South Korean game developers lost in between confusing guidelines

By Park Sae-jin Posted : April 25, 2016, 10:40 Updated : April 28, 2016, 08:41

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[Focus: South Korea's PC online gaming industry defoliated by excessive regulations]

By Aju News Park Sae-jin 

South Korea's online gaming industry was once hailed as a lucrative business but it is now lost in a maze because of excessive regulations and confusing guidelines that sparked an exodus of game developers.

The market for personal computer online gaming has grown from seven trillion won (6.01 billion US dollars) in 2010 to 10 trillion in 2014. The number of game developers, however, has decreased by 30 percent over the last four years due to strict regulations.

A business slump began in 2012 when a "shutdown" law was enforced to bar youngsters under the age of 16 from playing computer games from midnight to 6 am, compounded by the Personal Information Protection Law to prevent hacking and the theft of personal information.

The anti-hacking law followed a cyber attack on South Korea's major game publisher Nexon in November 2011 that leaked addresses and other personal information used by some 13.2 million people. The government enforced a revised and tighter law in 2014 despite an outcry from game developers.
 
[Courtesy of Isense PC Bang]
 
Game publishers were forced to change their systems or develop new ones, resulting in a shortage of manpower developing and managing games. Many hastily developed games have poured out.

A study from the Korea Economic Research Institute showed that the PC online game market has dropped from 6.78 trillion won to 5.2 trillion won for three years from 2012. According to HungryApp's research , 59 PC online games ended their service in 2015.

NHN Entertainment, one of the country's largest game publishers, suffered an operation loss of 54.3 billion won last year with sales from its PC online game business falling 34.2 percent from a year earlier.

"The gaming industry is lost at the moment," said Plissken, a game publisher who used an alias. "Strengthened regulations will only bring a negative effect upon the industry."

"No one would wish to invest in the industry as long as the government maintains regulations," Plissken said. "Investors will cringe if the government keeps on adding regulations on the industry."

South Korea is still the world's fourth-largest PC online market for games in 2015 after China, the United States and Japan, raking in an annual revenue of $8.3 billion.

To revive the stagnant gaming industry back, the ministry of culture, sports and tourism unveiled a plan in February to loosen regulations along with a fresh investment of one trillion won to develop virtual reality contents and artificial intelligence for next-generation games.

"Irrational regulations will be eased, and investments will be expanded into the research and development of next-generation games, so that the renaissance of the gaming industry will come again," Minister Kim Jong-deok said, calling for a second boom in South Korea's gaming industry.

But a different and conflicting message came from the ministry of health and welfare to define games as the main cause of additional addiction along with drug, alcohol, internet, and gambling. To provide better medical care and prevent game addiction, it plans to use a disease code for games.

The industry is now trapped in a vicious cycle, Plissken said, as falling sales are creating a "loop of death", chasing away investors and leading to the production of second-class games.

Government officials nodded their approval at growing complaints from game developers that excessive regulations have hindered their growth. However, there is a long road ahead to work out a compromise.

Aju News Park Se-jin = swatchsjp@ajunews.com
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