South Korean Gaming Companies Cool Metaverse Ambitions with Layoffs

Quick take:

Com2Us has reportedly laid off staff in its Com2verse metaverse platform.

Kakao Gaming’s metaverse unit Colorverse also downsized staff earlier this year without disclosing the details.

Chinese tech giant Tencent also dissolved its XR unit earlier this year.

Korean tech giant Kakao has joined the list of companies downsizing their metaverse operations. The company’s gaming unit, Kakao Gaming reportedly laid off staff in its metaverse platform Colourverse earlier this year without disclosing any details. 

This comes at a time when some of Asia’s biggest companies including Chinese entertainment giant Tencent have been scaling down their metaverse operations. 

Tencent disbanded its metaverse division which focused on Extended Reality (XR) amid profitability concerns, while in the US, Microsoft did the same with its industrial metaverse division to focus on projects that are likely to begin generating income in the short term.

The smaller mainstream players have also started laying off staff after incurring losses, with Com2Us the latest to join the list, Forkast News reported.

The gaming company’s metaverse unit Com2Verse recorded an operating loss of $6.2 million in the first half of 2023. The mobile game developer had recorded a revenue of $536 million last year.

Com2Us has been active in the web3 and metaverse space over the past 12 months. In August 2022, the company teamed up with Firefly and the Animoca Brands’ metaverse subsidiary The Sandbox to launch MetaWorld Entertainment with the aim of hosting live concerts and web3 gaming experiences in 2023.

In December, Com2Us’ venture arm CRIT Ventures co-led web3 intellectual property management and monetisation platform Spaceport Protocol’s $3.6 million.

Although some of the mainstream tech companies in Asia have been scaling down their metaverse ambitions, the government has been actively rolling out incentives for those looking to offer metaverse-related products.

In China, Shanghai, Beijing and Nanjing have all laid out ambitious metaverse plans with plans to spend billions of US dollars in the next five years. In Korea, Kakao was awarded a government contract to develop a metaverse healthcare platform.

In October last year, Korea’s Industrial province Busan City signed a memorandum of understanding (MoU) with EOS Network to invest 100 million in Web3 companies.

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