South Korea Is Going Into Metaverse: A $187M Investment In A National Digital World

On February 27, 2022, the Korean Ministry of ICT, Science, and Future Planning announced pledging 223.7 billion KRW (approximately $186.7 million) to their native . As the country's representatives notice, this move should promote the development of digital technologies there, and it will become a part of the movement called the "Digital New Deal

According to the Ministry's statement, this investment will be spread into 4 parts to achieve several primary goals, and all of them will help South Korea create the Expanded Virtual World. Since VR and AR gadgets are required for entering this reality, these plans also include the support of companies in this niche. 

As the government plans, an advanced metaverse will help strengthen the growth of urban infrastructure, education, and media. Such technologies will be strengthened thanks to content creators for whom a developer contest and a hackathon will be conducted.

Changes For Ordinary People

Such improvements are going to help not only those whose jobs are directly related to technologies but also regular citizens. According to the Korean government, services for dealing with civil complaints will be provided inside the metaverse by 2023. The only thing needed is a VR headset.

Experts agree with this step towards digitalization in South Korea. As Hashed CEO Simon Kim notices, it will boost commercial expansion by providing financial support for participants. Jason Ye, a co-founder of multichain ecosystem accelerator DeSpread, also noticed that it would be easier for tech companies concentrating on metaverse projects to cooperate with the government.

Previous Steps

Even though this investment is a monumental move towards a national metaverse, it's not the first step made by the Korean government.

Metaverse 120 Center

In November 2021, the Seoul Metropolitan Government pointed out that the capital would become the first city to get into the metaverse, and it's called "Metaverse 120 Center". This happened after the two biggest Korean retailers announced entering the metaverse.

The Seoul government plans to implement such technologies for easing virtual communications for municipal administrations around the city. It's going to advance all significant factors, such as education, culture, tourism, and economy. One of the first steps towards achieving this goal will be the move of the Seoul Lantern Festival to the digital universe.

New Workplaces

In January 2022, the country also announced that it would become the 5th metaverse market by 2026. It's going to cooperate with approximately 200 leading companies in this niche. According to the government, if everything is right, working on such technologies will create about 1,5 million jobs in the digital world. 

What's more, the government's plans include building an online Korean language institute inside the metaverse. It'll become international, letting users around the world learn about K-pop, culture, medicine, and arts. All this should make the country the fifth-largest metaverse market by 2026.

Potential Difficulties 

Although South Korea is quite ambitious about creating a national metaverse, some shortcomings still must be considered.

• Ban on NFT games. The primary concern is that the country's regulators have banned NFT-applied games, saying that playing them can lead to gambling addiction. The reason is that games, like MIR4, make users keep playing, as this way they earn more for buying in-game equipment, outfits, weapons.However, non-fungible tokens and metaverse projects go hand in hand, and together they can bring users a better experience than a standalone metaverse.
• Taxation of NFT. Another concern is that, in November 2021, South Korea’s Financial Services Commission announced that NFTs would be taxed from 2022. This requirement includes a 20% tax on all incomes from virtual assets that are at least 2,5 million KRW (about $2,086).
• User privacy in the metaverse. One more shortcoming is related to users' privacy, and it concerns not only the national Korean metaverse but also the whole industry. Even though the first projects based on these were launched only in Autumn 2021, such ecosystems have already proven to be toxic for kids and female users. The reason for multiple harassment cases is that virtual reality hasn't been regulated yet. As Sarah Gardner, the vice president of external affairs at Thorn points out, it's especially negative for children, as there's no one to protect them. Since this metaverse is going to be helpful not only as recreation but also to solve citizens' issues, the government should consider this problem to avoid negative consequences for their nationals.

South Korea Isn't The Only One

South Korea isn't the first Asian country to be interested in the metaverse topic.

• On December 27, 2021, a Chinese company, , launched its virtual world in the app. A conference with approximately 100 speakers became the fest event inside it, but as the developers promise, about 100 thousand users can be there at the same time. Getting more advanced, this metaverse will become a platform for everything from education to entertainment and commercials.
• Alibaba Group, the corporation that owns AliExpress, may become the primary Baidu competitor in China. On December 6, 2021, it registered the company Yuanjing Shengsheng aimed at metaverse development.
• Furthermore, filed over 100 trademark registrations for its gaming metaverses. In November 2021, it pledged Beijing's support, subject to Chinese law. Tencent is now one of the giants of the gaming industry and owns 100% of Riot Games and 40% of Epic Games, the creators of Fortnite. The company is also working on a Chinese version of the Roblox metaverse with the developers of the Western version.

Such tremendous competition between tech giants can lead to the fact that China's metaverse market reaches 52 trillion CNY (about $8 trillion). Experts say that Alibaba Group and Baidu aren't the only companies here. This list also includes Tencent, NetEase, and ByteDance.

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