The video game industry is constantly evolving, and with it the need to regulate certain aspects of gameplay. One such aspect has been lootboxes, virtual containers of randomized game content that are often controversial because of their similarity to gambling.
New rules and extensive testing
Amendments to the Gaming Industry Promotion Act came into effect in South Korea in March this year. Under the new rules, all companies, both domestic and foreign, are required to disclose the likelihood of loot box rewards right on the in-game purchase screen.
South Korea’s Game Rating and Administration Committee (GRAC) conducted an extensive audit after the new rules were introduced. The results were quite revealing:
- 1,255 cases checked;
- 266 games were found to be in violation of the rules;
- 60% of violators were foreign companies;
- 185 developers have already corrected the violations.
These figures demonstrate the seriousness of the South Korean authorities’ approach to regulating loot boxes and the willingness of most developers to comply with the new requirements.
Consequences for violators
GRAC is not limited to only identifying violations. The committee is taking proactive steps to enforce the new rules:
- fines of up to 20 million won (about $14,400);
- possible imprisonment of up to two years;
- The threat of a ban on the distribution of games in South Korea.
The last point is particularly noteworthy. Five foreign games face a complete ban in the country if their creators do not fulfil the requirements to correct violations. This is a serious incentive for companies to bring their products into compliance with local laws.
After all, lootboxes have already been repeatedly associated with gambling, and children should be protected from such entertainment in every possible way. Even adults can get carried away and spend more than they bargained for to open these boxes. Well, in the case of children, who have less control over their actions, such cases can happen much more often. Not to mention the increased risk of gambling addiction.
Recall that gambling is illegal in South Korea. However, the ability to play via the Internet allows the country’s residents to easily satisfy their gambling needs. In the Korean segment, despite the blockages, brands such as Melbet or 1xBet are leading the way. Therefore, if you use a VPN or mobile app, you can quickly pass registration in Melbet and, in just a few minutes, get access to a huge number of games and bets right from your phone.
Of course, Koreans, like parents from other countries, try to control their children and stop them from using gambling apps. However, lootboxes are much more complicated, as a seemingly harmless video game may well contain such a dangerous method of monetization. Parents often don’t even realize it until money starts disappearing from their bank cards.
Monitoring and Exclusion Techniques
GRAC takes a comprehensive approach to monitoring the situation with lootboxes. The committee pays attention to popular games, user complaints and media reports. In addition, already researched games are re-examined to ensure that new items and lootboxes are compliant with the rules.
It is important to note that the Game Industry Promotion Act does not apply to certain categories of games:
- educational and test products;
- arcade games;
- games from companies with annual revenues of less than 100 million won in the past three years.
This approach allows us to focus on the major market players who have the greatest influence on the gaming community.
The new rules in South Korea demonstrate the growing trend of lootbox regulation in the global gaming industry. This could become an example for other countries seeking to protect players from potentially harmful practices and ensure transparency in-game mechanics.
