How South Korea’s Government Is Destroying The Korean Gaming Industry


South Korea used to be a bastion for gaming at one point. Between 2000 and 2011 the South Korean gaming market boomed with a strong mixture of MMO theme-park clones and some original titles like Gunz: The Duel, Ragnarok Online, Rose Online and Fly For Fun. However, you may have noticed that the frequency of South Korean MMOs have slowed down greatly over the past few years. A lot of that is due to the strict regulations, limited tax breaks and curfews that the South Korean government have applied to the industry over the past five years.

Tensions in the gaming industry have escalated quite a bit in South Korea over the topic of addiction; this is despite the fact that South Korea is considered the e-sports capital of the world. In fact, the perceived addiction to gaming is what has caused a change in the way the South Korean Ministry of Culture and Ministry of Gender Equality and Family have aggressively gone after the gaming industry within the region.

While it was admirable that the Ministry of Culture called out Blizzard back in 2012 over Diablo 3’s Real-Money Auction House and its potentiality for gambling addiction, as reported by IncGamers, there was a lot more brewing under the surface regarding regulation, discussions about addiction, and video game youth restrictions.

In a report by Bloter back in 2013 they explained how South Korean District Representative Hwang Woo-yea stated that internet gaming addiction affects up to 470,000 people in South Korea and claims that addiction overall in Korea makes up for 6.7% of the population.

The District Representative and the Ministry of Gender Equality and Family also stated that video game addiction is one of the “4 of the Evils” plaguing South Korean society, along with gambling, alcoholism, and drug addiction.

Hwang Woo-yea has managed to get into the ears of Senators to push for a bill that introduced the Game Addiction Prevention Act. Some of the Senators believed at the time that before such an act could be made widespread that they should “expand the argument that (video games) sales be stopped” while they evaluated the “concept of addiction causing substances” like video games.

The Game Addiction Prevention Act was debated for years, and many actually argued on behalf of games given how big the e-sports scene and gaming is in South Korea, as reported by CNET back in 2014. However, the debate was lost just this past year in late February, 2016, as This is Game reported that the Korean Health and Welfare Department are looking to define careers in video games (likely related to e-sports) as an “illness job” and that they will need to monitor and continue to research the industry in relation to addiction.

According to an article published this past March on Geksake, it notes that the addiction levels in South Korea have been labeled by its government as having reached more than half a million…

“South Korean Internet Game Addiction and population had reached 680,000, for which the South Korean government will allocate 5.4 trillion won of funds (about RMB 30 billion) per year for social and economic governance and management”

Much like China, South Korea already has militarized rehabilitation faculties, as reported by Business Insider. Those found to be addicted to gaming are required to attend these rehabilitation centers so they can be “cured” and reintegrated back into society.

Some suggested that perhaps the problem isn’t gaming or the kids, but perhaps the problem of video game addiction is a result of poor parenting. The Korean Government has neither acknowledged nor commented about the issue of poor parenting being the cause of video game addiction, in spite of the fact that there were cases like the one reported by Newsweek back in 2014, where they noted how two parents in South Korea let their kid die of starvation because they were too busy gaming.

Instead, a report from Korean gaming site Hungry App states that the continued debate over game addiction being labeled as a medical illness in South Korea has the Department of Health and Human Services wanting to monitor video game and smart phone usage from infants up until college level to look for signs of addiction and, if necessary, take manual action to intervene and prevent a possible case of addiction “illness”.

The South Korean Ministry of Health and Welfare have essentially likened video game addiction to something they see as “poison control”.

The regulations that were amended in 2014 actually already saw various publishers begin to shift their focus abroad, especially with relocation and service operation being setup in China instead of South Korea.

According to the Hungry App report, some of the publishers slowly abandoning the South Korean market include Nexon, NCSoft, Netmarble, and Smile Gate. Some publishers also fear that the tax cuts they receive for publishing in South Korea may be affected by the additional funds that the Ministry of Health want to invest into monitoring and regulating video game addiction with extreme prejudice.

