By Jenny Lee ( May 15, 2025, 08:01 GMT | Insight) -- Game companies using generative AI — whether in development or gameplay — are likely to face regulation under South Korea’s new AI framework law, set to take effect in January. According to a legal interpretation provided to lawmaker Kang Yu-jung, such games would likely be classified as “AI products,” placing developers in the category of “AI business operators” and subjecting them to transparency obligations under the law.Game companies that leverage generative AI in their content — whether during development or gameplay — could find themselves broadly subject to regulation under South Korea's new AI framework law, set to take effect in January next year. A legal interpretation provided to lawmaker Kang Yu-jung by the National Assembly Research Service, or NARS, suggests that games utilizing generative AI are highly likely to be classified as “AI products” under the Basic Act on the Development of AI and the Establishment of Foundation for Trustworthiness. This classification could bring game developers under the category of “AI business operators,” subjecting them to a range of transparency requirements laid out in the law. The legislative opinion draws a clear line between three distinct uses of generative AI in games: those with AI models embedded directly into the game system; those that rely on API connections to external generative AI models to deliver in-game content; and those that include AI-generated content, such as text, images, voice or video, produced during the development process. — AI product or not? — Under Article 2 of the framework law, any product that uses AI or AI-related technologies is defined as an “AI product,” while “AI services” encompass activities such as development, manufacturing, distribution or operational use of such technologies. Companies involved in these areas, categorized as AI business operators, are further classified either as “AI developers,” those who build and supply AI systems, or as “AI business users,” those who incorporate AI developed by others into their own offerings. According to NARS, the first type of game — those with embedded generative AI models — clearly falls within the law’s definition of AI products. Businesses that offer these games could be categorized as AI business operators, and if they developed the embedded model themselves, they would be further classified as AI developers. The second type, games that generate content through API access to external AI models, are treated similarly. These too could be regarded as AI products under the law, and those who provide them could also be subject to the same regulatory classification. Even for the third type, when generative AI is not integrated into gameplay but is used during development to produce in-game content, regardless of later human edits, the game may still be considered an AI product depending on how significantly those AI-generated elements shape the final product. Companies distributing such games may likewise be considered AI business operators and held to corresponding regulatory standards. — Transparency obligations loom — For all three types of games, Article 31 of the framework law is expected to impose transparency obligations on AI business operators. These obligations apply only when generative or high-impact AI systems are involved. They include: providing prior notice to users that AI is being used; clearly labeling the use of AI in the product or service; and, in cases where the AI generates content, such as audio, visuals or video, that could be mistaken for human-created material, ensuring users can readily identify that the content was produced by an AI system. The legislative interpretation confirms that these requirements extend to various types of AI integration. In multiplayer games, for example, if characters interact with users using generative AI — regardless of whether the AI is embedded directly in the game or accessed via an external API — the game is considered an AI product and subject to Article 31. The same holds for games that allow users to create or insert content, such as text, images, 3D models or voice, using generative AI tools, whether built into the game or integrated via API. For games that rely on conventional, non-generative AI — systems that operate strictly within pre-set parameters — Article 31 typically does not apply. However, if this type of AI is used to deliver targeted ads or content and is classified as high-impact, providers may be required to give prior notice, although labeling is not mandatory....