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Nexon buys Korbit for its blockchain technology

Gaming giant Nexon said it decided to buy a local bitcoin exchange due to the potential of blockchain technology, the same technology that underpins bitcoins.

Nexon agreed to acquire a 65.19 percent stake of Korbit, the country’s third largest bitcoin exchange by transactions, for 91.3 billion won ($80 million), the company’s holding company NXC announced late Tuesday.

Questions were quickly asked whether the gaming giant wanted to enter the cryptocurrency business, which Nexon denied.

“It is more about investment opportunities,” a source at Nexon said. “The digital currency is a promising industry segment especially when we consider the potential surrounding blockchain technology,” the source said.

Blockchain technology promises safer, harder to track and tamper-proof transactions over existing systems.

A blockchain-based system works on a shared digital ledger of transaction data on a network of computers to ensure security and preserve transaction records more accurately while facilitating transfers at a faster rate.

The country’s largest game developer has been investing a lot.

In 2013, the company took over Stokke, a Norwegian baby stroller company, and BrickLink, an e-commerce site that buys and sells Lego parts. In 2015, it made a 100 billion won investment in WeMakePrice, a mobile shopping platform.

Industry insiders say the deployment of blockchain technology and cryptocurrencies is possible in a future business model.

“Currently, Nexon manages separate servers to back different games,” said a source from the bitcoin industry. “But if they embrace blockchain technology across their games, they would have an integrated server system that can manage their game products more efficiently.”

The source also raised the possibility that Nexon could develop virtual cyber money that can be used across different Nexon’s portfolios.

“In the short term, I heard that Nexon is positive about Korbit’s profitability and a large pool of technology experts,” the source said.

Founded in 2013, Korbit is the oldest bitcoin exchange in Korea, with the third most transactions after Bithumb and Coinone.

BY PARK EUN-JEE, CHOI HYUNG-JO [park.eunjee@joongang.co.kr]