Nexon Summary | How will Web3 MapleStory Universe leverage UGC and modules to enhance player gaming experience?

The developer of the MMORPG online game MapleStory, Nexon, announced this year that it will create a Web3 version of the game called MapleStory Universe, sparking market discussions. According to the blockchain data platform Xangle, integrating blockchain into the game can enhance the reward experience and once again lead Nexon to innovate in the gaming industry.

This year, game developer Nexon announced that it will use its biggest IP, MapleStory, to develop a large-scale blockchain game called "MapleStory Universe." What potential of Web3 Game did the Nexon team see that would lead the development of the gaming industry?

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Nexon's Thirty-Year Strategic Growth

Nexon Innovative Position

In the 1990s, Nexon revolutionized online gaming with South Korea's first online game, "The Kingdom of the Winds." Additionally, Nexon's innovative Free to Play model introduced in 2000 has evolved into the foundation of today's online game revenue models. Nexon also acquired South Korea's largest game IPs, "MapleStory" and "Dungeon & Fighter." These achievements have solidified Nexon's leading position in the industry.

Since its establishment in 1994, Nexon has overcome numerous challenges and continued to achieve remarkable growth. Over the past decade, Nexon has achieved a compound annual growth rate of 12.5%, with annual revenue increasing from $1.3 billion in 2012 to $2.4 billion in 2022, valued at approximately $18.4 billion.

As of 2022, 60% of Nexon's revenue comes from South Korea, 24% from China, 3% from Japan, 6% from North America and Europe, and 7% from other regions. In South Korea, "MapleStory" has been a key driver of growth.

In recent years, mobile games have also driven Nexon's revenue growth, accounting for approximately 31% of total revenue. Nexon's conservative approach to entering the mobile game market during the mobile game boom in 2013 has resulted in significant growth, underscoring its noteworthy performance.

IP Acquisition Strategy

In 2004, Nexon invested its entire cash reserves at the time, approximately $34 million, to acquire "MapleStory" from Wizet. This gamble paid off handsomely, as "MapleStory" alone generated over $5 billion in revenue and continued to set new revenue records in the South Korean gaming industry. Similarly, Nexon acquired the Chinese rights to "Dungeon & Fighter" for around $240 million in 2008, gaining immense popularity in the region, with cumulative revenue exceeding $22 billion by 2022.

Nexon owns several key IPs that serve as cash cows. Even after 20 years since its launch, "MapleStory" remains Nexon's flagship title, while "KartRider" and "Dungeon & Fighter" continue to thrive.

Creating Authentic Scenarios to Attract Users

Nexon's stable growth can be attributed to its understanding of the community. Nexon views its community as the cornerstone of its IP and network effects, providing games as a service to the community. In addition to integrating user feedback and creating new in-game content, Nexon hosts key update briefings, establishes IP merchandise pop-up stores, and organizes game BGM concerts, demonstrating precise marketing to users while creating scenarios, which has become one of Nexon's keys to longevity.

Well-Designed Game Economic Systems

Another key success factor for Nexon is the well-designed Reward Experience (RX) system. Nexon effectively manages the utility and rarity of in-game items to provide a rewarding gameplay experience, allowing players to enjoy challenges and rewards, leading to their enjoyment.

The essence of "MapleStory": Reward Experience = Enjoyment of Winning Items

"MapleStory" leverages mechanisms that create continuous Reward Experiences by expanding the use and rarity of in-game items. Over the past twenty years, Nexon has had hundreds of developers continuously produce content, updating various professions, bosses and monsters, maps and regions, expanding the world of item use, enhancing the value of game items. On the other hand, Nexon skillfully manages item drop rates and enhancement systems, creating a well-designed rarity and economic system.

Market Development Strategy: Think Big, Start Small

Lastly, Nexon's new game development strategy leads the market with large-scale projects while experimenting with innovation through smaller projects, establishing a diversified growth pipeline to sustain continuous growth for the company. From Q4 2023 to Q4 2024 alone, Nexon's product lineup includes games such as "The Finals," "ARC Raiders," "Warhaven," "Dungeon Fighter Mobile," and "Mabinogi Mobile," with "The Finals" being the most anticipated game next year, with 7.5 million users participating in the beta test.

