In recent months, South Korea is taking steps to amend its regulations in the Game Industry Promotion Law, particularly in relation to overseas gaming companies. The proposed alteration suggests that these companies without a South Korean address or place of business should either establish a local company in South Korea or find a domestic agent to ensure compliance with the law.

Background

South Korea has a history of implementing local regulatory rulings in the gaming industry, similar to China. The Chinese regulator issues licenses to approved games, and overseas developers collaborate with Chinese publishers to release their games there. Interestingly, Chinese games are the primary focus of these potential amendments in South Korea.

Proposed Changes

According to GameLook, Lee Sang-heon, a Korean Democratic Party congressman, stated, “Many Chinese games immediately started to induce krypton gold after opening the server, making a lot of profits, and then stopped less than a year after going online. The supplementary bill aims to protect domestic users in Korea.”

While larger companies like Tencent and MiHoYo are likely to comply with the regulations as is, South Korea is concerned about smaller and medium-sized companies using controversial marketing methods when targeting its citizens.

Another reason for the potential change in the law is the practice of “eat and run” in South Korea, where mobile games are suspended without offering players refunds. Since international laws do not apply in South Korea, holding overseas companies accountable becomes challenging.

Reportedly, the compliance rate of companies within South Korea is 99.1%, but drops significantly to 56.6% abroad.

Targeting Chinese Games

Chinese games are specifically targeted in these potential amendments due to their current success, which poses a threat to local game companies in South Korea. Sensor Tower data revealed that MiHoYo’s Honkai: Star Rail ranked among the top-grossing games in the Korean market during its first month. It even surpassed Genshin Impact’s revenue in most parts of the world.

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