[Shocking Remarks by OTK Company Vice President!]
[Are Domestic Game Companies Really Moving Overseas?]
[Just Empty Threats, Little Chance of Happening]
[Minister Shin Jeon-mi: OTK Company VP Must Take Responsibility for Remarks]
[MOGEF Affiliate, Gender Equality Activity Promotion Center: Cannot Contain Anger at Game Industry's Threatening Remarks...]
[Ministry of Gender Equality and Family: Will Take Strong Legal Action Against Articles and Comments Harming Gender Equality, Following Guidelines]
The government, including the Ministry of Gender Equality and Family (MOGEF), and public opinion initially regarded the OTK Vice President's remarks as empty threats with little chance of realization.
However, they said this because they didn't truly know Oh Taekgyu.
Under OTK Company's leadership, the domestic game companies moved in an orderly fashion. Around 30 companies, including the five major ones, began reviewing specific timelines and methods for separating their Korean operations and relocating their headquarters overseas.
It's impossible for all personnel to leave Korea immediately. However, separating development and services into subsidiaries and moving the holding company abroad is entirely possible.
To this end, they decided to hold shareholder meetings and, concurrently, submit letters of intent for delisting to the stock exchange.
Normally, such actions would be met with shareholder resistance. However, the situation was different this time. Due to the MOGEF's hardline stance and concerns about the game regulation bill, game company stock prices were plummeting.
If the bill truly passed, forcing them to pay 1 percent of revenue as a levy and up to 5 percent as a fine, their net profits would plummet, or they would face deficits. Consequently, shareholders wholeheartedly approved the overseas relocation.
The announcement of the game companies' collective move immediately sent shockwaves through the economy and stock market.
There's no real porn industry in Korea to begin with. Therefore, tightening regulations has no impact on the industry, other than making illegal downloads harder.
However, gaming is already a crucial pillar of the IT industry. That's why companies like Npple, Gooble, Facenote, and Microsoft don't hesitate to invest heavily in the gaming sector.
The areas where game companies are clustered, like Pangyo and Bundang, were thrown into chaos, and even nearby housing prices fluctuated wildly. Real estate agencies were flooded with inquiries from landlords.
In the Pangyo and Bundang real estate markets, buyer interest vanished instantly, and some even backed out of deals right before signing the contracts.
- It's an exodus lol. Just like Moses led the Israelites to the land of Canaan, the OTK Company VP is leading the game companies away.
- That's because the persecution was so severe. Where will they build their diaspora?
- Didn't President Heo Chang-min criticize the previous government's policies during his campaign and promise to foster gaming as a key industry?
- The government nurtures it as a core industry, but the MOGEF regulates it and collects money.
- It's like the nuclear phase-out. Korea phases out nuclear power but encourages nuclear reactor exports.
- So, what happens now? Are all domestic games shutting down service?
- It doesn't really matter. They'll likely offer services just like foreign games do in Korea now. And if the government tries to impose ridiculous regulations or collect money like this, they can just file a complaint with the WTO.
- Moving to the US solves everything. Korea gets to be a 'game-free country,' the US gets to foster its game industry and create jobs, and the MOGEF gets rid of the game industry. Win-win-win?
- Wow! The MOGEF must be so relieved.
- LOL, they wanted to summon the game companies, yell at them, and boss them around a bit, but the entire target of their regulations just disappeared.
- They tried to extort some money using regulation as an excuse. If all the game companies leave, who will they collect the levy from?
- Don't worry. They can just regulate webtoons and comics next. Change the 'Four Major Addictions' to 'Five Major Addictions' by including comics, and everything's solved.
- Next, they'll probably beat up Pororo and demand money~ ^^
- The MOGEF is capable of anything. Pororo is the next sacrificial lamb!
- Just wait. MOGEF-affiliated groups will start churning out studies claiming that watching Pororo damages the brain, increases violence, and reduces sperm count.
- Establishment of Pororo Addiction Healing Centers! Deployment of dedicated Pororo addiction teachers in every kindergarten!
- Seriously though, let's leave President Pororo alone ㅡㅡ;
***
The announcement of the mass exodus of Korean game companies caused a stir worldwide.
