Chyung Eun-ju

Recently, the excitement surrounding the metaverse has waned. A few contributing factors we can see being attributed to this diminishing interest are Meta's slow advancements in the field, the downturn of non-fungible tokens and Apple's promotion of the term "spatial computing" to supplant the concepts of the metaverse, virtual reality and extended reality.

Despite K-pop's foray into the metaverse, it faced hurdles, as evident in the decrease of the users of the metaverse platform ifland from 3 to 4 million to 600,000 in the fourth quarter of last year. Kakao Games' metaverse business subsidiary, Colorverse, closed down, and Nexon's metaverse platform, Nexon Town, introduced in 2022, remains largely inactive and abandoned.

Joel Cho

Amid the current market landscape, the rise of tokens such as Render (closely tied to Nvidia) and Ethereum indicates a future where tokenized assets will play a bigger and more significant role in investment portfolios. Particularly with the expected approval of BlackRock's Ethereum ETF, the positive market response to tokens is increasing the relevance of digital assets. Thus, despite the hype surrounding the metaverse dying down, the resurgence of digital currency hints at a potential revival in the metaverse's trajectory.

In the metaverse landscape, the resurgence of this digital field lies in the strategic maneuvers of the Korean entertainment sector. Korean industry leaders, recognizing the transformative potential of the metaverse, are spearheading initiatives to breathe new life into the metaverse narrative.

The Korean entertainment industry has been looking into the possibilities of the metaverse by creating virtual K-pop stars. Kakao Entertainment worked with the gaming company Netmarble to develop a group called Mave, consisting of four virtual members, and Pulse9, an AI company, created a group called Eternity through deepfake and motion capture technology.

Zepeto, an emerging player in the metaverse market for the music and entertainment industry, provides a versatile platform that can host a multitude of user-generated and branded experiences. Earlier this year, it unveiled a virtual world tailored for the K-pop girl group aespa, with the startup Verses.

It is important to note that Zepeto has garnered the interest of notable entertainment industry giants, such as JYP Entertainment and YG Entertainment. The collaboration with aespa offers users a dedicated space for each member of the K-pop group, with features and opportunities that allow fans to engage with the stars and serve as another merchandising platform.

On another note, SK Telecom, which unveiled ifland in 2021 and positioned it as a pioneering social media platform at the peak of the metaverse boom, remains unwavering in its commitment to the platform despite the diminishing global enthusiasm for the metaverse market.

Most recently, we saw the debut of the girl group Triple iz, a K-pop group whose origin is a true testament to the relationship between K-pop consumers and virtual communities such as ifland. The group, formed through user engagement within ifland, represents the convergence of entertainment and digital innovation.

Galaxy Corporation, an AI metaverse company, and its subsidiary Personaspace have collectively secured investments totaling approximately 70 billion won ($50.8 million) from various institutions and companies, including Shinhan Bank, Hanwha Life Insurance, Daeshin Securities, T Investment, Korea Investment Partners and Naver Jet.

Their corporate value was estimated at around 500 billion won as of the first half of 2023.

G-Dragon, who is associated with Galaxy Corporation, appeared with the company CEO at CES 2024, the world's largest technology trade show held in Las Vegas in January, and hinted at a metaverse concert performance at the Sphere, the city's iconic multipurpose venue.

As the metaverse evolves from a buzzword to a tangible digital ecosystem, all these market trends point to the idea that the Korean entertainment industry stands at the forefront of this paradigm shift. By leveraging its cultural influence and technological prowess, Korean companies seem determined to reinvigorate interest in the metaverse, shaping the future of digital entertainment and social interaction.

Andrew Wallenstein, president and chief media analyst of Variety Intelligence Platform, noted that U.S. media companies have only engaged in limited experimentation with the metaverse compared to their Korean counterparts. In a New York Times article published on Jan. 29, 2023, Wallenstein pointed out that countries like South Korea are frequently considered experimental grounds for future trends. He suggested that South Korea would be the most likely origin point if any trend were to migrate from overseas to the United States.

Chyung Eun-ju (ejchyung@snu.ac.kr) is a marketing analyst at Career Step. She received a bachelor's degree in business from Seoul National University and a master's in marketing from Seoul National University. Joel Cho (joelywcho@gmail.com) is a lawyer specializing in intellectual property and digital laws.