Facebook, the biggest social media platform in the world, recently changed its name to Meta and announced its full-fledged pivot to the metaverse. But Facebook is not the only tech company that is invested in exploring a 3D virtual reality where people interact with others using avatars of themselves. Video games such as Roblox and Fortnite are already popular among Gen Z, where they create and interact with each other within their own universe.
The metaverse started as a popular concept in sci-fi novels and movies. The term was coined by Neal Stephenson’s 1992 novel “Snow Crash” then later used in Ernest Cline’s novel “Ready Player One.” But with the development of more advanced technology and the pandemic limiting in-person interactions, the application of the metaverse has been accelerated and more commercialized in the past few years.
South Korea is an emerging key player in the metaverse, spring boarding from its strong gaming industry and popular culture content that attracts global fans.
South Korea has the world’s fourth-largest gaming market, which is expected to exceed 18 trillion won ($16.6 billion) this year and maintain its position as the largest cultural export from South Korea. The gaming industry in one sense has been already utilizing virtual engagement through massively multiplayer online role-playing games (MMOPRG), but Korean game companies are also looking to expand into the metaverse by utilizing their own game characters and intellectual properties. For example, Nexon, the leading game company in South Korea, plans to launch new metaverse content using its popular Maplestory IP. Another leading game company, Netmarble, has created a subsidiary metaverse entertainment company to develop a virtual reality platform for virtual K-pop idols.
The metaverse is increasingly attractive outside of the gaming realm as well. Naver Z Corporation’s Zepeto is currently a leading metaverse platform in South Korea, with over 200 million users globally, 90 percent of whom log in from outside of South Korea. The platform is used for social gatherings as well as shopping; popular brands such as Nike, Gucci, and Ralph Lauren have opened up virtual stores within Zepeto to sell their digital products. Zepeto studio also allows users to design their own items and monetize them. It recently announced that it will incorporate games, directly challenging Roblox.
The K-pop industry is also invested in the popularity of the platform. BTS successfully launched its new single, “Dynamite,” on Fortnite in 2020 and other K-pop artists like Black Pink are utilizing metaverse platforms such as Zepeto to engage with their fans. In 2020, YG Entertainment and Big Hit Entertainment (now under Hybe) announced an investment of 12 billion won (appx. $10.4 million) in Zepeto.
SK Telecom, a South Korean telecommunication company, has also created its own metaverse platform called “ifland.” Unlike Zepeto, ifland allows users to share PDF documents and mp4 files which makes it a popular platform for organizations to host conferences, orientations, trainings, and town hall meetings. The education and tourism industry is also expanding its virtual engagement on the metaverse by hosting student orientations and exhibits to reach a wider audience during the pandemic.
The South Korean government is also supportive of technological innovations in the metaverse and has been leading the way toward public-private partnerships. The Ministry of Science and ICT created a “metaverse alliance” in May 2021 to coordinate and facilitate the development of virtual and augmented reality platforms. So far 500 firms, including Samsung, Hyundai Motors, SK Telecom, and KT have joined the alliance. As a part of President Moon Jae-in’s Digital New Deal 2.0, the government pledged to provide up to 30 billion won ($26 million) in 2022.
Despite the hype, many metaverse platforms are still in the early stage of development in both South Korea and globally. Along with technological advancement, there are fundamental aspects of this trend that need to be addressed.
Most important of all, fast and reliable internet, and the infrastructure to match, are crucial in order to make these metaverse platforms accessible from anywhere. South Korea is one of the most digitally connected societies in the world, with one of the fastest internet speeds. However, the recent national internet outage caused by a routing problem at KT showcased its vulnerability as well. The largest internet provider in South Korea caused panic and chaos with disruptions in business and education for more than an hour; now KT will pay out up to 40 billion won ($33.97 million) in compensation.
The ongoing legal battle between SK Broadband and Netflix is another example of the internet service providers being stressed with high internet traffic, including from streaming. With more complex technology such as the metaverse and even autonomous vehicles down the road, the development of proper infrastructure that can support the increased internet traffic must follow. South Korea’s nationwide 5G plan coverage is still underway. Currently, 5G service is only available in the major metropolitan areas such as Seoul but is expected to expand in coming years.
Additionally, as the technology is headed into new territory, persistent debates on data protection, privacy, and regulation will also continue. As economic activities expand to the virtual world, use of blockchain technology such as cryptocurrencies and non-fungible tokens (NFT) will increase as more people own and monetize decentralized digital assets. Decentraland is a leading example – users purchase and develop virtual parcels of land as a form of NFT and use its native cryptocurrency, called MANA.
The South Korean government’s early engagement could be good in terms of forming a safe environment for companies to be innovative while setting norms in the new space. The current global debate on the regulation of big tech companies is still ongoing.
As more companies across industries are investing in metaverse platforms and related technologies, there are endless possibilities for how virtual space could be utilized beyond video games. More collaborations between brands, industries, and new products that branch off of this technology are expected.
As South Korea slowly adjusts to the new normal under its “With Corona” policy, virtual engagements are here to stay. It is still too early for the metaverse to significantly alter or replace our reality but at this rate of investment, it might come sooner than we think. It will be interesting to see what role the South Korean government plays in the new realm of technology and how the norms and rules they form could influence industries throughout the world.