The Ministry of Culture, Sports and Tourism has announced plans to expand the application of the 'mandatory designation of domestic agents for overseas game companies' but controversies regarding blind spots persist. As criticisms have suggested that the regulation has been limited to large companies with little effectiveness, the ministry has focused on lowering standards to enhance effectiveness. However, the criteria for distinguishing companies remain unclear, and there are concerns about data acquisition.
The domestic agent designation system is a regulation that mandates overseas game companies without a branch or office in Korea to designate an agent. Previously, overseas game companies took advantage of the nature of online businesses to distribute games without having a separate office in Korea. However, when they ended game services without fulfilling refund obligations or withdrew from the market after issues such as false advertising or plagiarism arose, there was no domestic responsible party to take action, allowing them to evade legal liability.
According to the game industry on the 17th, the ministry announced on the 9th plans to re-legislate some amendments to the Game Industry Act enforcement ordinance. The previously passed amendment set the criteria for overseas game companies based on a previous year's revenue of 1 trillion won and a monthly active user (MAU) count of 100,000. The industry has raised concerns that these benchmarks are excessively high and based on difficult-to-assess information, leading to a decrease in effectiveness.
In response, the ministry changed the condition to apply to those distributing or supplying games that have been installed on domestic users' smartphones an average of more than 1,000 times based on the previous year. Even if the revenue is low, if there are annual downloads of about 370,000 or more, they are included in the target. Even if they are not subject to agent designation, if significant harm has occurred or is likely to occur to domestic users, the Minister can impose designation obligations. Violating this can result in fines of up to 20 million won.
According to the regulatory impact analysis report released with the re-legislation announcement, the average daily download count for games ranked in the top 200 on the Google and Apple app markets is 796. The ministry has used this as a reference for determining the mandatory targets and estimated that over 90 overseas companies fall under the revised criteria.
The game industry is welcoming the change, expressing hope that it may filter out overseas game companies that have evaded the legal framework. In particular, as China issues gaming licenses (permission for game service) to foreign games while blocking the entry of Korean games, there have been cases where Chinese game companies entered the Korean market without properly complying with the law and subsequently withdrew from the business.
However, while the industry welcomes the re-legislation, concerns about effectiveness remain. They first point out that the criteria itself is unclear. The standard of over 1,000 new installations per day can vary significantly based on service timing, advertising, and marketing strategies. Additionally, the absence of criteria for platforms such as consoles and PCs means these games are excluded from regulation. The possibility of acquiring data is also uncertain. If platforms do not provide this information, estimates must be used for judgment, which can reduce realism.
Prof. Kim Jeong-tae from Tongyang University's Game Studies Department noted, "The criterion of more than 1,000 new installations per day is vague, and fines of up to 20 million won appear to be meaningless penalties for global large game companies," and he added, "While I agree with the legislative intent of enhancing equity, 'showcase' legislation should be avoided.