[The Editors' Verdict] Game Regulation and the Competitiveness of the Gaming Industry

Recently, there is a prevailing analysis that the global gaming market is being reorganized around intellectual property (IP). For example, Microsoft (MS) and Tencent are showing movements to secure game IPs through aggressive mergers and acquisitions (M&A). Instead of developing new IPs, they are acquiring companies that own popular IPs based on overwhelming financial power. Meanwhile, NCSoft is expanding the platforms of Lineage and Lineage 2 to mobile, and Nexon is experiencing a resurgence by utilizing existing IPs such as "Baram-ui Nara: Yeon".

On the other hand, it has been reported that Google decided to shut down Google Game Studio after two years due to the enormous development costs and time required. The fact that Google, with its tremendous capital, closed its in-house game studio is a representative case showing how difficult success in the gaming market is. Accordingly, collaboration with external developers for content acquisition is expected to accelerate rather than developing new IPs.

Despite this challenging competitive environment in the gaming market, South Korea still maintains "Galapagos regulations," which is signaling a red light for the competitiveness of the gaming industry. There is a strong movement to impose government regulations on the domestic gaming industry, such as the proposed amendment to the Game Industry Promotion Act in the National Assembly, which attempts to convert the voluntary disclosure of probability information for probability-type items, which has already been established, into legal regulation.

In fact, for government regulations to secure legitimacy and effectiveness, a meticulous analysis of how they affect the competitiveness of South Korea's gaming industry must precede. In other words, scientific analysis is needed to determine whether government intervention and guidance in the private economic sector help strengthen the competitiveness of the gaming industry or act as a hindrance. However, it is highly questionable whether government regulations on games in South Korea, both in the past and present, are based on such meticulous scientific analysis. In a way, the continuous issues raised about government regulations in South Korea stem partly from suspicions that these attempts are made without such thorough and scientific analysis as a premise.

Moreover, in today's gaming industry environment, a reexamination of the government's role is necessary. Traditional command-and-control style government regulations in the past have not only failed to meet their inherent justifications or objectives but have also hindered the development of the private economic sector. Therefore, fundamental reflection on the justification and methods of government regulation is required, and furthermore, the paradigm of government regulation itself needs to change.

Korean game companies are making their best efforts to survive in the fierce gaming market and are continuously producing excellent results. The gaming industry is one of the sectors expected to achieve another leap forward in the untact era brought about by COVID-19. Moreover, competition in today's gaming industry is not confined to a single national market. The competitive arena has long expanded to the global stage, and competition is expected to become increasingly intense.

For South Korea's gaming industry to make a significant leap forward and to be competitive and victorious on the global stage, government intervention and regulation should be kept to a minimum. It is important to remember that premature and clumsy government regulations that do not understand the characteristics of the gaming industry and fail to present a vision for its future can have adverse effects, hindering the industry's leap forward or causing it to lose competitiveness on the global stage.

Hwang Seong-gi, Professor, Hanyang University School of Law