South Korea's Game Industry Faces Decline, Demands Tax Relief

South Korea's once-thriving game industry is reportedly in decline, prompting urgent calls for government support through tax incentives. Experts argue that games, a significant driver of content exports, are being unfairly excluded from tax benefits that support other cultural sectors.

Chae Jong-seong, head of the tax response team at Yulchon Law Firm, emphasized this point at a recent game forum. He noted that while many countries integrate support for games within a broader intellectual property (IP) framework encompassing film, drama, webtoons, and animation, South Korea's approach isolates games. This exclusion, he contends, hinders the industry's competitiveness and its potential for global success.

The current legal framework, specifically Article 25-6 of the Restriction of Special Taxation Act, offers tax credits for video content production. This includes films, documentaries, and animations, with webtoons having been added to this list earlier in the year. However, the omission of game production costs from these deductions is a point of contention for industry stakeholders who see it as a critical oversight.

“

Games are a key industry driving content exports, but they are thoroughly excluded from production cost tax credits. The country's content support system, divided by genre, needs to be re-examined from an IP industry perspective.