Internet Games Prove Challenging for South Korea

October 31, 2013, 7:21 AM

Internet Games Prove Challenging for South Korea

By Jaeyeon Woo

South Korea’s government may find it difficult to stake out a winning position regarding online games if victory means coordination between the appendages of two arms of government. On one hand, ruling-party lawmakers are calling for measures to curb the playing of online games, citing antisocial side effects, while on the other, a ministry says the industry is an important cog in a strategy of vouchsafing the country’s economic success in creative industries.In April, Shin Eui-jin, a doctor-turned-lawmaker from the ruling New Frontier Party, proposed a bill that excessive playing of online games be officially listed as an addiction, thus making it subject to government oversight alongside alcoholism, problem gambling and drug abuse. The bill joined two others pending passage in the National Assembly that would allow the government to collect from Korean makers of games up to 1% of annual sales to be deposited in a fund that would be used to help cure people addicted to games.

On Tuesday, the Korea Internet & Digital Entertainment Association said the legislation is a betrayal of the government’s commitment to promoting online games as one of five items—along with K-Pop, movies, animation, and theatrical musicals—that will help Korea grow into a “software” powerhouse.

The association adorned its homepage with a “death” banner and started a petition against the antigame bills.

Last week, it said the legislation was “turning the clock backward” and an attempt to strangle an industry that “contributes about 60% of the country’s content exports.”

But the economic argument isn’t necessarily gaining traction with people who see the dangers outweighing any benefits.

Ruling party representative Suh Sang-ki said Tuesday that online games could cause far worse damage than other addictions, with teenagers being most at risk.

Earlier this month, Hwang Woo-yeo, the former ruling party floor leader, told the legislature that Internet games, gambling, drugs and alcohol were “evils.” He cited an incident in which a boy killed his mother, who had scolded him for too much computer games.

According to Ms. Shin’s bill, around 3.3 million people of the country’s 50 million population require medical treatment given the extent of their addition to Internet games. Current legislation, she says, doesn’t provide enough help for addicts or effectively prevent more people from getting hooked.

Last Friday, opposition Democratic Party lawmaker Choi Min-hee said the government has an incoherent, self-contradictory stance.

“The ruling party is trying to put a strong curb on the game industry while the Ministry of Science, ICT and Future Planning is promoting online games as one of five killer content areas.” she said.

Ms. Choi acknowledged that side effects and crimes associated with games need to be addressed, but said the ruling-party lawmakers’ plan doesn’t comprehensively take into account the consequences for industry. It is “passing the buck onto consumers,” she said.

Ms. Shin countered the criticism from the game industry during a radio interview on Wednesday. She said it failed to understand that the bill she proposed, which is scheduled to be scrutinized in a public hearing on Thursday, is more about prevention than regulation.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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