In the most recent attempt to seize control of what they refer to as the ‘social gambling industry,’ authorities in South Korea have pulled the plug on all Facebook games, making the games unavailable to residents of the country. In order to be allowed back into the market, developers will have to submit an application with the Game Rating and Administration Committee (GRAC) to have their product reviewed and rated.
The shutdown started on August 26th and initially blocked only financial transactions toward Facebook game operators, but quickly evolved into a full-fledged ban of all the games. That includes the highly popular Candy Crush Saga and Farmville, as well as the most popular social poker application – Zynga Texas Hold’em Poker.
Although the Committee promised that all applications will be reviewed within 15 days after submission, game marketers are currently losing a lot of money that would be coming their way from numerous dedicated players residing in South Korea and are also at risk of losing them to other platforms.
The move was initially directed at social casino games, which have been successfully circumventing Korea’s anti-gambling laws for quite some time, but turned into an all-encompassing action intended to bring all Facebook games in line with the Game Industry Promotion Act of December 2013.
The Act describes the process of rating games by a panel of nine people, placing them into four categories:
All – games that are suitable for all ages
12+ – not for minors under the age of 12
15+ – not for minors under the age of 15
Adult only – games that can only be played by adults and are not suitable for children or minors
In order for developers to get their games rated, they must not only submit an application but must also pay a fee. The new procedures happened very fast and without announcement, forcing game marketers to act swiftly in an attempt to control the damage.
A market report published earlier this year by Transparency Market Research indicates that the value of the social gaming market is expected to reach $17.4 billion by 2019. In 2012, the largest contributor in this market by region was Asia Pacific. The largest amount of revenue (60%) was created through the purchase of virtual goods.
Social networking bans in regions like the Middle East and China have already had a serious impact on potential revenue and this latest development will certainly have serious consequences as well, especially if the speed of processing application is not satisfactory – a scenario that is not unlikely at all.