The South Korean government has moved to block the release of new play-to-earn (P2E) games and requested that existing ones be removed from Google Play and Apple’s App Store.
P2E gaming has become popular in the cryptocurrency industry. Gamers typically must first purchase game pieces as nonfungible tokens (NFT) in order to play the game and receive in-game rewards. However, gaming prizes over a few dollars are banned in South Korea.
The Game Management Committee (GMC) in the Ministry of Culture, Sports, and Tourism on Monday requested major mobile app marketplaces block any games that 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 all but impossible for P2E game developers to get their work listed on the most popular mobile app stores.
While the government’s attempt to mitigate the growth of P2E games by going straight to the app marketplaces is a new development, game developers in South Korea have been facing court battles since April to keep their P2E games up for sale in domestic app stores. The main problem is that some game apps could not obtain an age rating required for listing on app stores.
An official from the GMC stated that the commission is only following Supreme Court precedent in blocking P2E games from getting age ratings and being listed. The official said in a Tuesday statement:
“It is reasonable to keep P2E games from getting age ratings under the current law because cash rewards in games can be considered prizes.”
Prizes earned from gaming in South Korea cannot exceed 10,000 Korean won ($8.42) at a time.
The Fivestars for Klaytn P2E game and NFT marketplace were initially blocked in domestic app stores for a lack of a rating, but the team behind the game won an injunction in June, and the game was listed. A final decision on the legal standing of the game is expected to set a legal precedent for other P2E games, such as Infinite Breakthrough Three Kingdoms Reverse.
David Shin, head of global adoption at the Klaytn Foundation, told Cointelegraph about why he thinks regulators have taken a hard stance against P2E games:
“Play-to-earn games and crypto, in general, are viewed with apprehension due to the froth in the market that’s fueled by speculative activity. But once that froth subsides, authorities all over the world may be more amenable to regulating Web 3.0 as a permanent feature of the digital economy.”
The GMC’s stance has negative implications on all P2E gaming apps, including the suite of apps associated with the two most popular games to date, according to DappRadar: Axie Infinity and Splinterlands.