LINE Games, the local gaming subsidiary under Japan’s LY Corporation, is struggling to overcome chronic financial distress and has initiated a voluntary redundancy program for its entire staff.

On the 3rd, LINE Games announced via an internal memo that applications for voluntary retirement will be accepted across all job functions until the end of this month. Those whose applications are approved will receive three months' salary along with additional career transition support, marking the beginning of a significant workforce reduction and structural overhaul. Industry analysts view this as an unavoidable move following years of deteriorating performance and capital shortages.

LINE Games has been in a long-term management crisis, recording losses for eight consecutive years since 2017 and falling into a state of capital impairment. Last year’s revenue plummeted by 22.9% year-on-year to just 33.5 billion KRW, with an operating loss of 48.4 billion KRW. The IPO, which the company had been pushing for since 2022, has effectively collapsed due to the failure of new titles and widening deficits; the company has been in a state of complete capital impairment since 2023.

The primary culprits behind this dismal performance are the declining revenues of legacy titles and the underwhelming reception of new releases. Specifically, earnings from 'Uncharted Waters Origin' and 'The War of Genesis Mobile' have seen a natural decline, while other mobile projects have failed to make a dent in the market, further exacerbating the financial woes.

Meanwhile, whispers have been circulating throughout the industry regarding a potential merger with Kakao Games following the recent acquisition by LAAA Investment, an investment vehicle backed by LY Corporation. Speculation gained traction because LY Corporation is a major shareholder in Kakao Games, and Kim Tae-hwan, a former vice president at LINE Games and former vice president at Nexon Korea, was recently appointed as co-CEO of Kakao Games. Both sides, however, have drawn a line, stating that nothing concrete has been decided.

A spokesperson for LINE Games stated, "LINE Games is currently undergoing a restructuring of its business and management strategies under a new leadership team. We have determined that it is necessary to consolidate our resources and capabilities to better navigate this hyper-competitive market and refocus our efforts on core business areas. As we transition toward this new direction, we are conducting this voluntary redundancy program to fully respect and support those who may wish to find a new path for themselves."