South Korea punishes game companies for lootboxes with ₩1 Billion Won ($945,200 US Dollars) in fines

With governments around the world finally picking up the slack on their tech knowledge and holding corporate giants accountable for data breaches as well as predatory, anti-consumer practices, South Korea joins the United Kingdom, United States of America, Belgium, and Australia in educating their politicians and going after those tech companies which abuse their power.

An investigation has began to expand in the video games sector of corporate crime as reported by outlets in the sovereign nation just south of the famous conflict zone and they aren’t taking lightly to lootboxes in which players wager money against a desired outcome.

Although the inherently bias, and conflict-of-interested plagued ESRB has labelled lootboxes as “not gambling” and refused to comply with US government officials demanding more transparency about in-game odds and parental advisory warnings, South Korean officials like many countries outside of US have already began the financial punishment process for these predatory practices.

South Korea’s Federal Trade Commission has fined a number of well known game companies such as Nexon a combined total of over₩1 Billion Won (equaling around $945,200 US Dollars). These punishments, according to the SK FTC, are specifically due to the use of lootboxes in video games.

Some examples of how the practice is found to be anti-consumer includes the SK FTC pointing out some lootbox scenarios presented by Nexon in which players had less than a 0.05% chance of receiving the advertised reward through purchase of a ₩900 Won ($1 USD) lootbox meaning that in reality ₩18,000 Won ($16.87 USD) would be needed for each lootbox to actually stand a good chance at gaining the advertised item.

Often times, this still didn’t occur. 16 advertised items were the subject of this example meaning that ₩288,000 Won ($269.95 USD) would be required spending to ensure a good chance at gaining the complete set of items, which offered significant gameplay advantages. SK FTC even reveals individual cases in which some players had spent ₩460,000 Won ($431.18) just to achieve the set of items being advertised as a harmless ₩900 Won ($1 USD) gamble.

Nexon is perhaps the most well known company involved in this evolving story, but not the worst offender named by SK FTC. Netmarble Games was accused of having sold an in-game “invincible monster” through lootboxes that only had a 0.0005% chance of actually giving out the advertised monster. Players were told that it simply had a “1% chance” of dropping, and that’s only because of government regulations recently requiring odds to be disclosed for gambling-like video game items in South Korea. Both Nexon and Netmarble Games are appealing these fines rather than paying them and that certainly shows gamers that the anti-consumer approach of both companies was no accident and will continue to be a problem worldwide wherever governments allow it.

[Some Info Sourced: Korea Herald via YongYea]

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