Korea’s AI Framework Act Takes Effect: Impact on the Games Industry
On January 26, 2026, the Framework Act on the Development of Artificial Intelligence and Establishment of Trust (hereafter, the AI Framework Act) took effect. This groundbreaking legislation aims to promote the AI industry while ensuring safety, anticipating significant changes in the gaming sector, where AI adoption is particularly active.
Duty to Label Generative AI Content
The most notable change for game companies arises from Article 36, which mandates a duty to label generative AI. This provision requires that any content produced using AI—be it text, images, video, or audio—must be clearly labeled. In the context of game development, this means that AI-generated content, such as NPC dialogue, character illustrations, or background music, must include a watermark or notice indicating its AI origin.
This regulation is designed to protect users’ rights to be informed and to prevent misuse, such as deepfakes. However, it raises concerns for developers regarding how to maintain player immersion. For example, a warning that an NPC’s dialogue was generated by AI could disrupt the fantasy experience for players.
Global Applicability and Local Representation
The AI Framework Act does not only apply to Korean game companies; it extends to international businesses as well. Article 4 stipulates that activities conducted outside Korea may still fall under the Act if they impact the Korean market or users. Furthermore, Article 39 requires overseas operators above a certain size to appoint a domestic representative in Korea. As a result, global platforms like Steam and Epic Games must comply with Korean regulations, including the labeling of generative AI content, to continue their services in the country. This provision also allows authorities to pursue legal action through the local representative in cases of violations.
Permit First, Regulate After
Interestingly, the Act is not solely restrictive. Article 6 introduces a “permit first, regulate after” principle, allowing individuals to research, develop, and release AI technologies without limitations unless specified by another law. This foundation encourages experimental AI adoption within the gaming ecosystem, facilitating innovations such as systems that learn user play styles for automatic difficulty adjustments or real-time generation of infinite maps.
Concerns for Smaller Studios
Despite the potential benefits, small and mid-sized game companies express concern over the costs associated with regulatory compliance. If advanced AI technologies are classified as high-risk AI (as per Article 2 and Article 33), companies may be required to implement various trustworthiness measures and fulfill extensive reporting obligations.
In light of these concerns, the government has indicated that early enforcement will focus more on guidance than punishment, aiming to allow the system to adapt naturally. The Ministry of Science and ICT (MSIT) has committed to providing consulting and support for companies navigating these new regulations.
Conclusion
With the AI Framework Act now in effect, the gaming industry stands at a crossroads, facing both opportunities for technological advancement and the responsibility of meeting elevated social expectations. The effectiveness of forthcoming detailed guidelines will likely hinge on their ability to accommodate the unique characteristics of the gaming sector.
