On April 24, 2025, the Ministry of Culture, Sports and Tourism (the "MCST") issued a legislative notice regarding a proposed amendment to the Enforcement Decree (the "Enforcement Decree Amendment") of the Game Industry Promotion Act ("GIPA"), which includes key provisions such as criteria for foreign video game companies mandated to designate a local representative.
Under Article 31-2 newly added to GIPA through the amendment dated October 22, 2024 and taking effect on October 23, 2025, certain video game publishers or providers without an address or place of business in Korea that meet the criteria prescribed by Presidential Decree are required to designate a local representative to fulfill (i) the reporting obligation under Article 31(2) of the GIPA and (ii) the disclosure and labelling obligations under Article 33 of the GIPA. The Enforcement Decree Amendment implements this change to the GIPA by setting forth the criteria for applicability and other details related to the amendment.
The MCST accepted public comments on the Enforcement Decree Amendment until June 4, 2025. The decree may be revised based on the feedback received. In particular, it is anticipated that the scope of application may expand beyond what was initially proposed. The final version of the Enforcement Decree Amendment is scheduled to take effect on October 23, 2025.
This Legal Update provides an overview of the key provisions of the local representative designation policy under the GIPA, focusing on the provisions of the Enforcement Decree Amendment, and examines the potential impact of the policy on the domestic game industry.
1. Summary
2. Key Provisions of the Local Representative Designation Policy under GIPA
A. Overview
Article 31-2 of the GIPA requires video game publishers or providers without an address or place of business in Korea who meet the criteria prescribed by Presidential Decree, such as user numbers or sales turnover, to designate a local representative in writing to act on their behalf. If the local representative violates the GIPA in the course of fulfilling their duties, the foreign video game company is deemed to have committed the violation.
(1) Reporting under Article 31(2) of GIPA
The Minister of the MCST, or the mayor of a Special City, Metropolitan City, or Special Self-Governing City, or the governor of Province or Special Self-Governing Province or the head of a Si/Gun/Gu may require reports from business entities engaged in video game-related business to:
- maintain order in the distribution of video game products;
- prevent use of video games for gambling activities; and
- prevent promotion of gambling via video games.
(2) Disclosure and Labeling under Article 33 of GIPA
A person who produces or distributes video games for the purpose of distributing them or making them available for use must label each game with the name of the producer/distributor (or the name of the publisher if the is bundled with a book), rating, and content information.
A person who produces, distributes or provides video games for the purpose of distributing them or making them available for use must disclose the type of loot box-type items used in the game, probability information on each type of such loot box-type items, and other matters prescribed by Presidential Decree on the relevant video game product, as well as on its website and in advertising and promotional materials.
Finally, a person who produces or distributes video games for the purpose of distributing them or making them available for use must attach a device that provides information on the operation of the game as prescribed by Presidential Decree.
B. Applicable Entities
Under Article 18-3 of the Enforcement Decree Amendment issued on April 24, 2025, the local representative designation requirement applies to video game publishers or providers without an address or place of business in Korea that meet any of the following criteria:
- A person or entity having annual sales turnover of KRW 1 trillion or more for the previous year (or the previous fiscal year, in the case of a legal entity) [based on the amount converted into Korean won using the average exchange rate of the previous year (or the previous fiscal year, in the case of legal entities)]
- A person or entity distributing or providing a video game product that has at least 100,000 monthly average Korean users in the last three months of the previous year (in the case of a video game product provided in multiple forms, the figures shall be aggregated)
- A person or entity deemed necessary to be designated by the Minister of the MCST in cases where an incident or accident causing, or likely to causing, significant harm to video game users has occurred or is likely to occur
However, the local representative designation requirement does not apply to entities that distribute video games or make them available for use on information and communications network under an intermediary agreement with a game-related business entity (the proviso to Article 18-3(1) of the Enforcement Decree Amendment).
According to the draft guideline on the local representative designation policy under the GIPA, which was attached to the press release issued by the MCST on April 24, 2025, examples of entities exempted from the local representative designation requirement include Google (Play Store) and Apple (App Store).
C. Qualifications and Designation Procedure for Local Representative
A local representative must be a natural person or legal entity that has an address or place of business in Korea. While the natural person is not required to be a Korean national, he/she must be able to communicate fluently in Korean to fulfill the reporting and other obligations under Article 31(2) of the GIPA.
