Securing intellectual property (IP) and advancing artificial intelligence (AI) technology have emerged as core business strategies in Korea's gaming industry, intensifying research and development (R&D) investment competition. Notably, Netmarble (251270.KS), which is rolling out a wave of new titles this year, spent more on R&D than any other major game company.
According to data from the Financial Supervisory Service's electronic disclosure system on the 29th, Netmarble's consolidated R&D expenditure reached 616.4 billion won in 2025, the highest in the gaming industry. Having achieved record earnings last year, Netmarble devoted 21.74% of its total revenue of 2.8351 trillion won ($2.1 billion) entirely to R&D. The increase is attributed to rising development costs tied to a large number of new titles in preparation. The company plans to solidify profitability by sequentially launching a total of eight new titles this year, including the AAA title "The Seven Deadly Sins: Origin" and "Sol: Enchant," scheduled for release on the 24th of next month. Analysts say massive labor costs were invested, as the company has adopted a "well-made" strategy emphasizing gameplay quality alongside sheer volume.
The shift toward AI-driven development environments is another major factor behind rising R&D costs. Netmarble is building a development environment that uses AI to handle in-game voice generation, new character creation and background image production. Although the initial deployment of high-performance graphics processing units (GPUs) required significant spending, the company aims to boost operational efficiency and ultimately reduce development costs. "We continue research that applies the latest AI technology across the entire development process to simultaneously enhance work efficiency and user experience," a Netmarble official said.
Krafton (259960.KS), the most aggressive adopter of AI among Korean game companies, spent 612.3 billion won (18.4% of revenue) on R&D last year, closely trailing Netmarble. Krafton's R&D spending has risen steeply each year, from 402.9 billion won in 2023 to 538.7 billion won in 2024. Research staff at the AI division — expanded and reorganized from the deep learning unit in October last year — nearly doubled from 80 to 150 within a year. Costs also surged as the company pushed to convert its flagship IP "Battlegrounds (PUBG)," now in its ninth year, to photorealistic graphics based on Unreal Engine 5 to sustain long-term success. "This year, we plan to discover big franchise IPs and continue expanding global strategic investments and collaborations," the company said.
Pearl Abyss (263750.KS), which released "Crimson Desert," this year's most talked-about title, invested 128.6 billion won in R&D. That represents 35.2% of revenue, the highest ratio in the gaming industry. NCSoft, long regarded as a technology powerhouse, posted R&D spending of 325.2 billion won last year, down from 421.8 billion won the previous year. However, the decline is largely an optical illusion stemming from the spinoff of four subsidiaries — including NC AI and game development studios — into independent entities in February last year, which reduced headcount at the parent company.
Nexon, Korea's largest game company by revenue, recorded R&D expenditure of approximately 249.9 billion won (26.429 billion yen). However, since Nexon is listed on the Japanese stock exchange, differences in accounting standards make direct comparisons with domestic peers difficult. Possessing IPs with overwhelmingly longer life cycles than its competitors, Nexon is currently focused on developing next-generation titles that expand the universes of popular franchises such as "Dungeon & Fighter" and "Mabinogi."
"The game development environment is rapidly shifting toward AI-based automation, and competition to secure premium IPs targeting the global market has also heated up," an industry official said. "Game companies' R&D spending is expected to continue growing going forward."