When cars made in country A are sold in country B, tariffs and value-added taxes are paid in country B. However, for software, including games, taxes are paid only where the corporation is registered, regardless of where the sales occur. This is why Npple and Gooble, which operate app stores, have spun off their app store operations into corporations based in Ireland, which has the lowest corporate tax rate in the EU.
In short, a country that attracts game companies can collect enormous tax revenues!
The competitiveness of the Korean game industry is well-known. Many games already have massive user bases, and there are numerous talented developers.
Attracting them could generate significant employment and added value. Offers poured in from various countries and cities.
Among them, Detroit was the most enthusiastic.
Detroit, as everyone knows, was the center of the auto industry. However, after Silicon Valley collapsed due to the 'Big One' (or perhaps a major auto event), and CarOS established itself there, it attracted related IT companies, forming a cluster.
Thanks to this, Detroit rapidly emerged not just as an automotive hub but also as an IT industrial complex.
When OTK Games decided to move its headquarters from Tokyo to Detroit to collaborate with CarOS, the city decided to take the opportunity and create a gaming cluster.
As Korean game companies showed signs of an exodus, even the Governor of Michigan and the Mayor of Detroit joined the effort to attract them.
"We will make Detroit the center of the game industry!"
"We are reviewing various support measures and tax benefits, and will provide dormitories and land free of charge!"
President Ronald didn't stay silent either. He immediately fired off a tweet.
[Welcome the move of Korean game companies to the US. Americans love games and know how to enjoy them. Most importantly, America doesn't have a Ministry of Gender Equality and Family!]
Since everyone knew why the game companies were leaving Korea, the last sentence was practically mockery.
***
From the government's perspective, if one or two companies announced relocation to avoid regulations, they wouldn't have batted an eye.
However, it's a different story if an entire industry makes a collective move. And OTK Company possessed the funds and influence to potentially relocate all domestic game companies overseas.
Consequently, the situation was too serious to be dismissed as just a boycott or empty threat.
In place of President Heo Chang-min, who was on a European tour, Prime Minister Ryu Jeong-hoon chaired a cabinet meeting.
Ministers from all departments attended without exception. Regarding the current crisis, all ministers, except the MOGEF Minister, expressed deep concern.
"While the manufacturing sector's profit margin is less than 10 percent, the game industry's profit margin exceeds 20 percent. It's that high a value-added industry."
"Games exported $8 billion last year alone. This year's export figures are already up over 30 percent compared to the same period last year."
"This is an industry growing at over 20 percent annually, and now it's about to move overseas entirely."
"What about the talent drain? Each game developer is a valuable national asset. If key personnel leave for foreign countries, the Korean game industry will become subordinate to foreign interests."
"Other countries are desperate to grow their game industries, does this make any sense? This incident is becoming a laughingstock overseas. It's a complete international embarrassment."
"The immediate loss of tax revenue is also a problem. If all the game companies leave, who will pay taxes?"
Even without citing the phrase 'It's the economy, stupid,' economic policy is paramount for any government. Ideology doesn't put food on the table, after all.
Korea was already grappling with a sluggish economy and rising unemployment. While this was more due to structural problems in the industry than the current government's fault, the government's inability to even begin addressing those structural issues was clearly a failing.
While industrial restructuring stalled, all ministries were desperately trying to boost employment rates.
So, what would happen if, in this situation, game companies left Korea en masse?
Decrease in exports, tax revenue loss, increased unemployment, drop in employment rates, talent drain, loss of industrial competitiveness, and so on. Above all, the biggest problem would be plummeting approval ratings.
Small game companies employ hundreds, large ones employ thousands. Direct employment alone accounts for tens of thousands, and considering related industries, it impacts hundreds of thousands of jobs!
What citizen would approve of significant economic losses caused by stubbornness and anti-corporate sentiment towards a specific sector?
While not all personnel would leave immediately, if the companies moved their headquarters, key talent would likely follow.
The Minister of Science and ICT spoke.
"Compared to our manufacturing competitiveness, Korea's software competitiveness is weak. If all the game companies really leave, Korea's software industry could collapse."
MOGEF Minister Shin Jeon-mi countered.
"What do games have to do with the software industry? Claiming the entire domestic industry will suffer just because the game sector leaves is illogical."
He shouted out of frustration.