For reasons of customer service or the ease of collaboration with partners in Korea, foreign video game companies that are required to designate a local representative may find it efficient to appoint their Korean subsidiary or affiliate entity as the local representative if the Korean entity has been established by the foreign company or is subject to the foreign company's control in terms of the governance structure. Alternatively, designating a law firm such as Yulchon as the local representative may be advantageous, considering that it cannot only serve as the legal representative but also provide comprehensive advisory services including various regulatory compliance support under the GIPA, the Personal Information Protection Act, and other laws applicable to the provision of game services in Korea.
The foreign business entities engaged in video game-related business that have designated a local representative must include the name of the local representative (if the local representative is a legal entity, the name of the entity and its representative), address (if the local representative is a legal entity, the place of business), phone number, and email address in their terms of service.
In addition, the designated local representative is obligated to maintain valid means of communication with the video game publishers or providers (i.e. foreign video game company). Therefore, the foreign video game company is required to maintain a communication channel with its local representative.
Foreign video game companies may designate one or multiple local representatives, and a single local representative may act on behalf of multiple foreign video game companies. If a foreign video game company has designated multiple local representatives, it must disclose relevant information regarding all designated local representatives in its terms of service. In the event of any change in the designated local representative(s), the foreign video game company must immediately reflect such change in its terms of service.
D. Penalty for Non-Compliance with Obligation to Designate Local Representative The
Enforcement Decree Amendment newly establishes Article 23(1)6, under which the M CST delegates to the Video Game Rating and Administration Committee the duty to monitor violations of the obligation to designate a local representative under Article 31-2 of the GIPA, in addition to other delegated duties under Article 42(2) of the GIPA. Accordingly, it is expected that the Video Game Rating and Administration Committee will be responsible for carrying out the practical matters such as supervision and inspection for violations of the obligation to designate a local representative.
In addition, if a foreign video game company is found, through the supervision and inspection by the Video Game Rating and Administration Committee, to have violated the obligation to designate a local representative, it may be subject to an administrative fine of up to KRW 20 million in accordance with newly established Article 48(1) of the GIPA, as amended on October 22, 2024.
3. Impact on the Domestic Game Industry
The local representative designation policy under the GIPA is expected to help prevent or remedy damages suffered by domestic game users. Previously, even if domestic game users faced problems including property damages, it was difficult to impose sanctions for the violations of game laws and regulations (e.g. penalties, corrective orders, or recommendations for correction) in an efficient manner, because there was no way to verify the address or contact information for these companies. By requiring foreign video game companies to designate a local representative, the policy aims to ensure compliance with various legal obligations associated with servicing video games in Korea.
Furthermore, this policy is expected to help establish a fairer environment across the game industry by promoting regulatory equity between domestic and foreign video game companies. While domestic game companies have been subject to various obligations – such as disclosing information on loot box-type items, implementing user protection measures, providing refunds or withdrawal for paid content/products, and complying with various licensing and reporting requirements – foreign companies will now be subject to the same regulations.
However, there are still concerns that the local representative designation policy may not be as effective in protecting domestic game users as intended. The criteria outlined in the Enforcement Decree Amendment such as "annual sales turnover of KRW 1 trillion or more" and "monthly average domestic users of 100,000 or more" are relatively high. As a result, few foreign video game companies are expected to meet such criteria and become subject to the regulation1). Furthermore, issues causing significant harm to domestic game users, such as unilateral termination of game services without refunds, failure to disclose refund policies or refusal of refund requests, are primarily observed among small and medium-sized game companies servicing mobile games rather than large video game companies.
Therefore, all stakeholders in the game industry need to continue paying close attention to how the contents of the Enforcement Decree of the GIPA will ultimately be finalized and implemented. In this process, domestic video game companies should consider how to voice their opinions to ensure regulatory equity between domestic and foreign video game companies, while domestic game users should seek ways to ensure that the local representative designation policy under the GIPA becomes an effective policy for user protection. Meanwhile, foreign video game companies should prepare to designate a qualified local representative in accordance with the implementation of the local representative designation policy under the GIPA, identify their legal responsibilities and obligations such as the obligations to disclose information on loot box-type items and various reporting requirements, and take thorough measures to ensure compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