The article notes how dangerous a precedent this all is given that gaming accounted for 0.9% of South Korea’s youth employment in 2012, but with introduction of some restrictions such as the Shutdown Law that passed in 2011, the youth employment in gaming dropped to 0.87% in 2013, and they expect those numbers to further plummet as regulations increase, thus driving out more publishers, more jobs for the youth, and more revenue from South Korea.

Even more than that, the Korean Economic Institute also released a report showing that video game enterprise in South Korea has dropped by 47% between 2009 and 2014, following the implementation of stiff regulations and restrictions instituted by the South Korean government, as noted in an article by News1, which was published in early February of 2016.

According to an editorial published last October in 2015 by Naver Sports, they reiterated what was mentioned above, stating that jobs in the gaming industry within South Korea are “plummeting”. They go on to note that the requirements from the Ministry of Gender Equality and Family and Culture Ministry to implement and enforce the Shutdown Law – which sees youth 16 years of age and under being unable to play games or attend PC cafes between 12:00am to 6:00am, unless their parents specifically request for the law to be lifted for their child – has cost the South Korean gaming market more than 1 trillion won, according to estimates from the Korea Economic Research Institute. This equates to approximately $860 million in USD.

The Shutdown Law not only affects cyber cafes and PC gaming at home, but Sony and Microsoft were also required to check the ages of the users logging in, and shut down PSN and Xbox Live at night for those under 16 to comply with the South Korean law, as reported by Game Revolution.

Things have become worse yet for the youth of South Korea, as they’ve begun mandating that PC cafes start using expensive new fingerprint scanners and ID card readers. In a report from Naver back in January of 2016, they followed a 19-year-old Mr. Kim who wanted to go out drinking with friends and possibly hit up the local PC cafe. Kim has plans on attending college later this year. However, when he attempted to enter the cafe he was required to have his fingerprint scanned and his ID card read. Mr. Kim was denied entry because according to the cafe owner, in order to enter into the establishment youth “requires a high school diploma”.

That’s right, if you don’t have a high school diploma you will be denied entry into a PC cafe. Mr. Kim stated that the ID card reader and fingerprint scanner made him feel like a criminal.

According to the article, these fingerprint scanners were used originally in pubs, bars, nightclubs and stores that sold tobacco. However, with the new laws and government crackdown on video game addiction, they’re specifically targeting PC cafes in an attempt to curb those under 18 from dropping out of high school.

The article goes on to state that the fingerprint scanners are becoming mandatory since police can raid PC cafes if they find out that they are allowing in youths unlawfully. For the first offense there’s a 500,000 won fine, which is just a little under $450 USD. If a PC or cyber cafe is caught more than three times servicing youth unlawfully, they can be shut down.

If you think that things are any easier in the indie scene in Korea, you’re gravely mistaken. Indie developer Somi, who made the game Retsnom that’s currently available on Steam, describes in a blog post the difficulties and the multiple steps in getting registered and approved to release an indie game in South Korea. The blog post covers a step-by-step process in interacting with the different government institutions and hoops that had to be jumped through to get certified to release the game in South Korea.

Ultimately, there is no safe haven in South Korea for gaming. The mainstream industry is hampered by stiff regulatory restrictions, the PC cafe scene is bogged down in identification policies, and the indie scene is blockaded by bureaucracy.

Sadly we’re witnessing one of the four largest markets in the gaming industry rapidly fall off the map after growing and expanding so fruitfully throughout the early aughts. The anonymous Korean gamer who notified me about the issues in South Korea and sent the links over about these issues isn’t alone in feeling disgruntled at the overbearing regulations within the region, but sadly these gamers don’t seem to have anywhere to turn to fix an industry that their government is constantly breaking.

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Billy has been rustling Jimmies for years. The GJP cried and their tears became his milkshake. Contact.

  • Wow, there are somethings I find myself agreeing with these laws, and there are definitely things I can’t in good faith agree too. It’s a shame people get so caught up in the hysteria, that they can’t sit down and have productive discussions on how to tackle serious issues.

  • giygas

    I wonder if the abusive F2P business models that Korean video game companies are famous for had something do with it.

