After surviving a brutal recession last year, the South Korean gaming industry has finally managed to catch its breath in the first half of this year following some truly bone-deep restructuring. These companies have been casting a wide net for new strategies to claw back their performance, and it seems those efforts finally bore fruit in Q2. Having survived the storm, they are now armed with the kind of resilience that suggests they can handle future crises without breaking a sweat.

The standout performer in terms of raw numbers is Pearl Abyss, which saw a staggering 7,411% jump in operating profit. The launch of Crimson Desert back in March was the primary engine driving this quarter’s success. Since that release, Pearl Abyss has shifted its focus toward accelerating a development cycle that many previously criticised for being sluggish. The studio has explicitly stated that for upcoming titles like DokeV and Plan 8, they aim to keep a consistent release cadence of roughly two to three years. With DLC for Crimson Desert on the horizon and a faster update schedule for Black Desert, the developer looks set to avoid any further dead air.

Krafton, which has been performing well for some time, has finally found the key to shedding its reputation as a 'PUBG-one-hit-wonder'. While PUBG continues to grow, the release of Subnautica 2 in May pushed both revenue and operating profit to record highs for a first-half period. Krafton has spent years trying to expand its lineup through overseas M&A following the massive success of PUBG, though results were long in coming. Subnautica 2 wasn't without its own hurdles, but by proving they can launch a hit outside of the PUBG umbrella, the company has finally quieted the skeptics.

NCsoft, having crawled out of its slump in Q1 thanks to Aion 2 and Lineage Classic, found another ace up its sleeve in Q2. Following the acquisition of JustPlay in March, the company has leaned heavily into 'mobile casual games'. These started reflecting in their consolidated results in Q2, accounting for 22% of total revenue and playing a major role in the turnaround. Since the appointment of the co-CEO system featuring Kim Taek-jin and Park Byung-moo, NCsoft has been actively pivoting away from its heavy reliance on mobile MMORPGs, opting instead to bolster PC online titles and expand into casual, subculture, and shooter genres. The change in leadership is clearly paying dividends.

Nexon saw a 17% dip in operating profit for Q2 alone, yet when looking at the first half as a whole, it managed to hit record-breaking revenue and operating profit. Especially, MapleStory delivered its best-ever Q2 performance, with the original title remaining robust while additions like MapleStory Worlds and MapleStory Grow-up successfully turned the IP into a full-blown franchise. Notably, MapleStory Worlds is gaining traction as Nexon’s first successful implementation of a UGC (User Generated Content) model, allowing players to build games and share revenue much like Roblox, showcasing a fresh avenue for growth.

Among the mid-sized firms, Valofe is proving to be one to watch. Previously, the company was content merely to operate games inherited from others. Today, however, it has built a global publishing system on its own platform and is actively pursuing secondary business ventures—such as merchandise and animation—based on its title Last Origin. Thanks to these efforts, operating profit grew by 61.6% in Q2. With projects like Last Origin 2 currently in development, it is worth keeping a close eye on their trajectory.

Companies that struggled in Q2 have also found the building blocks for a potential recovery. Kakao Games is a prime example. Chronic deficits caused by a drought of new releases kept the company in the red through Q2. However, following the completion of its acquisition by Line Yahoo in June, the company transitioned to a co-CEO system under Kim Tae-hwan and Lee Si-woo, and plans to bounce back in Q4 with releases like DokeV's World and Odin Q: Valhalla's Call. If the management keeps their word—having stressed during the earnings call that these delays would be the last—we might finally see a turnaround by the end of the year.

Netmarble, which has long relied on a 'quantity over quality' strategy, saw its Q2 operating profit fall by 20.8%. While the flood of new releases from 2024 through last year kept things moving, the company now faces clear signs of fatigue across its lineup. Releasing many games is one thing, but with less time spent validating each title, they have begun to lose their edge and sense of novelty. In response, management has decided to trim their second-half lineup down to three titles to focus on internal stability—essentially taking a breather to prepare for a stronger leap forward.

