Last Apr. 12, WeMade hosted its Q2 2023 preview media call. The event was organized to review WeMade's first quarter and explain the major projects planned for the second quarter. CEO Henry Chang took part in the press conference and answered questions about the company's upcoming MMORPG, Night Crows, as well as the direction of the WeMix business, sales, and the status of its entry into China.
WeMix was recently relisted on Coinone. Are you planning to get listed on other major domestic exchanges?
As we said before, we have applied for listing on major domestic exchanges. However, we don't know when it will be listed. It is the responsibility of the exchanges and they do not share their listing schedule or cooperate with us in this regard. Accordingly, we don't have a detailed timeline for that.
What are your goals for 'Night Crows' and how do you expect it to perform?
There have been several new MMORPG games released in the past few months, and their performance has been generally good. Subjectively, I'm confident that 'Night Crows' is of better quality in many ways compared to those games, so I think we can achieve more than that. If you ask me objectively, I think Night Crows can aim for the number one spot in the Korean market.
Recently, there have been an increasing number of cases of foreign licenses issued to domestic game companies. What do you think about this? Also, what are your thoughts on the situation in China?
It is as you see. They started issuing licenses again starting last year. Before that, they restricted the issuance of licenses for almost all games, not just Korean games, but now Korean games are getting foreign licenses, and the atmosphere is getting better.
The reason for this is that China, like other countries, is in a situation where it needs to revive its economy, so the policy has changed to foster the growth and potential of games rather than suppress them. As a result, the issuance of licenses has resumed. We are also preparing to move our games into China, so I hope we can talk about it soon.
You recently got involved in a lawsuit from Lansha. What is WeMade's response to this? Any future guidance?
There’s calumny for criminal cases, but anyone can start a civil case. The lawsuit was filed in 2021, claiming that we violated their rights by licensing to another company in China. However, the matter has already been settled by the Singapore Arbitration Court, so we don't see much point in it. We are preparing to respond. As we have already filed and won dozens of similar lawsuits in China, we will follow the protocol.
10 million WeMix were hacked on GDAC. Were they WeMix foundation’s or the customer’s?
First of all, I would like to clarify the expression. It is correct to say that it was an exchange hack, not a WeMix hack. The exchange was hacked, and the exchange had WeMix -- and there was a lot. The foundation supply is stored in the foundation wallet and the address is public, so anyone can see it. There's a 0% chance that the exchanges have any of it. The foundation supply cannot go to an exchange. The bottom line is that everything that was hacked was customer volume.
You said that you buy WeMix with Chairman Park Kwan-ho every month. It looks rather like purchasing your own stocks, and it can be viewed as investing in securities. What do you think about this viewpoint?
I know that the issue of securities in coins is still being discussed in Korea and the United States. Based on Singapore, where WeMix is issued, WeMix is classified as a 'utility coin' and is therefore not a security. Therefore, the purchase by me and Chairman Park Kwan-ho does not make it a security.
As you are promoting various projects to strengthen the WeMix ecosystem, including 'Night Crows' marketing, costs will continue to increase. When do you expect to get in the red?
Basically, marketing expenses are one-time expenses. On the other hand, once a game is on track, it generates revenue continuously, so it's rarely the case that marketing can't break even or isn't profitable. Once a game starts making money, it's not that hard to turn a profit if it's performing well. Especially in MMORPGs, most of the marketing costs are spent before launch. It's not just us, but every other company focuses on marketing before launch to attract the attention of core users, so I don't expect marketing costs to increase after launch.
Other domestic exchanges are skeptical about listing. What measures are you preparing internally to increase the value of WeMix?
We are working to revitalize trading. For that, we are focusing on the essential efforts of launching various services, games, and platforms. We are also trying to find good investors for the project to be successful. However, as for the exchange listing, please understand that we cannot say how far along we are or when it will happen.
Recently, ArcheAge War has been in the news due to a lawsuit, and Night Crows is basically a Lineage-like game, so there may be issues.
It’s difficult to comment on specific legal disputes. However, I think we are probably the most experienced in the world when it comes to copyright dispute litigation. In that sense, generally speaking, copyright should be protected. Copyright is the result of the company’s hard work. But I don't think that's going to be an issue with Night Crows. It doesn’t seem that they filed for the lawsuit for the similarity of genre characteristics and grammar. All MMORPGs should get sued then. In that regard, I don’t think Night Crows will be evaluated as a copy game.
