The Challenges of P2E Games and Government Intervention

The Challenges of P2E Games and Government Intervention

In recent news, the Ministry of Culture, Sports, and Tourism (MCST) announced the establishment of a permanent consultation body, including game companies, for discussions on Play-to-Earn (P2E) games. This initiative aims to coordinate discussions between the MCST and relevant government departments. The consultations have taken place three times so far, with the initial meeting involving only the Financial Services Commission. From the second meeting onwards, the Ministry of Economy and Finance, Ministry of Justice, Ministry of Science and ICT, Financial Supervisory Service, Bank of Korea, academia, and legal professionals have participated. The MCST focused on discussing issues related to regulating virtual assets, global legislation trends, and sharing information. It is worth noting that the ongoing study on improving and promoting the gaming industry, led by the Office for Government Policy Coordination, is separate from the MCST's discussions on P2E games.

However, the implementation of Google's greedy policies and the peculiar intervention efforts by the government are the key issues at hand. In February of this year, the MCST announced the "In-App Commission Authority Amendment." The amendment procedure for collecting music royalties is defined by law. It involves the collection society proposing the amendment, seeking approval from the MCST, gathering opinions from relevant stakeholders, and receiving deliberation from the Korean Copyright Commission. Finally, the MCST grants approval. However, the recent amendment to the royalty collection procedure was not followed. There was no proposal from the collection society, nor did they apply for approval from the MCST. Despite this, the government stepped in to protect the global giant platform, Google, and proposed a solution that shifts the burden of losses to copyright holders and consumers. To illustrate, if music consumers were paying 10,000 won per month for streaming services, 3,500 won went to platforms like Melon, and 6,500 won was distributed to copyright holders. However, Google intends to charge an additional 15% in-app payment commission for music transmission. If the commission is calculated based on revenue, 1,500 won out of the 3,500 won would go to Google. Music streaming providers like Melon have requested that the in-app payment commission be deducted from the revenue. The MCST accepted this request, but Google seems unwilling to comply with the law. Surprisingly, the MCST also appears to disregard the law. Copyright is undeniably intellectual property, and the regulation of royalties should respect the copyright holder's independent decision. However, the decision made by the relevant government agency to exercise its authority violates the principle of proportionality guaranteed by the Constitution. Furthermore, such a decision only results in the formalization of the law without preserving its essence or significance. It is difficult to trust a government that behaves in this manner.

From these discussions, it is evident that the challenges surrounding P2E games and government intervention are complex. To navigate this landscape, here are three actionable pieces of advice:

1. Foster Collaboration: It is crucial for the MCST and relevant government departments to collaborate effectively with industry stakeholders. By involving all parties in the decision-making process, a more comprehensive and balanced approach can be taken.

2. Uphold Legal Procedures: The MCST should ensure that all regulatory amendments follow the proper legal procedures. This includes seeking proposals from relevant parties, evaluating stakeholder opinions, and obtaining approval from the appropriate authorities. Upholding the rule of law is essential for maintaining trust and fairness.

3. Protect Intellectual Property Rights: The MCST must prioritize the protection of intellectual property rights. Any decisions or interventions should respect the rights of copyright holders and maintain the integrity of copyright laws. Balancing the interests of all parties involved is crucial for a sustainable and thriving gaming industry.

In conclusion, the establishment of a permanent consultation body for P2E games and the challenges of government intervention highlight the need for careful consideration and collaboration. By fostering open dialogue, upholding legal procedures, and protecting intellectual property rights, a fair and prosperous gaming ecosystem can be achieved. It is essential for all stakeholders, including the government, industry, and consumers, to work together towards sustainable growth and innovation in the gaming industry.