Neowiz saw a 57.5% drop in Q2 operating profit as the momentum from the launch of Lies of P finally faded. In response, the company is doubling down under new leadership. Park Sung-jun, the head of the new title development group who led the global success of Lies of P, has been appointed as co-CEO to drive a recovery through new PC and console titles aimed at the global market. A successor to Lies of P is already in development, alongside several internal projects like the story-driven RPG Project Rubicon. The company is currently in the stage of internalising the structural improvements gained through Lies of P.

Shift Up, much like Neowiz, saw a 58.5% dip in Q2 operating profit as the Steam launch effect of Stellar Blade waned. Their new weapon of choice is self-publishing. Having focused solely on development since going public, the studio is now preparing to take on publishing duties starting with the next Stellar Blade project. While the cost of investment is unavoidable, if they can find a distribution strategy that highlights their unique strengths, they will secure a stable business structure that isn't beholden to external publishers.

NEXUS Co., Ltd. saw an operating loss of 5.3 billion won in Q2, and is pinning its recovery hopes on the acquisition of One Store. The company is integrating One Store into its existing blockchain gaming business—spearheaded by CEO Jang Hyun-gook—by launching an 'AI Games' tab this August. Through collaboration with Tencent, they plan to introduce top-tier casual games from China to the platform. The real question is whether they can leverage One Store as a key growth engine starting in Q3.

Several mid-sized firms are clearly in need of a more effective weapon to stage a comeback. Take Wemade, for instance. In Q2, the company saw revenue decline and only managed to keep operating losses lower than the previous year through drastic cuts to labour and marketing costs. While Chairman Park Kwan-ho has decided to sell his stake to the Chinese investment firm Neo Pulse, what happens to Wemade afterwards remains a mystery. We will need to monitor what is announced once the transfer agreement is officially finalised.

Com2uS saw a 420.7% increase in operating profit, though this was driven more by cost-cutting than by growth in the gaming business. While Summoners War and their baseball titles remain steady, the lack of any significant breakthrough in the MMORPG market—a space they have been trying to crack for years—is a notable disappointment. Whether their upcoming title, Zeus: God of Arrogance, arriving on August 26, can quench that thirst remains the key factor. The performance of their parent company, Com2uS Holdings, also hangs on Com2uS successfully pivoting to a hit MMORPG.

Gravity saw revenue fall by 5.2%, yet operating profit rose by 40.2%. Like Com2uS, this was purely a result of cost-cutting, with operating expenses down 33.2% year-on-year. Gravity continues to focus on servicing its numerous Ragnarok-based titles across the globe. What is particularly interesting, however, is their push to build 'Ragnarok Echo', a user-generated gaming platform. Whether they can achieve results similar to MapleStory Worlds is now their most important challenge.

Nexon Games achieved a swing to profit in Q2, but it was not due to improved earnings. A stock grant agreement for 2 million shares signed with CEO Park Yong-hyun in 2022 expired because the stock price failed to meet the necessary conditions. Consequently, the previously accrued stock compensation expenses were reversed, which had a massive impact on the operating profit. While the profit margin looks better, it is not a result of actual success in the gaming business, so it shouldn't be viewed through rose-tinted glasses.

Finally, Devsisters suffered a 42.7% drop in revenue and a swing to a 16 billion won operating loss in Q2, despite the March release of Cookie Run: Oven Smash. The company has banked heavily on the Cookie Run IP, launching countless titles and even expanding into TCGs, but they appear to have lost their ability to sustain long-term engagement. While they should keep the Cookie Run franchise at the core, they desperately need to find other avenues for growth, much like their competitors.

We have taken a look at the Q2 performance of major South Korean game companies and cast an eye toward the future. Some, like Krafton and NCsoft, have finally resolved long-standing issues and made significant leaps, while others like Kakao Games and Netmarble are undertaking massive strategic pivots to spark a recovery. While there is still room for improvement in some areas, we can confirm a slightly brighter overall mood, moving past the gloom of 2025 and onto new paths.

It is a positive sign that each company has identified a unique path to overcome their respective crises by leveraging their core strengths. The goal for the second half of the year will be to take these one step at a time and produce tangible results. By the end of this year, I hope to see fewer earnings misses and red ink, and instead see more companies reporting improvements and turnarounds, signalling that the South Korean gaming industry has finally emerged from its long winter.