It’s still Lineage-like, so you won’t be able to avoid being called similar. What’s unique about Night Crows?
User perceived similarity and legal copyright issues are not the same thing. I think you're asking how it's different from a user's perspective. There are three main differences that I see as a user. The first is quality. Not just the graphics, but the overall quality of the game itself is very high and not comparable to previous games. The second is gliders. Mir4 had airwalking, but they were limited in many ways.
However, in Night Crows, gliders are a strategic element that intervenes in combat. The third is that we followed the existing MMORPG grammar, but upgraded it. By creating an instance dungeon called the battleground, we made it fun and interesting to compete in it and dig for resources. We also upgraded the existing MMORPG grammar by one or two steps, such as supporting one-on-one trade in the exchange.
Mir4 had global success with the addition of tokenomics. It seems Night Crows will also have P2E elements when it is released globally. How well do you think it’ll fare?
If you look at the case of Mir4 and MirM, I think it can achieve more than 10 times the performance in Korea. It is still too early to say when we will launch globally, but we are considering launching within the year.
WeMade invested about 130B KRW (98M USD) last year, which was the largest investment in the last five years. Can you tell us if the investment was more focused on games or coins, and what the scale of investment will be this year?
I don't remember all the specific financial statement items, but last year we invested a lot in both games and blockchain. In particular, the acquisition of SundayToz (WeMadePlay), which is the foundation of blockchain games, increased the scale of investment. In conclusion, we invested in both games and blockchain.
This year, we will be investing at a higher standard than last year. It's more important to roll up the games we've made so far, so I think the investment scale will be lower than last year. However, investment is not only about the investor, but also about the recipient, so I don't know what will happen. Even though I said that the scale of investment will be lower, I still have the same attitude of actively investing when I see a very good investment.
You have previously advocated for the relaxation and overhaul of regulations for P2E games. In that sense, how do you think the basic concept of meandering should be changed, and in what ways do you think domestic regulations should be improved?
I'm not a legal expert, so I could be wrong about the specifics. But my understanding is that there are laws against meandering. There are three main types of speculation. They are betting, luck, and monetization. This is an “and” condition. If you place a bet and it is determined by luck and you can return the money, it is a meander.
However, when it comes to criminal law, this is “or”. If you bet or it is determined by luck, or you get money in return, it is a meander. It's weird, isn't it? It's more in the game law than the regulations that define meandering. I don't know if I can say this, but I think it's a legislative mistake. I don't know if I can say this, but I think it was a legislative mistake. I think they put it in without thinking about it enough because they thought they had to prevent everything back when Sea Story (Electric slots) was an issue. They had to prevent anything that made money from games. So the standard of the game law is much higher than the legal regulations for meandering. I think this needs to be changed now.
Of course, there is no question that if games that are determined by betting and luck are gambling, it’s meandering. However, I think we should stipulate that games that are not, are not gambling, and allow them while putting restrictions on how to deal with the side effects, like limiting minors from playing. In conclusion, the fundamentals of the law are wrong, which is the biggest problem with the current gaming law.
How are the current number of users and revenue of blockchain games in service?
The number of users is publicly available on our website, so you can check it in real time. As for revenue, even we don't have a specific number. We are a platform and the games are from different companies, so we don't know everything. I can't answer that question, but I think December last year was the lowest point and now it's a period of overall increase.
With the recent decision to delist Paycoin, do you still consider Upbit and exchanges to be more powerful? How do you view the current market landscape?
A senior official once told me that most assets and digital currencies should be viewed as a transnational phenomenon. It's a basic but very important perspective. I'm not trying to make excuses, but I hope you can see that when I called them super-powerful at the time, it was just an expression of being discontent.
In that sense, I said that exchanges and we have a symbiotic relationship, because in order for digital currency to be institutionalized and used, both exchanges and digital currency need to coexist and develop. So last year, I used such an expression because something unfortunate happened, but now we see it as a situation that has been resolved.
How many people pre-registered for Night Crows?
It surpassed 1M early last week, and it’s currently over 1.6M now.