Nexon's New Web3 Game Journey
Entry into the Web3 Game Market with MapleStory Universe
TL;DR
This year, Nexon's blockchain game "MapleStory Universe" has been attracting a lot of attention as it prepares operations.
“MapleStory Universe” is based on the MapleStory IP. It has more than 180 million users worldwide and is expected to build a community-centered C2E ecosystem that is different from existing web3 games.
In addition, MapleStory, which has faced negative publicity due to the recent probability manipulation controversy, will face an important turning point in its ability to regain trust based on blockchain transparency.
MapleStory Universe in full swing
As we enter 2024, Nexon's ambitious journey into Web3 gaming is in full swing. In 2022, Nexon had already made waves by announcing plans to launch a blockchain game based on its flagship IP, MapleStory. Nexon's participation in the market is significant as it is a global gaming company and a center of innovation in the gaming industry. In particular, Nexon's bold use of its iconic game IP and the leadership of its core business by Nexon Korea CEO Kang Dae-hyun have attracted even more attention.
Recently, Nexon has been accelerating the development of its blockchain project MapleStory Universe. The project was originally led by Nexon Korea's blockchain business division, but Nexon is accelerating its development by concentrating dedicated personnel and assets from the Nexon Universe team (formerly Nexon Block).
Nexon Korea has been actively supporting Nexon Universe by participating in a capital increase of approximately KRW 125 billion (approx. USD 93.6 million) and transferring game development assets worth approximately KRW 24.5 billion (approx. USD 18.3 million). In addition, the company has been actively recruiting specialized talent from external sources. It has recently strengthened its business by hiring a large number of Web3 personnel such as blockchain platform planners, tokenomics designers, and NFT game developers.
This report will be taking a look at Nexon's blockchain project, MapleStory Universe. It explores the opportunities and challenges the company has faced, as well as future prospects.
MapleStory Universe, a blockchain gaming ecosystem
Nexon's "MapleStory Universe" project is not limited to just a gaming service. The project aims to build an entire blockchain-based gaming ecosystem centered around NFT technology. Consisting of four main products, the project encompasses more than just gaming services, such as including a community-driven creation platform. Here is a closer look at the key features of each product.
MapleStory N: MMORPG game incorporating blockchain technology based on the original MapleStory IP
MapleStory N Mobile: The mobile version of MapleStory N
MapleStory N World: Sandbox creation platform utilizing MapleStory IP resources
MapleStory N SDK: NFT-based MapleStory derivative app development system
MapleStory N is a new type of MMORPG game that combines NFTs and blockchain technology. The game allows players to acquire NFTs and tokens through gameplay, and the maximum quantity of items along with the acquisition cycle is predefined through the Dynamic Reward system. Since items are NFTs, they can be freely traded and transferred between users. These features are expected to play an important role in forming a user-centric market economy system, which is an important element of Web3 games. MapleStory N is also planned to be released on mobile platforms, so users will be able to enjoy blockchain games without platform restrictions.
MapleStory N World and SDK are products that support community-centered creative activities. MapleStory N World is a sandbox creation platform similar to the existing MapleStory World, and will enable users to create unique derivative content utilizing NFT assets obtained from MapleStory N. The SDK will be available for download.
The MapleStory N SDK will provide creators with a wider range of creative opportunities. It will support the development of various app services that can add value to the MapleStory universe beyond just creating derivative content. For example, we can expect to see merchandise production funding apps for MapleStory NFT holders, global quest apps that span the entire MapleStory universe, and more.
These products will not only support content development but also have a revenue-sharing system. According to Nexon's publicly available data, creators will be able to earn revenue based on the popularity of their content or apps. It is also expected that creators will be granted differential NFT-based item creation abilities, which can encourage active participation in the ecosystem.
Why blockchain?
As such, Nexon is making great efforts to build a broader ecosystem powered by blockchain based on the MapleStory universe. In doing so, Nexon is investing significant capital and manpower, and experimenting with decentralized elements, which is rare to see in the traditional gaming industry. These efforts seem to be driven by a goal to add sustainability to a long-term, successful game IP like MapleStory.
MapleStory is a flagship Nexon game that has been in service for over 20 years. It has received hundreds of updates to date, and the company has invested significant resources in producing new content. However, the gap between the speed of content consumption and creation has been growing, and it is likely that the content production rate that sufficiently maintains user playtime retention has already reached a breaking point. Nexon may have decided to switch to a C2E (Create To Earn) based ecosystem to encourage user-driven content production through rewards to overcome this problem.
Additional goals seem to be further strengthening the sustainability of the MapleStory IP itself by utilizing blockchain technology to build a user-friendly revenue model without compromising the quality and experience of the game and to secure a diverse fan base beyond the genre of MMORPGs based on MapleStory N World and SDK.
Why is MapleStory Universe getting so much attention?
While most Web3 games are failing to take off, the interest in MapleStory Universe is unusually high. Here are some of the reasons why that may be the case.
MapleStory is a powerful gaming IP with over 180 million global users
A community-centered C2E ecosystem that is different from previous Web3 games
Expectations of new gaming experiences with Nexon's wide range of AAA games
First, MapleStory is a game with a strong user base of over 180 million users worldwide. It's also worth noting that the core user base consists of Korean gamers, who have high purchasing power and loyalty. They are the first generation to experience online gaming with the launch of MapleStory, and the game remains a nostalgic reminder of fun childhood memories. This is evidenced by the fact that tickets for a recent orchestral performance of MapleStory's game OST sold out in three minutes.