Nexon's Sustainable Growth Under Scrutiny

Despite substantial growth in the past, Nexon faces many challenges, particularly in terms of sustainability. Nexon must ensure the sustainability of its growth over the next 30 years, overcoming inherent structural challenges in the traditional gaming industry.

The challenge of sustainable development stems from the structural limitations of the existing gaming business model.

Content Development Ceiling

Diversity of content will reach a ceiling. Despite developers' efforts to add new content, the pace of content creation will struggle to keep up with consumer demand. Even the most capable and resourceful companies are limited by their own development capabilities, while player consumption of content surpasses the control range of game developers.

This phenomenon is particularly evident in South Korea, where a player completed the main storyline of "Diablo III" server within six hours of its release, while the game developer Blizzard Entertainment claimed it would take about six months to complete.

Limitations in Community Engagement

The gaming industry faces a second challenge in the limitations of community engagement. The community is a crucial factor in determining a game's fate, and while Nexon is known for its deep understanding of community dynamics, how to interact more deeply with players is a challenge shared by all game developers.

The structural constraints of the traditional gaming industry reduce the possibility for game developers to officially encourage community activities. Since game IPs are owned by companies, users do not have real power over them, and such activities always carry the risk of copyright infringement.

Furthermore, the traditional gaming structure lacks the ability to build membership and brand loyalty, failing to cultivate loyalty and connections with users through services.

Underwhelming Response to New Game Markets

Previously, Nexon launched another platform game based on the "MapleStory" IP in 2022 — MapleStory World, similar to Roblox, where individuals could use "MapleStory" and related IP to create and share in-game content, with content creators being able to earn a portion of the revenue. However, MapleStory World did not gain enough traction, with only 800 daily active users as of February this year.

Another sequel to "MapleStory" — "MapleStory 2" — is also expected to shut down next year due to underperformance in business results.

MapleStory Universe

Given the challenges faced by the gaming industry, Nexon has turned to Web3 for potential solutions. Nexon has decided to adopt blockchain technology and Web3 concepts to address these issues and ensure the sustainability of its games and the company.

Nexon's first blockchain project is MapleStory Universe. With over 180 million users and 5 trillion KRW in revenue, "MapleStory" has become Nexon's flagship IP, making a foray into the Web3 space with its most critical IP, showcasing the company's expectations for blockchain potential.

What is MapleStory Universe

MapleStory Universe consists of four main components to realize the system:

• MapleStory N: An MMORPG based on original IP, which will be the main gameplay content for users at the game's initial release. It is expected that its role and contribution will gradually diminish with the increase in user-generated content (UGC) and module MOD quantities.
• MapleStory N Mobile: The mobile version of MapleStory N.
• MapleStory N Worlds: A blockchain-based UGC platform that provides a user-friendly interface for users to easily create in-game content NFTs, DApps, and make them easy for other players to search and play. However, due to limitations in the tools provided and development freedom, its practicality is relatively lower than SDK.
• MapleStory N SDK: A developer toolkit provided at the API level, creating more original in-game content.

Core Concept of MapleStory Universe

Nexon believes the key elements for a game's long-term sustainable development are:

• Continuous content production
• Control of item inflation
• Encouraging intrinsic ecosystem creation
• Forming a derivative ecosystem

MapleStory Universe's efforts are all aimed at enhancing players' "Reward Experience" during gameplay, specifically by using the following methods to achieve this goal.

Open IP and Development Tools to Drive UGC

MapleStory Universe aims to enhance the capabilities of ecosystem participants by granting user rights and providing rewards, fostering the creation of user-generated content (UGC) and third-party module MODs. It aims to cultivate a community-centered, voluntary creative ecosystem, ultimately aiming to establish an ecosystem co-created with the community, breaking free from the one-sided content provision by game companies, similar to the third-party map, module, and command pack ecosystem of Minecraft.

