Telecommunications companies metaverse business at risk

South Korean telecommunications company KT Corp. pulled the plug on its business-to-business (B2B) metaverse product service around a year and a half after its launch. This was allegedly due to challenges in securing clients, as the countrys three major mobile carriers also see their overall metaverse services dwindle as user growth declines.

According to sources from the telecommunications industry on Wednesday, KT was confirmed to have terminated its own metaverse service, MetaLounge, at the end of April 2024.

MetaLounge was a B2B metaverse product launched by KT in December 2022 that produced and provided customized metaverse platforms for corporations, local governments, and institutions. KT had made efforts to secure references before the products launch by signing business agreements with the Global Youth Climate Challenge (GYCC) under the Presidential Commission on Carbon Neutrality and Green Growth within MetaLounge.

But it is believed that KT eventually terminated the service due to lack of visible success in acquiring clients.

KT plans to continue operating Genieverse, a metaverse for business-to-consumer (B2C) transactions. Genieverse, which has yet to be activated as it has fewer than 10,000 downloads on Android, is said to focus on differentiated services that integrate generative AI centered around the AI metaverse platform for B2C.

As the metaverse craze cools down amid an A.I. boom, major services have been shutting down their telecom metaverse services one by one since 2023.

Cyworlds Cytown, Com2uSs Com2Verse, and Kakaos Colorverse, have all shut down their metaverse businesses.

SK telecom Co. and LG Uplus Corp. are also struggling to keep their metaverse services afloat. LG Uplus operates Meta Slap, a B2B product similar to KTs MetaLounge, along with a university-exclusive metaverse platform called UVERSE, and a childrens version called KidsTopia.

Meta Slap, which was first introduced in June 2023, underwent beta testing for a month that targeted various companies, including large corporations and startups, but has yet to be officially released. LG Uplus is preparing for the launch based on insights obtained through beta testing, but the exact timing has not been decided yet.

UVERSE, on the other hand, has built metaverse campuses for about 10 universities, including Yonsei University, since opening in July 2023, but there have been no new customers after Yonsei University in 2024 to date.

UVERSE is discussing new business ideas with existing contracted universities as well as orders with several new universities, a company official said.

[Graphics by Song Ji-yoon and Lee Eun-joo]

SK telecom operates the B2C metaverse platform, ifland, globally. Although the platform maintained a steady monthly active user base of 3 to 4 million in 2023, it saw a decrease of about 600,000 MAUs in the fourth quarter of the same year. Iflands MAU was 3.9 million in the first quarter of 2023, which grew to 4.2 million in the second and third quarters but fell for the first time in the fourth quarter to 3.61 million.

Telecom companies are looking to create platform growth momentum by adding generative AI functions and other options to existing metaverse services. SK telecom announced that it will introduce features such as AI personas by combining generative AI into ifland. For its part, KT said that it will introduce differentiated services using generative AI.

Global market expansion is also a keyword. SK telecom is aggressively targeting the Southeast Asian market, while LG Uplus is expanding its business to North America and other regions via KidsTopia.

[ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]