[P2E What Is It ①] Focus on the 'Kim Nam-guk Incident' and 'P2E'... 20% Annual Growth

Independent lawmaker Kim Nam-guk's 'cryptocurrency speculation controversy' has shifted to 'P2E (Play to Earn)', which means earning money while playing games. It is claimed that a game company provided cryptocurrency investment information to Kim to ease P2E regulations. Along with the controversy, the perception that P2E is no different from gambling, such as 'Bada Iyagi', is growing. Despite the lack of regulatory access domestically, game companies are unable to hide their embarrassment over the stigmatization of P2E as gambling. Regardless of domestic controversies, the global P2E market is rapidly growing every year. This article provides an overview of the unfamiliar concept and market of P2E for many.

Earn money while playing games... The emergence of P2E

P2E refers to the ability to convert in-game items and other assets obtained through gameplay into cash. This is not a new concept. Trading in-game items and assets for cash among users has been common in the past. However, unlike before, P2E differs in that game companies directly provide virtual assets (cryptocurrencies) or NFTs (non-fungible tokens) as assets using blockchain technology. Users can exchange assets acquired in the game for the game company's virtual assets and then convert these into cash.

The origin of P2E is 'CryptoKitties', created in 2017 by Canadian developer Dapper Labs. The real rise of P2E came with the release of 'Axie Infinity' by Vietnamese developer Sky Mavis in 2018. At that time, playing the game all day could earn about 7,000 to 8,000 KRW. Cases of people sustaining their livelihoods through gaming in countries like Vietnam became known, attracting millions of users worldwide. At one point, the monthly active users reached 3 million.

Among domestic game companies, Wemade first introduced P2E in 2021 through the global version of 'Mir4'. Mir4 with P2E is being serviced in the US, UK, Brazil, the Philippines, and other countries. However, domestically, P2E could not be integrated into games due to 'gambling' being prohibited under Article 32 of the Game Industry Promotion Act.

Article 32 states that 'No one shall engage in exchanging or brokering the exchange of tangible or intangible results obtained through the use of game content for cash or repurchasing as a business.' Since in-game assets can be converted into virtual assets and then into cash, authorities consider this gambling. Some argue that the controversy surrounding lawmaker Kim is a result of legislative lobbying by the gaming industry to ease P2E regulations.

Meanwhile, Mir4 ranked second in P2E mobile game revenue last year. Market research firm Sensor Tower analyzed that Mir4 has earned approximately $140 million (about 185.5 billion KRW) in cumulative global revenue since its release. The US market accounted for the largest share at 17.2%, followed by the UK (15.6%), the Philippines (13.7%), and Brazil (8.1%).

3.7 trillion KRW market by 2028... Annual growth rate of 20%

The P2E market is showing steep growth. Although regulations are being implemented in several countries due to gambling controversies, the global trend is toward deregulation. Singapore and Japan partially allow P2E focused on government-approved virtual assets. Since the concept of P2E is relatively new, many countries have no specific regulations yet.

According to global market research firm Statista, the worldwide P2E market size was $776.9 million (about 1.03 trillion KRW) in 2021. It is expected to grow to $2.8451 billion (about 3.77 trillion KRW) by 2028. The compound annual growth rate is 20.4%. Additionally, blockchain service market research firm DappRadar reports that there are more than 50 P2E games with over 1,000 daily active users.

Domestically, many game companies including Wemade are entering the P2E market. Most recently, Netmarble integrated P2E into its new title 'Modoo Marble 2: Meta World' and released it worldwide except for Korea and China. Com2uS and Kakao Games are also planning to launch games incorporating P2E.