"Do you think game developers only make games? Things like the Unreal Engine or script engines used in game production are all software! Game developers develop software, and software developers develop games. Seriously, if you don't know, just keep quiet!"
"..."
After the ministers finished speaking, Prime Minister Ryu Jeong-hoon spoke.
"Transfer the authority to regulate cultural industries from the MOGEF to the Ministry of Culture, Sports and Tourism (MCST). From now on, the MOGEF should focus solely on issues concerning women and families. And Minister of Culture, please contact the game industry and work towards resolving this situation amicably as soon as possible."
Minister Shin Jeon-mi was visibly shocked by his words.
"We cannot do that. The MOGEF absolutely needs regulatory authority to protect youth and women."
Losing his patience, Prime Minister Ryu Jeong-hoon shouted in an angry tone.
"The very target of regulation is about to disappear, so what use is regulatory authority!? You caused this mess by raising hell about killing off a successful industry, and you still have more to say? These are the President's orders. If you have complaints, take them directly to the President!"
***
After the cabinet meeting concluded.
The Blue House announced that regulatory authority over cultural industries would be consolidated under the MCST. The Minister of Culture immediately decided to meet with game company CEOs to listen to their difficulties.
This was an attempt, at least, to appease the game industry.
However, Minister Shin Jeon-mi, the very person who caused this crisis, faced no accountability and kept her position.
Netizens couldn't hide their astonishment.
- Wow! It makes no sense that she wasn't fired?
- Damn, not even a single word of apology.
- Why are they protecting Shin Jeon-mi so much? Does she have some dirt on them?
- Because she has strong support from women's groups~
- Why act surprised now? Did you vote for them without knowing this is how they operate?
- LOL, I'm dying. I didn't know it was this bad.
- She'll probably keep her seat until the administration changes.
- They shouldn't compromise half-heartedly! If left alone, she'll just cause problems again.
- We request a definitive response this time!
- Just tell them you're 'Escaping Joseon'~
Despite the government's announcement, the game industry refused all dialogue. Instead, they seemed to accelerate the process of corporate separation.
Previously, they wouldn't have been able to take such a strong stance.
But the situation changed after OTK Company stepped in. This wasn't just because OTK Company had immense wealth and influence.
The Vice President clearly understood the difficulties of the game industry and intended to continue supporting it. This was evident just from the creation of the OTK Awards.
The game industry, which had previously responded disjointedly and ineffectively to regulations, united strongly.
"The Vice President will handle everything! There's hope now, hope!"
"That's right. We've been living without hope for so long."
"Let's trust the VP and fight to the end!"
The government, which had expected the industry would naturally agree to talks upon being invited, was flustered. Minister Kim Guk-cheon (MCST) personally met with the OTK Company Vice President to persuade him. However, the response he received was firm.
"We are merely following Minister Shin Jeon-mi's wishes. She said the monk should leave if he dislikes the temple, so we're leaving. What's the problem? We'll completely uproot the Korean game industry, plant it abroad, nourish it well with plenty of chemical fertilizer, so don't worry too much."
"What should we do? If there's something you want, please tell us."
To Minister Kim Guk-cheon's question, Vice President Oh Taekgyu replied.
"Game development involves long hours and relatively low pay. Yet, everyone works late nights and weekends driven solely by the passion to create fun games. What exactly did they do so wrong? If you can't treat them well, the least you can do is not disrespect them. But a certain someone treated game developers as if they run gambling dens or manufacture drugs. Wouldn't it be difficult to have a dialogue while such a person remains in a key position?"
***
Although the Blue House applied pressure and criticism mounted even from within the ruling party, Minister Shin Jeon-mi refused to bend her opinion until the end.
Ultimately, in place of the MOGEF Minister, Prime Minister Ryu Jeong-hoon issued a public apology.
"I sincerely apologize to the game industry professionals and everyone hurt by the unreasonable regulations and harsh remarks. The government clearly recognizes that gaming is a proud Korean cultural industry and a core industry that will lead the future. Moving forward, we will actively reflect the opinions of the game industry for proper regulation and growth, and we will not spare government-level support."
President Heo Chang-min, still on his European tour, dismissed Minister Shin Jeon-mi via written order. Until a new minister was appointed, Vice Minister Cha Yoon-hye would serve as acting minister.