1.

Relaxation of Duty to Report Content Revisions

The current GIPA permits a business entity to make only an ex post facto report on any content revision within 24 hours after such revision. The Rating Rules of the Game Rating and Administration Committee (the “GRAC”) require game companies to roll-back and provide pre-revised versions to users for “any contents of which revision report was rejected,” which is usually referred to as “roll-back obligation.” Since only an ex post facto report can be filed under the current GIPA, the game service providers, and to some extent, the players, bear the risk of the GRAC rejecting the report and having to roll back the already-implemented content revision.

The Enforcement Rule of the GIPA already excludes “technical supplementation or improvement” of games from the scope of the content revision reporting requirement. However, there is no clear guideline or interpretation on the scope of “technical supplementation or improvement,” and furthermore, “description of game content revision” in the report actually lists “correction and revision of bugs and game balance” as an example of “content revision.” Therefore, in practice, the technical supplementation or improvement exemption has not been widely used.

In order to resolve such problems, the Proposed Amendment seeks to (i) explicitly permit prior reporting (Article 21, Paragraph (5) of the Proposed Amendment), and (ii) exempt “minor matters,” such as content revision that clearly do not affect the existing rating, from the reporting requirement, while requiring specification of “minor matters” in the Enforcement Decree (proviso to Article 21, Paragraph (5) of the Proposed Amendment). In this regard, the National Assembly’s review report related to this issue provided some examples of “minor matters.” For example, the report suggests that (i) some changes to game characters and the simple addition of items, and (ii) ad-hoc updates for errors and bugs should be minor matters. However, we will need to see the future amendment to the Enforcement Decree of the GIPA to confirm the actual scope of minor matters.

However, the exemption for “minor matters” does not apply to arcade games, and games involving betting or distribution of winnings, casino simulation games and other games falling under each Sub-item of Article 2, Item 1-2 of the GIPA (collectively, the “Speculative Games”) (Article 21, Paragraph (6) of the Proposed Amendment). We understand that even minor matters should be scrutinized because there are concerns about the inherent speculative nature of arcade games and Speculative Games.
 

2.

Relaxation of Requirements for Designation of Self-Rating Business Entities, Expansion of Period of (Re-)Designation
 
The Proposed Amendment will delete the requirement of the “adequacy of the plan to contribute to the development of the game industry and the creation of a sound game culture” among the matters to be reviewed when designating a self-rating business entity (Article 21-2, Paragraph (1) of the Proposed Amendment). Currently, when applying for a self-rating business entity, such entity is required to submit both (i) the business operation plan and (ii) the contribution plan, but after the enactment of the Proposed Amendment, the contribution plan would no longer be needed.

Another requirement for designation of a self-rating business entity is that such entity must have generated average “sales” over a certain threshold amount (currently KRW 10 million) during the past three years, but this requirement will be partially relaxed by amending the “sales” to “sales or capital” (Article 21-2, Paragraph (2) of the Proposed Amendment).

Also, the period of (re-)designation of self-rating business entities will be extended from “within three years” to “within five years” (Article 21-6, Paragraph (2) of the Proposed Amendment).
 

3.

Other Amendments
 

(1)

Expansion of the role of private rating agencies in rating games

Under the GIPA, games can be rated by either (i) the GRAC, (ii) a private agency entrusted by the GRAC (i.e., currently, the Game Content Rating Board) or (iii) self-rating business entities. Private agencies are currently allowed to rate games that would not receive a 19+ rating, but the Proposed Amendment will expand the scope of work of private agencies to include potential 19+ games.

However, arcade games and Speculative Games will still be required to be rated by the GRAC only.
 

(2)

Prohibition of business closure upon detection of an illegal act

There have been issues in certain cases where a game service provider files a business closure report (i.e., closes down the business and returns game business licenses) to avoid receiving administrative sanctions for a violation of the GIPA. In order to prevent such circumvention, the Proposed Amendment seeks to prohibit a game service provider from filing a business closure report while the administrative sanction procedure is taking place.