Why game publishers are investing in K-pop agencies
Krafton, the publisher of PUBG: Battlegrounds, is set to invest 100 billion won ($67.9 million) in The Black Label, according to a local media report Monday. The Black Label is home to artists such as Taeyang and Rose and has been involved in producing original soundtracks, including “Golden” for “KPop Demon Hunters.”
The move is widely viewed as part of Krafton’s diversification strategy, signaling its intent to move beyond games and secure intellectual property with long-term global value. For The Black Label, the investment offers a chance to secure substantial funding ahead of a potential initial public offering, while exploring collaborations that combine music, artists and game-based content.
A frequently cited precedent is the partnership between Netmarble and Hybe. Netmarble invested 201.4 billion won in Hybe roughly 2 1/2 years before its IPO in October 2020, betting on the global fandom power of BTS.
At the time, Netmarble sought to secure strong IP amid intensifying competition in the game industry, using BTS’ global reach to explore cross-media formats that combined games, performances and storytelling.
An entertainment industry official said Krafton’s move reflects broader challenges facing domestic game publishers. Recent weak earnings and a market downturn have pushed companies to seek new growth paths through entertainment partnerships.
“Game companies need entertainment IP to grow,” the official said. “K-pop, like games, is an export business, and collaboration helps expand markets and scale globally.”
According to the official, game publishers are less focused on building mass-market games entirely around K-pop artists, and more interested in leveraging artist recognition to strengthen existing game products overseas or explore adjacent businesses such as virtual concerts.
“K-pop helps games expand globally,” the official said, adding that virtual experiences, particularly VR concerts, have gained traction among younger audiences.
Cultural critic Lim Hee-yun said Krafton appears to be looking for a breakthrough similar to what Netmarble once found in Hybe, especially as the game industry struggles to sustain growth.
“People from the game industry are good at managing fandom-based consumers,” Lim said, noting that The Black Label’s involvement in projects like “KPop Demon Hunters” may have made it an attractive partner for IP-driven collaborations.
From Krafton’s perspective, Lim added, the investment reflects an attempt to broaden future revenue streams by entering an adjacent industry with similar content-driven structures.
“Developing games and virtual artists together could create synergy between game users and K-pop fans,” he said.
Still, industry insiders caution that such investments are often seen as short-term momentum plays rather than long-term strategic shifts.
“Entertainment IP has strong ripple effects, which is why game companies are drawn to it,” an official from a game publisher said. “This isn’t about games versus entertainment, but about alliances within the broader content industry.”
The official added that entertainment companies are also increasingly eyeing games as a way to diversify revenue, as conventional music and artist-driven businesses no longer guarantee stable growth.
“K-pop IP can help sell game-related content like character skins,” the official said. “But games built around artists have clear limits. They tend to target niche audiences rather than becoming mass-market hits.”
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