    • F2P does breed addiction and whales… but I would still say a very stringent set of societal norms (working hours and school) combined with a lack of proper home care and an environment that fosters family nurture has led to their current predicament.

    • EroBotan

      mmm … I don’t think so, we have a lot of games especially the one with gacha system which are abusive but we non-koreans are still doing fine.

      a bunch of AAA western developers are also very abusive and we still doing fine.

      korean government is most likely just trying to find excuses to monitor their citizens. A bunch of people told me that the president is a dictactor’s daughter.

      • TabathaRHowell

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    • DizzyGear

      I’m pretty sure it has. Virtually all of them make money off capsules/rng boxes/whatever you wanna call them.

      Meaning you cant just buy items off the shop. No, you have to gamble for them with real money.
      Its the reason i stopped bothering with Korean MMO’s when even Tera started this pull this shit for purely cosmetic items on the cashshop.

      Another sad story is S4 League. Was a great 3rd person shooter that looked like Jet Set Radio and Gunz the Duel had a baby.

      Seriously it was awesome. Controlls were perfect, awesome soundtrack, and great art direction by Panamaman. (Check out his work. Its awesome: https://www.zerochan.net/Panamaman )

      At some point the game didnt make them enough money so they removed ALL permanent items from both the ingame currency shop and cash shops so you can ony rent stuff and the only way to permanent items is by, you guessed it, gambling.

      Things got worse when they introduced “force packs” which were weapons with insanely overpowered stats that also stacked. FYI you can carry 3 weapons so a person with 3 of them has an insane advantage over a free player.

      But as you can guess you can only obtain them by gambling. And at some point all weapons had force pack variations so they started cranking out new weapons which were either completely useless or overpowered as hell just so they could make forcepack variations to gamble for.

      From there the game only got worse and i bailed out. I played a few months back and it a just a hollow shell of what it once was.

      But to be honest its not just cash shop that rely on RNG. Its the core of many Korean games. Tera’s end game? Layers upon layers of RNG. Aion? RNG. RNG everywhere. Lineage 2? Same shit. All praying on people’s tendency to gamble to keep you hooked and spend money.

      While these measures are extreme and all that was really needed was stricter gambling laws. In the end they brought it upon themselves.

      As a sidenote i think the gambling laws in the west should be ajusted to combat this shit as well. Publishers get away with selling RNG boxes for real cash by saying the costume/weapon/whatever is an extra prize and on paper you are really paying for the (often useless) garanteed item they contain. Meanwhile some of the games containing them games are marketed to kids. Its disgusting.

      • Dang, bringing back those fond memories of S4 League. I used to play the crap out of that game. In my humble opinion it controlled better and was better balanced than Gunz: The Duel… loved that game, hated the cash shop.

      • DizzyGear

        Same here. Sunk more hours in S4 then i want to admit. Hence why it pisses me off so much what happened to that game.
        After the infamous ‘Patch 10’ the game was fucked and only got worse from there on.

  • Benjamin Peters

    Netmarble? If that’s one of the companies fleeing, now I can understand a little bit more. I wish more would be down about the damn F2P market. Not anything as extreme as what South Korea is doing, but something. For the sake of people’s bank accounts as much as for the sake of gaming. Because they’re showing the industry that mental manipulation through addiction makes a shit load of money. Something needs to be done before it becomes the entire industry.

    • It’s interesting you mention that… Cliffski from Positech made a similar post about how the mobile market is scheming and manipulating the market in a gross way to pilfer everything they can out of people who are easily parted with their money through the addiction of clicker-type products.

      It’s a complex system given that constantly stepping in to implement regulation crosses a fine barrier that could easily disrupt the organic structure of capitalism.

      • Benjamin Peters

        I feel like as much work goes into manipulating money out of people on the mobile market as goes on in the casinos in Vegas. Understanding compulsion and its triggers is a business science field at this point.

      • I feel like as much work goes into manipulating money out of people on the mobile market as goes on in the casinos in Vegas.

        Ha, dude. It’s exactly the same thing.

        In that regards I don’t fault Korea for calling F2P schemes that create “whales” as being equivalent to gambling, because it basically is the same thing and feeds on the same psychological impulse. John Riccitiello was explaining this to investors regarding microtransactions for Battlefield in that one leaked audio clip during the investors call.

