Game Industry Experiences a Yoon Seok-yeol Breeze

Expecting Legalization of Money-Making Games
eSports Activation Also a Positive Factor
High Probability of Fulfilling Promises
Due to Support from 2030 Generation

[Asia Economy Reporter Seungjin Lee] With Yoon Seok-yeol of the People Power Party elected as the 20th president, a rare breeze of optimism is blowing through the gaming industry. This is because he campaigned on revitalizing the gaming sector and won largely thanks to the support of male voters in their 20s and 30s, raising expectations for the fulfillment of his pledges.

Expectations for Legalization of Money-Making Games

According to the gaming industry on the 17th, one of the most notable pledges of President-elect Yoon is the enactment of a Digital Asset Basic Act and the establishment of a Digital Industry Promotion Agency, both related to cryptocurrency. Domestic game companies have each announced plans to enter the P2E (Play to Earn) market, but since it is currently deemed illegal in South Korea, they are waiting for Yoon’s pledge to be implemented.

In particular, the industry views the revival of Initial Coin Offerings (ICO) and the promotion of Non-Fungible Tokens (NFT) as pathways to the legalization of P2E. ICOs involve companies issuing virtual assets and selling them to investors to raise funds, similar to an Initial Public Offering (IPO) for stocks. The Financial Services Commission banned ICOs entirely in South Korea in 2017. Domestic game companies are currently using overseas affiliates to issue coins used in P2E games.

In P2E games, in-game currency is exchanged for game tokens, which are then converted into coins listed on exchanges and cashed out. If ICOs are revived, it will open the door for monetizing in-game assets domestically.

eSports Promotion and Ministry of Gender Equality and Family Abolition Draw Attention

The pledges to promote eSports and abolish the Ministry of Gender Equality and Family are also points of interest for the gaming industry. President-elect Yoon proposed activating “regional base eSports clubs” through an eSports regional affiliation system, which is expected to have an overall expansion effect on the gaming market. eSports will be officially included as a sport for the first time in history at the 2022 Hangzhou Asian Games scheduled for September, raising the status of eSports. However, most popular eSports worldwide are games developed by overseas companies.

An industry insider said, "If the government actively promotes eSports at the national level, the gaming industry is likely to develop related games. With institutional support and an industrial framework in place, there is potential for long-term growth."

The pledge to abolish the Ministry of Gender Equality and Family, which has been responsible for regulating games, could also be a boon for the industry. Since the ministry initiated the “shutdown system” that forcibly disconnects youth from games, its abolition is expected to lead to the relaxation of game-related regulations.

Stricter Regulations Including Full Disclosure of Probability-Based Items

Not all of President-elect Yoon’s pledges are favorable to the gaming industry. A representative policy is the “complete disclosure of probability information for loot box items.” This was one of the most emphasized pledges to capture the votes of men in their 20s and 30s, and its implementation likelihood is very high.

The gaming industry argues that this should be left to self-regulation. They claim that if the probabilities of loot box items, a major source of revenue, are fully disclosed, it would be difficult to differentiate their games from competitors. Moreover, if this is legislated, punitive provisions would inevitably follow.

The industry also expresses reluctance toward the establishment of a dedicated investigative unit for small-scale game fraud and the installation of a game user rights protection organization within game companies. An industry representative explained, "While it is right to do our best to protect users, some policies could impose excessive responsibilities on the gaming industry. It seems likely that companies might have to directly resolve disputes even when they are not directly related to them."