On April 24, 2025, the Ministry of Culture, Sports and Tourism (“MCST”) announced the draft amendment (“Draft Amendment”) to the Enforcement Decree of the Game Industry Promotion Act (“GIPA”), setting forth the criteria for overseas game businesses becoming subject to the domestic agent designation requirement. On the same day, the MCST also announced the draft Guidelines on Designation of Domestic Agents (“Draft Guidelines”) in both Korean and English (Link and Attached).
Both the Draft Amendment and Draft Guidelines are a follow-up measure to last year’s amendment to the GIPA itself (please see our previous newsletter: Link), introducing an obligation to designate a domestic agent on certain overseas game businesses. Those overseas game businesses that meet the threshold set in the final amended Enforcement Decree of the GIPA, must designate a domestic agent by October 23, 2025 when the domestic agent system comes into force.
According to the Draft Amendment:
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An overseas game business must designate a domestic agent if one of the following criteria is met:
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(i) |
It has generated worldwide sales of KRW 1 trillion or more in the previous year; or |
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(ii) |
It distributes or services any game with an average monthly number of Korean users of at least 100,000 during the three months immediately preceding the end of the previous year (i.e., October to December); or |
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(iii) |
There has been, or is likely to be, an incident or accident that causes significant harm to the users of its game. |
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Even if one of the above criteria is met, a person “who enters into an intermediary contract with a game business and distributes games or provides game usage services through a telecommunication network” will be excluded from the domestic agent designation requirement. While the wording of the Draft Amendment is somewhat unclear, according to the Draft Guidelines, this wording is meant to clarify that app market operators are not subject to the domestic agent designation requirement.
In addition to providing more specificity to the domestic agent designation requirement, the Draft Amendment provides that the Game Rating and Administration Committee will establish and operate the User Harm Relief Center to support the users who are harmed by game service providers’ violations of the obligation to disclose loot box drop rates. The User Harm Relief Center will provide seven types of user support, including: (i) receiving, and providing consultation on, reports of damages to the users, (ii) investigating the matter and collecting opinions from related parties, and (iii) developing relief measures and providing legal support to the users.
Companies may submit opinions, if any, on the Draft Amendment and the Draft Guidelines by June 4, 2025. In addition, as the deadline (October 23, 2025) is approaching, it would be advisable for companies to start considering how to comply with the domestic agent designation requirement. For reference, the Draft Guidelines recommend designating (i) the Korean subsidiary, or (ii) a Korea-based affiliate company on which the overseas game business exercises control over the composition of executives or business operation, as the domestic agent.
Attachment Guide to the Domestic Agent Designation System under Game Industry Promotion Act.pdf