In MapleStory Universe, users play dual roles as content consumers and creators, strengthening engagement. From this perspective, Nexon's goal is to transcend the identity of traditional game companies and transform into a content distributor.

The UGC mechanism can enhance content diversity and richness, giving players' equipment and game items more uses, ultimately improving the users' Reward Experience.

MapleStory Universe aims to maximize user Reward Experience through UGC and MODs, ensuring game sustainability.

MapleStory Universe will be the Web3 iteration of MapleStory Worlds, providing a more grounded mechanism by integrating blockchain technology, offering greater freedom in creation, sustainability, and scalability. Eliminating concerns of user copyright infringement and having a more transparent profit-sharing mechanism, it will be fundamentally different from traditional games based on UGC, where only a fraction of revenue benefits creators.

However, if Nexon relies solely on external creators without offering initial content, the ecosystem will not be established. Therefore, Nexon plans to first launch the base game MapleStory N to ensure users can enjoy sufficient content.

Enhancing Information Transparency

MapleStory Universe uses blockchain to issue and manage items, providing transparent access mechanisms for item reward data through tokens and NFTs, allowing users to instantly observe various on-chain data, including in-game transaction details, item distribution statistics, and specific author income distribution.

In this process, Nexon not only fosters trust with users, helping build game brand loyalty, but also anticipates the emergence of many third-party forums, data analysis tools, and information websites centered around on-chain game data.

Derivative Economic Ecosystem

Popular games often generate ecosystems beyond the official ones, including forums where players share gaming experiences, strategies, and information, as well as various information websites created through open APIs. For users, these elements are indispensable parts of the gaming experience.

However, the nature of the traditional gaming industry conflicts with the aforementioned derivative ecosystems. For example, items in MapleStory cannot expand beyond the game's ecosystem, limiting the Reward Experience of MapleStory within the official game.

The emergence of NFTs and blockchain facilitates previously impossible "on-chain" data transfers. Users can own items through the blockchain network and view information. MapleStory Universe uses blockchain technology to allow users to bring in-game assets outside the game and circulate them in all third-party ecosystems, thereby creating a shared economy. This structure significantly increases game use cases and generates advantages, where an item can now easily have multiple uses without waiting for the official team to develop content, expected to significantly enhance the Reward Experience, attracting users to continue joining and participating.

MapleStory Universe fundamentally maintains the same appearance, feel, and gameplay as the existing MapleStory. However, the difference lies in allowing users and creators to use MapleStory's IP to create in-game content, including items and DApps, and earn rewards based on the revenue generated by the content.

However, a shared economy structure can make it easy for heavy gamers with a large number of high-value items to freely control the ecosystem, potentially excluding new player space, turning the game into one centered around veteran players. Therefore, balance remains crucial, especially in Web3.

Limited NFTs Controlling the Economic System

Online games face the challenge of infinite item generation, and factors such as dynamic changes in player groups and evolving game styles make it harder to control the economy:

• Dynamic changes in player groups
• Evolving game styles over time

Predicting or even controlling the item economic model is almost impossible, and controlling item rarity is very challenging. Traditional game systems struggle to address currency inflation issues, and MapleStory is no exception.

To address this issue, Nexon chooses to implement a mechanism using NFTs to limit item production. Future items in MapleStory Universe will have a total upper limit across the entire server.

For example, if the total server limit for item A is 100, and the system sets a weekly acquisition limit of two, then whether two or one hundred players defeat monsters, only two item A will drop that week. If no one defeats monsters that week, the reward will accumulate, offering players who defeat monsters the following week a chance to acquire four item A. After 50 weeks, all 100 item A will be produced, and users can only obtain item A through trading or as rewards from other players who create in-game content as part of the rewards.

By strictly limiting item quantities through a limited mechanism, the user experience will undergo significant transformation compared to traditional games. Players will compete for popular items, possibly devising novel strategies to