South Korea's Online Gaming Industry Plummets, Number Of Game Developers Decrease Under Strict Government Regulation

by Dalal Nasif / Feb 06, 2016 10:50 PM EST

Online video games were once deemed as the national sport for the new generation of South Korea. (Photo by Chung Sung Jun/Getty Images)

What was once thought to be the new national sport in South Korea is now slowly losing its hold on the market. The online gaming industry, which saw the opening of business and livelihood opportunities in the past years, is now being drowned with strict government regulations. Under the government's rules, users are limited to only a few hours of play. The government has also regulated the types of games that can be created and published.

These restrictions have greatly discouraged game developers to the point that their number was cut in more than half. From 30,535 game developers in 2009, South Korea only had 14,440 active developers in 2014, according to The Korea Economic Research Institute (KERI).

Korea Joong Ang Daily reported that South Korea is still the world's fourth-largest market for games in 2015 after China, the United States and Japan. The country raked in an annual revenue of $8.3 billion, which makes up 6.7 percent of the global market.

"Korea's game industry is a very lucrative business that accounts for over half of all exported content by volume," stated Kim Soo Yeon, a researcher for KERI. "But its insiders are increasingly saying the industry is in crisis, as excessive regulations have hindered growth."

A bill that would have helped boost the online gaming industry in 2006 took a sour turn when a scandal involving the raid of online gambling businesses surfaced. Authorities reportedly apprehended serveral lawmakers and a relative of the former President Roh Moo Hyun for their involvement in online gambling, which is still prohibited in the country.

The scandal pushed the passing of the "addiction bill." The bill treated gaming addication the same as drug and alcohol addiction, Daily Dot News wrote. The debate on the issue shifted to the impact of video gaming on the everyday life of many users. These factors led to the slow growth and expansion of the said industry.

Despite government restrictions, online gaming still remains as one of the most celebrated sports in South Korea according to BBC News. The red carpet launch of Star Craft in December last year was a highly-anticipated event for gaming enthusiasts. It took place in the high-end district of Gangnam. The prize money for the event ran as high as $250,000 with accompanying sponsorship.