        But in the case of South Korea… it seems like they overdid it and went Rambo against gaming in general.

  • C G Saturation

    Sounds like something that could eventually happen in the West, what with all the assholes blaming everything on gaming all the time.

    • scemar

      It’s the worst case scenario, full dystopia, big government won, everything tracked, controlled, by force even and “the state knows best for you”.

      It’s one of the reasons why losing anonymity online should be feared as such a dangerous thing, it is the first step to this.
      And the ways this can go wrong are so many.
      South korea is not really that far from the north’s crazyness it seems.

  • scemar

    Finger scanners….that’s where I stopped thinking “Oh hey it looks like they do have some issues, not my business how they handle it in their country”.

    Their measures seem overly strict, and creepy, borderline scary with the whole disregard for free will and forcing people to attend the militarized re-education camps.
    They are trying to tackle the matter by force and gaming exists all over the world. Yet they’re the only ones with this level of problems, and they also mention gambling and alcoholism.

    In my biased opinion they seem to have a cultural problem and they’re using gaming as a convenient scape goat to avoid actually having to look at themselves in the mirror.
    Whatever problem they actually have is worse than gaming. Shame their industry is basically being sacrificed.

    • You know what the REAL scary part is? The Re-education or rehabilitation facilities are almost identical to the ones in 1984. The Ministry of Love and the Ministry of Truth. Some people died in those camps while others were tortured until they were “cured”. I’m not talking about 1984… I’m talking about the real life camps… for video game addiction.

      This specific case was from one of the Chinese camps:
      https://abcnews.go.com/Technology/story?id=8269601

  • Bitterbear

    And that is what a feminist country looks like. I’m surprised they haven’t cataloged a man masturbating while in a relationship with a woman as adultery.

  • DizzyGear

    This also reminds that the South Korean government also made changes to
    the rating system resulting in censorship in the korean mobile game Soccer
    Spirit.

    https://www.youtube.com/watch?v=-SP7OjLQHQ4
    I wonder if this will result in other Korean games being forced to patch in censorship.

  • chaoguy

    For more horror stories, check out https://twitter.com/gookanon
    It goes beyond games into downright totalitarianism. All in the interest of “protecting” people from the very things they are being subjected to.
    Pictures related, there his posts.

  • durka durka

    ” video game addiction is one of the “4 of the Evils” plaguing South Korean society, along with gambling, alcoholism, and drug addiction.”

    South korea is a prime example of a rich country that fails to bring happiness, on top of that, they worst the most hours in the world and the competition and stress is so high that everyone is on antidepressants and there alot of suicides because people cant keep up with the demands of their country. The exams alone are something that a student might not survive.

    This should be a reminder to poor countries that money does not bring happiness since it is impossible to maintain without constant strain and competition.

    • michaelwfisk

      Except South Korea really isn’t that rich in the grand scheme of things – their per capita GDP, according to the World Bank, is less than Italy or Spain, two countries that are considered relatively poor by Western European standards. They’re even a ways below Japan still, an economy that has been imperiled for the past quarter century, to say nothing of Germany or the UK (more than half again greater than South Korea), Canada or Ireland (double), or Norway or Switzerland (more than triple). Overall, short of some of the urban centers, South Korea still is on the outskirts of what would be considered an advanced economy.

      • Audie Bakerson

        And South Korea is only THAT far industrially because of the Empire of Japan (which industrialized the country when it was a vassal), and the United States.

  • Hawk Hopper

    The District Representative and the Ministry of Gender Equality and Family also stated that video game addiction is one of the “4 of the Evils” plaguing South Korean society, along with gambling, alcoholism, and drug addiction.

    I was reading about the puritanism in the late 1800s and early 1900s and the “‘4 of the Evils’ plaguing South Korean society” sounds like something the temperance broads or Anthony Comstock would have come up with.

    • Audie Bakerson

      Unfortunately puritanism would have been a vast improvement to South Korea during those eras. Families selling their own daughters to sex slavery was disturbingly common there.

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