Furthermore, these users are now in their 20s and 30s and have high purchasing power. The average age of MapleStory's Korean users is in their mid-20s, and their strong purchasing power drives a significant portion of MapleStory's revenue. This user base is likely to have a positive impact on the MapleStory Universe, which is likely to quickly absorb and grow the existing MapleStory user base.
Second, MapleStory Universe is revitalizing the Web3 game market with a different approach compared to traditional Web3 games. While most Web3 games focus on tokenomics-driven ecosystems, MapleStory focuses on community activities with a token-based reward system. Through MapleStory N World and SDK, it supports user creativity and gives creators the ability to create NFT-based items, encouraging them to actively participate in the ecosystem.
This approach is similar to the "open commerce" approach that has driven the explosive growth of the e-commerce industry, and it is expected to also play a key role in promoting diversity and creativity within the gaming ecosystem based on competition for rewards. This will provide gamers with a wider range of choices and create a virtuous cycle within the gaming ecosystem.
Finally, new and rich gaming experiences are expected through interoperability with Nexon's other major IP games. As mentioned by CEO Kang Dae-hyun at the Nexon Developers Conference (NDC) in 2022, MapleStory Universe is expected to expand to a broader blockchain-based ecosystem by connecting with Nexon's representative games. In particular, the integration with major games such as Dungeon&Fighter, which boasts 850 million global cumulative users, and Kartrider, which has 380 million users, is expected to be of great interest to gamers. The expanded ecosystem created by the integration of these games is expected to enrich users' gaming experience.
Challenges facing the MapleStory Universe
While there is a lot of excitement about MapleStory Universe, there are also some concerns.
Difficulty with full-service support in key regions such as Korea and China
Uncertainty around fee-based revenue models
Technical limitations of implementing blockchain-based games
One of the biggest challenges is that it is difficult to provide official services in South Korea and China, which are the main markets for MapleStory games. For instance, blockchain games are currently not allowed in South Korea due to regulations. These regions account for more than 80% of Nexon's total revenue, so there are concerns that MapleStory Universe will have a limited user base.
Nevertheless, Nexon has recognized this problem and set its sights on the global market from the beginning, and it is worth paying attention to its future strategy and direction.
In addition, it is uncertain whether a fee-based revenue model can generate enough revenue to replace the existing 'cash shop'. While it is important to ensure the sustainability of MapleStory's IP, it is also important for the company to be able to monetize the game. A fee-based revenue model has the advantage of being user-friendly and not distracting from the game, but it is unclear if it will generate meaningful revenue. For example, MapleStory's nickname exchange, New Name Auction, recorded a transaction volume of KRW 2 billion (approx. USD 1.5 million) in one month, which is estimated to have generated KRW 600 million (approx. USD 450 thousand) in revenue with a 30% fee.
In contrast, MapleStory's cash item, "Stochastic Cube," is estimated to have generated an average monthly revenue of about KRW 17 billion (approx. USD 12.7 million) in 2020. This difference in revenue model can lead to a significant difference in absolute revenue. Therefore, in-depth analysis and strategic design on the potential profitability of a fee-based model seems necessary.
Finally, there are technical hurdles to blockchain-based gaming. Despite significant advances in blockchain infrastructure, latency of 0.1 seconds or less is still a factor that can negatively impact gameplay. The consequent inconvenience that general users who are not familiar with the Web3 ecosystem may experience is also an important consideration. Therefore, it is expected that these technical requirements will need to be deeply thought out and addressed to improve the immersion and quality of the game.
Conclusion
The MapleStory universe is currently facing many challenges. Even now, many concerns have not been fully resolved, such as whether it will have a stable gaming environment, whether there will be problems with the tokenomics design process, and whether it will cannibalize the existing MapleStory game. In fact, MapleStory Universe was planning to build a blockchain game based on the Polygon mainnet, but is currently reconsidering its collaboration with Polygon.
Despite these concerns, Nexon's entry into the Web3 gaming market is a significant move in itself. This is because there is a growing negative perception of MapleStory games, as the company was recently fined by the Korea Fair Trade Commission for probability manipulation. Under such circumstances, securing transparency by adopting blockchain technology could be an important turning point for MapleStory in restoring trust. It will be interesting to see if MapleStory can improve the reliability of its game operations and strengthen its sustainability based on a community-centered creative ecosystem.
Participate in our 1-minute survey to help improve our weekly reports. As a thank you, you can download Tiger Research's original "2023 Country Crypto Matrix" spreadsheet, an all-in-one spreadsheet for the global virtual asset market analysis after finishing the survey.
Disclaimer
This report has been prepared based on materials believed to be reliable. However, we do not expressly or impliedly warrant the accuracy, completeness, and suitability of the information. We disclaim any liability for any losses arising from the use of this report or its contents. The conclusions and recommendations in this report are based on information available at the time of preparation and are subject to change without notice. All projects, estimates, forecasts, objectives, opinions, and views expressed in this report are subject to change without notice and may differ from or be contrary to the opinions of others or other organizations.
This document is for informational purposes only and should not be considered legal, business, investment, or tax advice. Any references to securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or an offer to provide investment advisory services. This material is not directed at investors or potential investors.