Korean games earn billions abroad but lose spotlight to K-pop

SEOUL, March 11 (AJP) - South Korea's video game industry is quietly generating billions of dollars overseas, yet publishers say it remains overshadowed by the global success of K-pop and film while facing heavier regulatory and financial burdens at home.

Once the flagship sector of the country's "K-content" boom, game developers complain they struggle to gain global attention or policy support despite remaining the largest content export industry.

Games accounted for 60.4 percent of South Korea's total content exports in 2024, generating about $8.5 billion, exceeding the combined overseas sales of music, film, television and advertising, according to industry data. The 2025 export data are yet to be published.

Domestic revenue reached roughly 23.8 trillion won ($16.2 billion).

Yet the industry says it receives little institutional backing.
  Game production is notably absent from South Korea's content production tax credit framework, a gap lawmakers and trade groups have increasingly criticized.

At a National Assembly forum Tuesday hosted by the Korea Association of Game Industry (K-GAMES), developers and policymakers pointed to the widening disparity with other cultural sectors.

Film and television productions receive tax credits of up to 30 percent, while webtoon creators qualify for 10 to 15 percent incentives.

Game developers receive no comparable support, even though 86.4 percent of Korean game companies employ fewer than 10 people, leaving most unable to meet the threshold for existing R&D tax credits.

"Triple-A titles now routinely cost more than 1 trillion won to produce," said Culture Minister Chae Hwi-young.

"National-level institutional support is more urgent than ever."
  The contrast is even sharper overseas.

Britain offers a 34 percent tax credit on core game production costs, Canada reimburses up to 37.5 percent of labor expenses, and Japan allows companies to deduct 30 percent of qualifying intellectual-property income under its tax regime.

Regulatory pressures are also rising.

South Korea's Framework Act on Artificial Intelligence, which took effect in January, requires AI-generated content to carry disclosure labels. The game industry has opposed a proposed amendment that would introduce additional disclosure rules, warning the overlap could create regulatory confusion.

Platform economics remain another sticking point.

Google announced on March 4 it would lower its Google Play commission from 30 percent to a maximum of 20 percent, but the change will not take effect in Korea until December — six months after implementation in the United States and Europe.

Apple continues to charge commissions of up to 30 percent through the App Store.

According to K-GAMES, Korean developers paid an estimated 9 trillion won in platform commissions to the two companies between 2020 and 2023.

Industry concerns come as financial pressures mount across major publishers. NCSoft reported revenue falling 5 percent last year despite launching Aion 2, while Kakao Games posted its first annual operating loss since listing.

Pearl Abyss recorded a 14.8 billion won loss amid a prolonged content drought, and Krafton saw operating profit fall 10.8 percent despite record sales.

Meanwhile Nexon logged roughly 4.5 trillion won in annual revenue, but operating income barely increased.

A wave of project shutdowns has compounded the industry's difficulties.

Extraction shooter Dungeon Stalkers will close on June 9 just seven months after launch, while NCSoft ended service for Blade & Soul Heroes in February and plans to shut down global services for Blade & Soul 2 in June.

Critics say the industry's own strategy has also contributed to the slowdown.

"Many game executives come to us saying 'this type of game makes money' rather than asking what makes a good game," said Im Chung-jae, professor of game software at Keimyung University.

"For years the industry has focused on a narrow business model built around a small group of heavy-spending users."

Despite the setbacks, major titles scheduled for release in 2026 are raising hopes for a revival.

Pearl Abyss is preparing to launch the open-world blockbuster Crimson Desert, while Nexon's Arc Raiders and the globally acclaimed indie hit Dave the Diver have already demonstrated the international potential of Korean studios.
  Other successes — including Shift Up's Stellar Blade and Neowiz's Lies of P — suggest Korean developers can compete globally when they move beyond established formulas.

Im said the industry ultimately needs broader recognition and greater creative diversity.

“If companies adopt a longer-term philosophy and expand their genres, solutions will emerge,” he said. “The industry must be structured so it can ride whatever cycle comes — and right now, with such a narrow spectrum, it cannot.”

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