A researcher from the Cyberculture Research Institute (사이버문화연구소) thinks that it has to do with giving recognition to those who excel in socially less recognized areas such as fighting and games. The article also mentions the view that it's an example of subculture picked up by the mainstream for commercial purposes, and also a critical view that the use of term forces standardized norms of appearance.
I hear the word most often inbetween classes, especially among10-13 year old boys joshing around. I can't tell, because I don't speak the language, but there seems to be a combination of one-upmanship and sarcastic put-downs. The "recognition to those who excel...in games" definately fits with the behavior I've observed.