[Asia Economy Reporter Kang Nahum] The domestic gaming industry is experiencing mixed fortunes day by day due to the fluctuating Bitcoin prices. Since virtual currencies and games are closely linked, more game companies are issuing their own coins or directly investing in cryptocurrencies. However, the rapid ups and downs of Bitcoin, the leading cryptocurrency, have caused repeated losses and recoveries.
According to the cryptocurrency exchange Bithumb on the 25th, as of 2:50 PM, Bitcoin is trading at 46.97 million KRW. This marks a 7% increase compared to 24 hours earlier, nearly recovering to the price level before the Russia-Ukraine conflict.
In particular, Nexon, which invested a huge sum of about 100 billion KRW in Bitcoin, is treading on thin ice every day. Nexon's Japan branch invested in Bitcoin in April last year, an amount corresponding to less than 2% of Nexon's total cash and cash equivalents. The total Bitcoins purchased then were 1,717 units. The investment was worth 100 million USD (approximately 113 billion KRW), with an average purchase price of 58,226 USD (about 65.8 million KRW) per Bitcoin.
Based on current prices, Nexon is experiencing a loss of about 29% (32.7 billion KRW). On the previous day, when Bitcoin prices dropped about 9% due to the Russia-Ukraine conflict, the loss rate surged to 35% (40 billion KRW). This means tens of billions of won appeared and disappeared within a single day.
Nevertheless, Nexon plans to continue investing in Bitcoin, confident in its 'value.' A Nexon representative stated, "We believe Bitcoin will be helpful in the long term to secure purchasing power for strategic investments necessary for our company's growth, such as new releases, new technologies, and acquisitions," adding, "We plan to hold it long-term as an asset close to fixed currencies like the dollar, won, and yen."
Game companies issuing their own coins are also deeply sighing. Since the cryptocurrency market tends to follow Bitcoin prices, the prices of self-issued coins are also struggling in the face of Bitcoin's decline.
In particular, Wemade's WEMIX has not shown signs of rebound despite the positive factor of 'coin burning.' Until November last year, WEMIX prices approached 30,000 KRW but have continued to fall and currently remain in the 6,000 KRW range.
Of course, the price decline of WEMIX is partly due to the 'massive WEMIX sell-off controversy' caused by Wemade itself, but the industry views the stagnation caused by Bitcoin's decline as a major factor.
An industry insider said, "For game companies, the price of cryptocurrencies is the key to the success of P2E games," adding, "If prices fall, the value of items also decreases, which can lead to the collapse of the in-game economic system. This is why each game company is sensitive to Bitcoin prices."
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