1. Game Industry Uniquely Celebrates Earth Day 🌍
April 22 is Earth Day, which was designated after the 1969 oil spill off the shore of Santa Barbara, California. The game industry celebrated Earth Day 2022 in its own unique way.
Xbox distributed sustainable items and points, and organized a charity event. Throughout the month of April, the Xbox console dashboard featured various environmental organizations for players to donate points to, such as WWF, Water.org, and The Nature Conservancy. Niantic, the U.S. location-based augmented reality company famous for Pokémon Go, formed a partnership with Ecosia. A tree was planted for every 5 km walked by a player in Pokémon Go, Pikmin Bloom, and Ingress.
On May 20, TentuPlay introduced a game called Alba: A Wildlife Adventure through Tentu’s Game Tour. In the game, there is a conflict between environmental conservation and town development. According to Alba’s developer Ustwo, Ecologi will plant one tree for ever copy of the game that is sold. As of March 28, 1,029,770 trees have been planted, and three habitats restored, including donations.
( Learn more about Tentu’s Game Tour ▶)
Major gaming companies at home and abroad adopted ESG management last year. It is positive how the game industry is considering the environment. In line with this trend, TentuPlay is developing games that show awareness of the climate crisis. We will continue to do our part to help protect the environment.
2. Sony Launches New PS Plus Plans for Age of Game Subscription
<Source: Sony PlayStation Plus>
On May 24,Sony revamped its PS Plus subscription service. Some see this move as an answer to Microsoft’s Xbox Game Pass. The existing online play service and streaming service under the PS Now plan will be replaced by three PS Plus plans. The three plans available in Korea are Essential (KRW 7,500 per month), Special (KRW 11,300), and Deluxe (KRW 12,900). PS Plus Deluxe is offered at a lower price than Premium because it does not include cloud streaming.
<Source: Sony PlayStation Plus service plan>
To thrive in the game subscription service market, it is important to have a continuous supply of new games that players can rave about. The competition to lead the market is likely to stiffen between Microsoft and Sony.
3. Online Regulations of US and China
The US Federal Trade Commission (FTC) will tighten regulations regarding the posting of fake positive reviews or manipulated reviews for product or service marketing. The guidelines now cover fake reviews, and a new principle is that advertisers should not distort or misrepresent consumers’ opinions when procuring, organizing, or editing their reviews. The FTC also warned against child-directed stealth advertising.
China’s big tech crackdown was among the game industry trends introduced last month. (Go to Game Industry Trends for April 2022 ▶) There have been complains that the government’s Personal Information Protection Law and content regulations have directly impacted advertisement sales. In fact, Tencent reported a 51% plunge in profit for the first quarter.
4. NFT in P2E Games
The P2E game Five Stars for Klaytn was demonstrated for the first time in a Korean court over the issue of whether the game promoted speculative acts. The Game Rating and Administration Committee refused the issuance of a rating for the game due to its NFT function, and SkyPeople has requested the suspension of execution of provisional disposition and the revocation of administrative disposition. The court questioned what value the items have outside of the game even if they can be made into NFTs. SkyPeople will be at an advantage if the game company is seen as not having any influence over item transactions among users.
<Source: Official website of Axie Infinity>
The interest towards NFTs in games is growing by the day. A major strength of the blockchain technology used in P2E games is that hacking, fabrication, and manipulation are difficult. Recently, however, there has been a wave of P2E hacks.
On March 29, the globally popular P2E game Axie Infinity was hacked. The developer Sky Mavis reported losses amounting to 173,600 Ethereum and USD 25.2 million (approx. KRW 32 billion) in USDC. As of March 29, 1 Ethereum was valued at KRW 4.1 million. This means that the total losses were KRW 740 billion over two transactions, but Sky Mavis only knew about this after a week. The FBI traced the theft to the North Korean hacking group Lazarus.
<Source: Official website of BAYC >
Another NFT-related hack occurred roughly a month after the Axie Infinity incident. This time, the victim was the Bored Ape Yacht Club (BAYC), the world’s largest NFT project. While the exact figure is unknown, the estimated losses are about USD 1 million (KRW 1.2 billion). The hackers posted a fradulent link to trick the victims. They first hacked BYAC’s official Instagram account, and posted a fake Airdrop for users to link their wallets to.
A hacking incident similar to BYAC broke out in April. The Discord server of Korea’s Klatyn-based NFT project MetaKongz was hacked, with losses amounting to 11.9 Ethereum, or KRW 48 million.
The growing interest in P2E games, NFT and blockchain has resulted in a higher hacking rate. The hackers are targeting the entire blockchain industry, ranging from P2E games like Axie Infinity to NFT projects such as MetaKongz and BYAC, as well as DeFi services like KLAY.
5. Various Collaborations Within the Game Industry
(1) Netmarble Invests KRW 9.4 Billion in Animation Studio; Kakao Games Invests USD 15 Million in Playable Worlds
Netmarble recently invested in Million Volt, gaining priority in the review of game development and service rights over the IP of the upcoming animation Herobooks, in addition to the gamification of all projects by the animation studio. Million Volt is an animation studio founded in December 2018 by Joo-gong Maeng, the director of the non-verbal animation series Lava. Hero Books, an action hero comedy in which the hero of a comic book appears in reality when his name is called, is due for international release this year.
On April 21, Kakao Games announced that its European affiliate Kakao Games Europe has made a strategic investment of USD 15 million in Playable Worlds, a US cloud-based game and metaverse platform developer. Playable Worlds was founded in 2018 by the developers behind Ultima Online, known as the first MMORPG, and the game platform Metaplace, bought by Walt Disney in 2010. With this investment, Kakao Games is leading the KRW 25 million Series B funding round of Playable Worlds, which plans to secure competitiveness in the development of cloud-based games and metaverse platforms. The Kakao group has been actively enhancing its global profile and expanding overseas. In January, Kakao Games invested USD 20 million (approx. KRW 24 billion) in the US game studio Frost Giant Studios, founded by game developers behind acclaimed titles like StarCraft and Warcraft.
(2) Saudi Arabia’s Public Investment Fund Buys 5% Stake in Nintendo
On May 18, Saudi Arabia’s Public Investment Fund (PIF) revealed in its report submitted to Japan’s EDINET that it has purchased 6,509,100 shares of Nintendo, which is equivalent to a 5.01% stake. PIF has been investing in various companies such as Capcom, Activision Blizzard, EA, Take-Two, Nexon, and NC. The combined value of PIF’s investment in Nintendo, following Nexon and NC, is JPY 410.6 billion, or KRW 4.5 trillion, The Nintendo purchase is said to be for investment purposes.
(3) Will Ubisoft Stay Independent or Accept Acquisition?
Private equity firms such as Blackstone and KKR have shown interest in the acquisition of Ubisoft. The reason why such firms are eyeing Ubisoft is that they are hoping to profit through a buyout. Their strategy is to raise the company’s value via M&A or restructuring, and then sell it off at a higher price. There have been several factors contributing to Ubisoft being valued lower than its actual worth. The company is said to have attempted to conceal evidence of institutional sexual harassment and sexual violence. Despite major IP such as Assassin’s Creed and Far Cry, Ubisoft’s sales were shaken by the poor performance of new titles. Its efforts to diversify sales also fell short.
In the past, Ubisoft defended itself against a hostile takeover by EA and Vivendi. Some believe that the company wished to maintain its independent status because the proposed conditions were not attractive. The industry is keenly awaiting the company’s next move.