The South Korean government has taken action to prevent the release of new games for earning (P2E) and has demanded that existing games be removed from Google Play and the Apple App Store.
P2E games are becoming popular in the cryptocurrency industry. Players generally must first purchase game items in the form of non-fungible tokens (NFTs) in order to play the game and receive in-game rewards. However, gambling prizes over a few dollars are prohibited in South Korea.
The Games Management Committee (GMC) of the Ministry of Culture, Sports and Tourism on Monday asked major mobile app markets to ban all games that require in-app purchases before playing a game.
To combat the spread of what it sees as speculative money-making schemes, GMC has made it nearly impossible for P2E game developers to publish their work on the most popular mobile app stores.
While the government’s attempt to curb the growth of P2E games by going directly to app markets is a new development, South Korean game developers have been facing legal battles since April to offer P2E games for sale in local app stores. The main problem is that some game apps cannot reach the age limit required to be listed on the app stores.
A GMC official said the committee is only following the Supreme Court’s precedent regarding banning P2E games from age and listing restrictions. An official said on Tuesday:
“P2E games are wise not to be allowed to receive age ratings under current law because in-game cash rewards can be considered prizes.”
Prizes received from games in South Korea cannot exceed 10,000 KRW (8.42 USD) at a time.
Related: The cNFT protocol benefits NFT and transforms the gaming industry for profit as a whole.
Fivestars for Klaytn P2E and NFT Marketplace were initially banned from local app stores due to a lack of ratings, but in June, the team behind the game won an injunction and the game was listed. The final decision on the game’s legal status is expected to set a legal precedent for other P2E games such as Infinite Breakthrough Three Kingdoms Reverse.
David Sheen, head of global adoption at Klaytn, told Cointelegraph why he thinks regulators have taken a hard line on P2E games:
“Money making games and cryptocurrency in general are worrisome due to market foam caused by speculative activities. But once the foam subsides, governments around the world may be more receptive to regulating the Web 3.0 as a permanent feature, the digital economy.”
GMC’s position has negative implications for all P2E game applications, including a host of applications related to two of today’s most popular games according to DappRadar: Axie Infinity and Splinterlands.