South Korea’s leading internet company, Kakao, and the prominent game developer, Com2uS, have reportedly downsized their metaverse teams due to substantial financial setbacks during the first half of 2023. While specific details regarding the staff reductions have not been disclosed, this move comes as both companies grapple with challenging fiscal conditions.
Com2uS, a company that amassed $536 million in revenue in the previous year, underwent a restructuring of its metaverse division. This decision follows the launch of its metaverse platform, Com2Verse, in August, which unfortunately reported an operating loss of approximately $6.2 million in the initial half of this year. Likewise, Colorverse, a South Korean metaverse entity owned by Kakao Games and Neptune, experienced losses of $8.6 million in 2022 and carried out a round of layoffs earlier in the current year.
The scaling down of these South Korean metaverse teams follows the recent closure of CyTown, a virtual platform that aspired to revive the once-popular social media service, Cyworld. Despite its best efforts, CyTown struggled to attract users and garnered only around 10,000 downloads on Google Play. These developments underscore the formidable challenges that metaverse platforms face in achieving widespread adoption.
A survey conducted by the Korea Information Society Development Institute revealed that only 4.2% of South Korean citizens regularly engage with metaverse services. Notably, the survey’s definition of a “metaverse” platform encompassed popular games such as Minecraft, Roblox, and Animal Crossing. This suggests that the concept of the metaverse may not yet be widely comprehended or embraced by the general public in South Korea.
In stark contrast, Japan has taken proactive measures to bolster its metaverse infrastructure. In February, ten prominent Japanese companies, including Fujitsu, Mitsubishi, and Sumitomo Mitsui, established the Japan Metaverse Economic Zone working group. However, there have been no recent updates regarding the progress of this initiative.
Meanwhile, China’s Ministry of Industry and Information Technology has expressed its intent to establish regulatory standards for the metaverse, aiming to position itself as a global leader in the sector.
As of now, both Kakao and Com2uS have refrained from responding to inquiries regarding the downsizing of their metaverse teams. The industry awaits further developments as these companies navigate the evolving landscape of the metaverse.
