Nexon Games CEO warns that Korean game industry is stagnating

(Yonhap)

South Korean game major Nexon Games Co. is raising the alarm about a looming crisis in the gaming sector. The company warns that all segments of gaming are now facing stagnation and that the golden time for Korean game developers to secure their future is rapidly running out.

“The window of opportunity will not stay open for many more years,” Nexon Games Chief Executive Officer Park Yong-hyun, who is also vice president at Nexon Korea Corp., said.

Park’s warning was delivered in a keynote speech he delivered at the Nexon Developers Conference (NDC) 25 that kicked off on Tuesday in Seongnam, Gyeonggi Province.

“PC, mobile, and packaged games are all either stagnant or in crisis,” he said. “If you look at Korea’s PC Room rankings, many of the top games were released more than 10 years ago.”

Although concerns about stagnation in the game industry are not new, what makes this particularly shocking is that it is Nexon – Korea’s leading game company that hit a historic high in 2024 revenue – that is issuing the warning.

Globally, the gaming industry has seen its explosive COVID-19 pandemic-era growth taper off significantly, and this trend is also evident in Korea. Game usage rates in the country peaked at 74.4 percent in 2022, then dropped steadily to just 59.9 percent in 2024.

While major players like Nexon and Krafton Inc. have managed to hold their ground, many mid-sized developers are facing increasing challenges while reporting operating losses or declining performance.

“In the mobile space, non-gaming apps like YouTube and TikTok are now out-earning game apps,” Park said.

This reflects a broader shift - mobile games are no longer just competing against each other but against all forms of short-form entertainment that are vying for users’ limited leisure time. In Korea alone, the average daily YouTube watch time among users was nearly 140 minutes earlier this year.

The recent surge of Chinese game developers into the mobile market is also emerging as a major threat, and for its part, the console market is becoming increasingly difficult due to soaring development costs.

“Development expenses are rising alongside user expectations,” Park said. “The Spider Man game series, for example, cost about 150 billion won ($110.7 million) to make in 2018 but that tripled to 450 billion won in 2023.”

As a solution, Park advocated for a bold shift away from Korea’s traditional game development formula while pushing for a strategy centered around globally competitive big games instead.

“Big games are not just large-scale titles,” Park said. “They are games capable of competing and winning against the global giants.”

He cited “Black Myth: Wukong” - a Chinese-developed game that sold 7.5 million copies outside China in 2024 - as an example.

Emerging developers in China and Eastern Europe are already producing results and some are preparing to go global with huge investments, according to Park.

“Korea is already a step behind,” he said. “But we still have advantages - like rich live service expertise and the global popularity of K-culture - that we must fully leverage.”

Park concluded by emphasizing that success will require more than just developing good games.

“We also need to completely rethink and globalize our marketing strategies,” he said.