efficient development of the game market.
He continued with a presentation on platform innovation through blockchain. Referring to the history of platforms from PC to mobile, he emphasized that platform innovation is a key growth driver for the game industry. He noted that blockchain will inevitably be applied to games, and only companies that preempt the platform will survive in the market. He announced that WeMade has incorporated the lessons learned from their previous blockchain game “Mir 4” into “Night Crow” with concepts such as multi-tokenization, and is expanding the infrastructure through the Unagi project.
WeMade seems to be all-in on WeMix as the next growth driver for the company, but the fact that its current game portfolio is already hugely popular seems to provide a safety net that makes the development of WeMix a sustainable endeavor. In particular, the release of "Night Crow" in April, which generated 100 million USD in revenue in four months, suggests that WeMade can continue to challenge platform innovation because of its ability to provide great games as a top content producer.
Haechi Labs
Haechi Labs could be found at the B2B exhibit. They provide local non-custodial wallet services for Web3 projects and their business operation includes security audits, corporate wallets, and in-app single sign-on wallets. In particular, their in-app wallet “FaceWallet” has been adopted by many game companies due to its convenience, and their participation in the G-STAR event centered on this product as well.
Haechi Labs is currently focused on the Korean and Japanese markets. These markets are characterized by a large number of large gaming companies with strong IP and a high potential for public acceptance. The region is also characterized by a high concentration of gaming companies that can build on their existing strong gaming businesses and continue to invest in the blockchain space. In addition, many companies are receiving active inbound inquiries from Southeast Asia and are actively working on several partnerships.
At the B2B booth, teams like Indonesia's Creo Engine showed interest in Haechi Labs' FaceWallet, which shows that the usability and security of FaceWallet are gaining market recognition. Their collaboration with Nexon and on/off-ramp solution provider MoonPay further emphasizes these strengths. Despite the current downturn in the cryptocurrency market, Haechi Labs is optimistic about the future of blockchain gaming and expects the blockchain version of “MapleStory”, expected to be released next year, to make a significant impact in the market. This highlights the power of a strong IP and is expected to attract a lot of market interest despite ongoing regulatory challenges.
BPMG
Blockchain company BPMG showcased its blockchain gaming platform “GemHub” to the public, highlighting a new specialized gaming tournament system called “GemPion”. “GemPion” supports a variety of gameplay modes, allowing users to earn crypto rewards for participating in tournaments and completing missions. This provides a more immersive gaming experience and is an important factor in improving the accessibility of blockchain games.
BPMG's strategy is focused on making the blockchain gaming market accessible to small and medium-sized game companies. Through “GemHub”, the company provides consulting services and in-game token issuance support to game companies, lowering the barrier to entry to make the transition to blockchain gaming easier. As for “GemPion”, it aims to provide users with an enhanced gaming experience through seamless integration with gaming applications.
BPMG is seeking partnerships with gaming companies looking to enter the global blockchain gaming market. Their goal is to leverage blockchain technology to help indie game companies reach a global user base, which will further strengthen and diversify the entire gaming ecosystem. This strategy seems to be aimed at the small and medium-sized gaming companies that can be left out in big platform wars, looking to find their place in the market through products like “GemPion” that can cater to their needs.
XPLA
XPLA organized a side event where they gave away sandwiches for installing XPLA VAULT. XPLA staff were on hand to answer participants' questions about XPLA VAULT and guide them through the installation and use of XPLA VAULT. They also shared how blockchain technology can be applied to XPLA and how they are challenging the market.
NEAR, Vortex Gaming(Inven), MARBLEX, INTELLA X(Neowiz)
The main Web3 side event was called “Web3 Game Trailer”. With ‘Web 2.5’ as the goal, the event aimed to diagnose the current state of the Web3 gaming ecosystem and create a connection point that would serve as a basis for future developments. In line with this goal, many companies currently leading the Web2 industry and those at the forefront of the Web3 industry gathered to share their opinions and explore potential collaboration opportunities.
Others
Many overseas blockchain game companies such as Sunflower Land and Blowfish Studio also participated in the B2B exhibition. Sunflower Land is an Australian game studio that develops Polygon-based farming-themed metaverse games. Blowfish Studios, a subsidiary of Animoca Brands, has a portfolio of Web2-based games but is currently also focusing on Web3 game development.
In our recent interviews with several payment companies, we found that Web3 vendors are showing a lot of interest in payment providers like Payment Wall. However, most of the sizable payment companies have considered introducing cryptocurrency payment services, but have since put it on hold. This shift is likely due to regulatory uncertainty and the volatile nature of cryptocurrencies. In particular, payment platform Xsolla launched an NFT payment service called “NFT Checkout'' in 2022, but has now partially suspended operations due to deteriorating regulatory conditions.
Opportunity seekers behind the pioneers
Last year, many gaming companies announced their intentions to enter the blockchain gaming market, but have since put it on hold. Recently, many companies have taken a wait-and-see approach as market conditions have deteriorated. Previously determined companies have become cautious in the face of the ongoing controversy over blockchain gaming, overall price declines, and unclear blockchain gaming regulations. These market conditions are particularly affecting small and medium-sized enterprises, whose limited resources make it difficult for them to actively invest in new blockchain-related businesses.
Despite this reality, however, it is not to say that these companies are completely out of the business of blockchain technology. They perceive the current situation as a period of realignment with market conditions, closely observing the changes in the market and the success stories of pioneers to see opportunities for re-entry. This is a strategic choice by companies that do not want to miss future opportunities in an uncertain market, and it shows their commitment to exploring new possibilities even in times of crisis.
This approach is especially important in new technologies such as blockchain. When facing a volatile market and uncertain future, companies need to be careful in allocating resources and setting up the ideal market re-entry point. This approach is not only a reaction to short-term challenges but also based on a deep understanding of long-term business strategies and technological developments. Therefore, the current situation of these companies can be interpreted as a strategic retreat rather than a full stop.
Conclusion
The atmosphere at G-Star was as enthusiastic as ever. The venue was filled with various gaming booths and experience zones, and attendees formed long lines to experience the latest gaming trends and new technologies firsthand. This shows that despite criticism of stagnation, there are still millions of passionate users in the gaming industry, and there will be continued growth and development.
While the representation of blockchain gaming was somewhat subdued, it was a relief to see a persistent group of pioneers. It was clear that the gap between these pioneers and the companies following them was not just a matter of time but of experience.
Few companies had booths at the event, but there was a high number of relevant market stakeholders visiting the side events. The common consensus was that despite the recent improvement in market sentiment and rising prices, the real development of the industry is yet to be seen. This emphasizes the importance of pioneers in driving the industry forward, and it will be interesting their next move in the coming years.
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