South Korea orders Google and Apple to axe crypto ‘play-to-earn’ games

  • South Korea’s gaming regulator has ordered Google’s Play Store and Apple’s App Store to remove blockchain-based play-to-earn games from their platforms. 
  • These games go against local gaming regulations by offering cashable NFTs and cryptocurrencies, the watchdog says.

Blockchain-based games are becoming a multi-billion dollar industry globally and gaining new users every day. However, none of these users will be from South Korea. The Asian country’s gaming regulator has called on Apple and Google to remove these play-to-earn games from their app stores as they violate the country’s gaming regulations.

South Korea is a big cryptocurrency market, one of the biggest in the world even. Blockchain technology has also found a high level of adoption in the country. However, the play-to-earn games are where the Game Management Committee (GMC) is drawing the line.

GMC has reached out to Google and Apple, whose Play Store and App Store are the two dominant app stores in the world and asked them to axe these games, local outlet Naver reports. It has also reached out to the smaller app distributors with similar instructions.

The regulator, however, sought to clarify that it’s not against blockchain games. Rather, it’s the fact that these games allow users to earn cryptocurrencies, which they can then exchange for fiat. This amounts to winning prizes while gaming and South Korea is very strict about it. The country’s gaming laws cap the maximum amount one can earn at 10,000 Korean won ($8.42) under its Game Industry Promotion Act.

Related: As gaming cryptos gain prominence, top analyst highlights 4 hot coins investors should watch

“Speculative money-making games”

The South Korean watchdog revealed that it’s been observing the gaming market and noticed a rise in the popularity of blockchain gaming. Aside from the normal global platforms like Axie Infinity, local firms are also diving deeper into the sector.

In 2021, six of the top ten best-performing stocks in the country were linked to blockchain gaming, including WeMade, the company behind the vastly popular MIR4 blockchain game.

Describing them as ‘speculative money-making games,’ the regulator stated:

It is reasonable to keep P2E games from getting age ratings under the current law because cash rewards in games can be considered prizes.

It’s not easy to explain why South Korea is so particular on gaming restrictions without recalling the Sea Story that happened 15 years ago. Sea Story was a slot machine-like video arcade game that shot to popularity in the mid-2000s in Korea. In place of cash, it rewarded users with gift certificates that were not outlawed at the time.

However, very quickly, cash centers sprang up close to the Sea Story arcades where gift certificates were exchanged for cash. Local gangs got involved and it ended up with the deaths of dozens of people, many of them through suicide.

This is why the GMC is against play-to-earn games. However, the head of the GMC has clarified that it’s not against blockchain gaming, just the rewards.

It is a misconception that the game committee blocks new technology such as blockchain and NFTs. The game industry promotion act, unlike other laws promoting culture, is established to prevent speculation.

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