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ΑρχικήEnglish EditionWas the metaverse not enough to save Cyworld 2.0?

Was the metaverse not enough to save Cyworld 2.0?


By Erika Koutroumpa,

Social networking websites have been around since the late nineties, however very few of them have managed to stand the test of time. The likes of MySpace and MSN messenger have played a formative part in the adolescence and early adulthood of many millennials but now they have faded into oblivion. One of these was Cyworld, the biggest social media in Korea until the late 00’s which recently tried to revive its fame but ended up being abandoned once again. Why did it not manage to be as successful as before?

Cyworld was a microblogging application which was initially created as the graduation project of a KAIST student in 1999. Its target group consisted mostly of people in their teens or in their 20s who wanted to create virtual friendships in chatrooms and online networks. Users had their mini homepages, where they could decorate their virtual room as they wished, adding background music and customizing their characters using the online currency of the game called acorns- or dotori in Korean. During its heyday, Cyworld boasted 32 million users, with an estimated 13 out of every 20 South Koreans having an account at the time.

Admittedly, it had many original features. Its main selling point against its rivals at the time was that it focused on the individual rather than community homepages. The format was also revolutionary at the time, as it can be considered as a proto-metaverse and through the dotori system, the application introduced millions of its audience to cyber-currency, one of the main trends in our days.

However, the app lost popularity just as quickly as it managed to gain it. One of the factors that contributed to Cyworld’s initial success was that it catered to the needs of its indigenous market to the highest degree possible. But this was also its main downside- its exclusivity to the Korean market inhibited any opportunity for the application to cross the borders and meet success abroad. On the other hand, its main rival at the time, Facebook, attributed its popularity largely to a more global outreach. Furthermore, Cyworld failed to make the jump from webpage to mobile application, which proved to be catastrophic with smartphone technology becoming popularized. To add fuel to the fire, according to former employees working on the project, the complex and belated decision-making linked to large conglomerate companies prevented the app from adjusting to the evolving needs of the market. It is believed by some that another reason for failure was that the platform did not delve deep enough into e-commerce. The app had been fixated on selling its online currency, to the point where 43% of the revenue of the parent company, SK Communications, for the second quarter of 2009 came from acorns. Lastly, in 2011 the Cyworld database had been hacked into by criminals, with many former users demanding compensation. The expensive legal battles that followed, especially in a legal system with no precedent of class action lawsuits, ended up costing the company not only financially, but also by tarnishing its reputation, acting as a final nail in the coffin.

Image source: koreaherald.com

Ultimately, Cyworld ran out of funds in 2019 and in June 2020 it officially went out of business after being abandoned for years. In 2021, a consortium of five South Korean entertainment companies named Cyworld Z acquired the rights to the webpage and all its data, with a vision to revive the former number 1 app in the country. Via a collaboration with Hancom Tech firm, the Cyworld Hancom town was created, signifying the investors’ attempt to jump into the metaverse trend. The company aimed to initially attract people born between 1981 and 1995, to come back to the platform to walk down memory lane. For this reason, Cyworld promised to uncover users’ old posts, comments and close to 20 billion pictures and videos. While many of the features that made the webpage popular have been retained, the transition to the metaverse has brought many new features to be explored. Cyworld tried to expand into the metaverse via the app Cytown, where digital currency could be exchanged to view concerts, shop, and play games. The acorns of the past gave way to the homonymous cryptocurrency, with the app developers aspiring for it to be used in real life as well. Hence, the app was reopened in April 2022.

In theory, this seemed like the perfect business plan- using the old fanbase to return to mainstream culture and use blockchains and other innovations to attract Gen Z following. And for the first few months, it seemed to work. Initial hype over the rebirth of Cyworld attracted 3.76 million active users on the month of its reopening. However, only 3 months after its big opening, in June the app had 640,000 monthly users and the 2.78 million app installations in April 2022 had fallen to 50,000.  In a vote conducted by news outlet Forkast on Twitter and TruePicture, 46 out of 59 users said that they would not stay in Cyworld after they finished uncovering their memories. But why is that? What went wrong this time around?

First, an opinion expressed in the aforementioned survey is that Cyworld did not offer something new that was not already covered by current popular platforms. In the past, the app managed to reach such heights of popularity simply because it did not have any serious competition. Up until the late 00s, there was no other place online which offered the opportunity to communicate online with so many different people. Now, social media and messaging apps are used by everyone regardless of their geolocation. Cyworld Z, like its ancestor, remained pigeonholed in the Korean market, making many critics state that there is no point in a cryptocurrency if there is no international audience. Some of the other reasons for the second failure though are the same as those for the metaverse platform launched by Meta. For example, the Cyworld Z CEO stated that “Instagram and Facebook share a disadvantage as a vertical, open-form social networking service. […] The feeds of the user and others get mixed. In the closed-form and horizontal Cyworld, the user takes centre stage.” The issue is that now, what was once the selling point is one of the key weaknesses. With the evolution of social media, the needs of the users have evolved as well.

Image source: cryptonews.net

Social media nowadays prioritises passive engagement for as long as possible. This is why gaming metaverses are far more successful than social networking ones- this passiveness that the users have associated with such platforms does not bode well in a virtual world. For a metaverse to be successful, it needs to provide fulfilling, active experiences. Perhaps, though, one of the most important factors is this- metaverses were born on the cusp of the end of the pandemic and the return to conventional life. They assumed that after years of conducting our daily endeavours virtually, this would continue to occur in the future as well. But people still prefer meeting each other in real life, so online meetings and events quickly became the norm again. Plus, the market has matured and success is no longer ensured just by promoting blockchain and virtual currencies- products need to have a clear specialization and offer something different from existing competitors. Finally, the failure of Cytown Z came at a time when as a general trend companies offering services in the metaverse suffered severe losses, with local tech moguls such as Kakao and Com2US reducing their metaverse team sizes.

To conclude, Cyworld used to be the number 1 social network in South Korea and its return as a metaverse platform was anticipated to make it the ultimate social media app. Nevertheless, its return was deemed as lackluster, offering nothing more than an opportunity to briskly go down memory lane. This comes to prove that while resurrecting an old platform with an enticing amount of big data, success is not guaranteed unless the product offers something unique and substantial compared to its rivals.


References
  • “Cyworld goes offline as return proves underwhelming” Korea JoongAng Daily, 1 August 2023, Available here
  • “Be kind, rewind! South Korea’s Cyworld is back in Web 3.0 avatar”, Danny Park, 22 April 2022, forkast, Available here
  • “Once-popular Cyworld aims to revive past glory with Metaverse”, Yoon Min-sik, 16 December 2021, Available here
  • “Personal info of 35 mil. Cyworld users feared leaked”, Yoon Ja-Young, The Korea Times, 28 August 2011, Archive here
  • “’The metaverse will be our slow death!’ Is Facebook losing its $100bn gamble on virtual reality?”, Steve Rose, 7 December 2022, The Guardian, Available here
  • South Korea’s Kakao, Com2Us wind down metaverse units, forkast news, 22 September 2023, Available here
  • “What is the metaverse?”, 11 May 2021, The Economist, Availabl here

 

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Erika Koutroumpa
Erika Koutroumpa
She hails from Athens and is a second-year dentistry student at European University Cyprus. Despite studying for a medical subspecialty, her interests include law, economics and politics. During her high school years, she participated in model United Nations conferences, something which contributed to her love of writing and communication of ideas. She likes reading, music and Art.