Zeta gains traction in Japan, eyes US expansion

Zeta is a chat-based AI storytelling app developed by Korea’s Scatter Lab, where users role-play with fictional characters. (Scatter Lab)

Zeta, a Korean AI storytelling app developed by Seoul-based startup Scatter Lab, has rapidly gained traction in Japan and is now entering the US market through a closed beta.

The app ranked No. 1 among artificial intelligence entertainment platforms in Japan across daily, weekly and monthly active user metrics last month, according to analytics firm App Ape.

Launched in April 2024, Zeta allows users to co-create fictional narratives with AI-generated characters. The platform has attracted a young, highly engaged user base, with over 90 percent of its 1.5 million monthly active users in their teens and 20s.

Of that total, 1.1 million are in South Korea and more than 300,000 in Japan. In Korea, the app has consistently outperformed ChatGPT in total mobile usage time since June last year, despite a far smaller user base, according to data from WiseApp Retail.

The company says Scatter Lab’s success in Japan was achieved without major localization. The company is now targeting North America, where it expects stronger ad unit economics to support its "freemium" model.

The platform is powered by Spotwrite-1, Scatter Lab’s proprietary language model developed in-house to reduce inference costs.

Through November last year, the company reported 22.9 billion won ($15.6 million) in revenue and 2.6 billion won in operating profit.

“Every user interaction comes with an inference cost in generative AI, so an ad-supported model only works if users stay highly engaged,” said CEO Kim Jong-yoon. “That’s why we focus so heavily on fun."