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Reporter's notebookGov't needs to offer 'practical help' to game companies

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Startup minister Park Young-sun, fifth from right, poses with officials in game industry during a conference about nurturing game startups in Seoul, June 2. / Yonhap
Startup minister Park Young-sun, fifth from right, poses with officials in game industry during a conference about nurturing game startups in Seoul, June 2. / Yonhap

By Baek Byung-yeul

With contactless services being deemed as a lucrative area in the post-COVID-19 world, the government has been in a hurry to announce various support plans to boost the local game industry. The Ministry of SMEs and Startups recently announced that it would create a support fund in conjunction with companies such as Netmarble and Krafton to help nurture game startups.

In addition to the startup nurturing program, the culture ministry also announced a comprehensive development plan for the game industry, ranging from reforming "irrational" regulations and supporting local firms to tapping into overseas markets and nurturing the esports industry.

President Moon Jae-in also gave a strong signal that the game industry would become a core item for the country's content business with the presidential office opening a virtual office in Microsoft's popular sandbox game "Minecraft" on the occasion of May 5 Children's Day.

Given this was the first time for the President to communicate with gamers via a game, the invitation to the virtual presidential office was well-received among the younger generation.

However, industry officials said the support plans are typical window dressing and are calling for the government to provide more practical help for them.

It has been more than three years since Korean games were banned from exporting new titles to China, the largest game market in the world.

Game firms must obtain licenses from the Chinese government for new games, but Korea firms have been prevented from launching new products since March 2017 when Beijing stopped issuing licenses as part of its retaliation against Korea allowing the deployment of a U.S. Terminal High Altitude Area Defense (THAAD) system here.

While Korean companies have been effectively prohibited from selling new games there, Chinese game companies are increasing their dominance in the Korean market. According to data from the China Game Publishers Association Publications Committee, Chinese game companies posted sales of 1.92 trillion won ($1.58 billion) just in Korea.

Industry officials have stressed the government should promptly come up with measures to resolve the unfair business practices between the two countries.

"There has been unfair trade between China and Korea. Since the deployment of the THAAD system, Korean games have been banned from China," said Yang Sun-woo, CEO of local mobile game company Birdletter during a recent conference held by the startup. "I am urging the government to talk about this issue when President Xi Jinping visits Korea."

He added that the government needs to revise the infamous shutdown law because the curfew system, restricting online gaming hours for teenagers under the age of 16, only applies to domestic games.

Companies claim that the curfew system, which went into effect in 2011, leads young gamers to only play games from foreign companies. Lawmakers discussed easing or scrapping the law during the 19th and 20th National Assemblies, but a bill is still pending.

Seen is a virtual presidential office seen in Microsoft's sandbox game
Seen is a virtual presidential office seen in Microsoft's sandbox game "Minecraft." / Courtesy of Cheong Wa Dae

Nevertheless, it is clear the government is slowly making progress in improving support for the local game industry. The culture ministry said last month that all game firms would have to disclose detailed information about winning rates for luck-draw items in their games.

The luck-draw items have been a great income source for game companies as the random items help players advance in a game, but at the same time firms have also been criticized for encouraging gamers to overspend.

In reaction to such criticism, domestic game firms have been conducting self-regulatory actions, providing detailed information to gamers about winning rates when selling the virtual items. This measure has produced an uneven playing field issue among domestic firms as almost every Korean firm has been complying with the self-regulation while only 49 percent of foreign makers have followed the self-regulation.


Baek Byung-yeul baekby@koreatimes.co.kr


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