The South Korean government has moved to block the release of new play-to-earn (P2E) games and requested Google and Apple to remove existing games from their respective app stores. P2E games have tasted a great popularity recently as crypto adoption has improved over the past year, allowing players to win exchangeable tokens which they can auction off at a higher price to earn money. Users in P2E games usually have to first purchase game pieces as non-exchangeable tokens (NFTs) to play the game and receive their own in-game rewards. However, rewards worth more than KRW 10,000 (roughly Rs. 625) are banned in South Korea.
The Game Management Committee (GMC), which is a regulatory arm of the South Korean Ministry of Culture, Sports and Tourism, has now asked major mobile app markets to block any games which require in-app purchases before playing the game. To combat the proliferation of what it sees as speculative money-making schemes, the GMC has made it practically impossible for P2E game developers to list their work on the most popular mobile app stores.
While the South Korean government’s attempt to reduce the growth of P2E games by going directly to the app market is a recent development, game developers in South Korea have been facing court battles that date back to April to keep their P2E games for sale on domestic app stores. The main problem is that some game apps cannot get the required age rating to register on the app store.
An official from the GMC stated that the commission was simply following the Supreme Court precedent in blocking P2E games like Axie Infinity from getting age-rated and registered. “It makes sense to prevent P2E games from being age-rated under current law as cash prizes in-game can be considered a reward,” the official said in a statement, as quoted by Cointelegraph. Currently, prizes obtained from playing games in South Korea cannot exceed KRW 10,000 at a time.
The Fivestars for Klaytn P2E game and NFT marketplace was initially blocked on domestic app stores due to a lack of ratings, but the team behind the game won a court order last June and the game was able to be listed. The final decision on the game’s legal standing is expected to set a legal precedent for other P2E games, such as Infinite Breakthrough Three Kingdoms Reverse.
GMC’s stance has negative implications for all P2E gaming apps, including a suite of apps related to the two most popular games to date as per DappRadar — Axie Infinity and Splinterlands.
As crypto markets grow, countries will likely increase efforts to regulate the space and while the increased control may be viewed as a significant negative catalyst by ardent crypto backers, experts argue that it is the necessary ingredient for wider crypto adoption.