With KRAFTON and NCSOFT participating in the government-led 'AI foundation model' project, the AI business of domestic game companies is gaining attention. Facing slow growth due to a decline in the domestic gaming population, game companies are identifying AI as one of the next-generation growth engines and actively expanding their businesses.
According to the industry on the 24th, KRAFTON formed a consortium with SK Telecom to participate in the 'Independent AI Foundation Model Project' led by the Ministry of Science and ICT. The consortium includes KRAFTON, mobility data company 42Dot, NPU manufacturer Rebellions, AI search startup Liner, AI evaluation solution company SelectStar, Seoul National University Industry-Academic Cooperation Foundation, and Korea Advanced Institute of Science and Technology (KAIST).
The SK Telecom consortium aims to implement a 'full-stack AI' based on independent technology that spans semiconductors, models, data, and services. KRAFTON is expected to lead the structural design of multimodal models in the consortium by showcasing game-specialized AI technology.
KRAFTON established a dedicated deep learning division in 2022 to focus on researching AI technologies applicable to games. The company possesses its own technologies in various fields, including voice synthesis, image generation, language models, and multimodal systems. To date, it has invested more than 100 billion won in AI technology development and securing specialized personnel. Comprising about 100 members, the deep learning division has enhanced its research competitiveness by publishing over 20 AI-related papers at top-tier international conferences, including the International Conference on Machine Learning (ICML) last year.
In January of this year, KRAFTON unveiled an AI technology called Character with Possible Cooperation (CPC), co-developed with NVIDIA. Built on a game-specialized small language model (SLM), CPC is an AI character capable of communicating and cooperating with users, and it has been applied to KRAFTON's new game 'inZOI,' released in the first half of this year. It is also set to be introduced in KRAFTON's flagship title, 'Battlegrounds.'
Recently, KRAFTON has also entered the field of physical AI, such as robotics. KRAFTON CEO Kim Chang-han met with NVIDIA CEO Jensen Huang in April to discuss cooperation in robotics, including humanoids. In May, a physical AI team was established within the deep learning division.
NCSOFT's AI subsidiary, NC AI, has also formed a consortium to challenge the 'national representative AI' project. It is the only game company participating as the lead agency in this project. In 2011, NCSOFT became the first domestic game company to establish an in-house AI research and development (R&D) organization and introduced its own developed large language model (LLM) 'Barco' in 2023. NC AI was formed through the partitioning of NCSOFT's AI research organization and launched as an independent corporate entity in February.
NC AI has focused on 'vertical AI' specialized in areas such as voice synthesis, 3D, AI dubbing, and fashion. It has already commercialized various AI technologies, including voice synthesis (TTS), voice cloning, emotional acting, and motion capture within games. NC AI's goal is to expand its AI technology capabilities, accumulated over 14 years, beyond gaming to various fields such as content, commerce, and fashion. In fact, NC AI has applied the fashion-specific AI model 'Barco Art Fashion' to F&F, a brand famous for MLB and Discovery.
The gaming industry began exploring the integration of AI technology into games over a decade ago. As part of this effort, dedicated organizations and laboratories for AI have been established to enhance game development using AI.
Netmarble established a generative AI research organization called 'AI&Tech Lab' earlier this year. The company plans to focus on creating more sophisticated games utilizing external generative AI models and is also considering the possibility of developing its own AI models.
Nexon is developing game-related systems using machine learning and deep learning technologies within its AI and data analysis research organization, 'Intelligence Labs,' established in 2017. The AI-based game solution 'GameScale,' developed by Intelligence Labs, predicts user attrition within games and recommends customized environments for users. NEOWIZ is also developing AI and machine learning (ML) technologies necessary for game production and operation through its 'AI Lab.'
Game companies are understood to be investing in AI to create differentiated game content and respond to the long-term slowdown in market growth. An industry insider noted, "Game companies can enhance efficiency in their core business of game production through AI and are looking to diversify their businesses based on the accumulated gaming usage data."