Domestic gaming companies have expanded their investments in artificial intelligence (AI) in the first half of this year, identifying AI as a key area for future growth. This move is seen as an attempt to reduce game development expenses while also enhancing game quality and discovering new revenue sources.
According to industry sources on the 2nd, major domestic gaming companies invested a substantial portion of their research and development (R&D) expenses in AI during the first half of the year. The industry aims to actively integrate the latest AI technologies to enhance gaming immersion and secure core AI technologies to lead the creation of an AI ecosystem based on games. There is also analysis suggesting that the government's push for the development of a Korean-style 'independent AI foundation model' has contributed to the revitalization of AI investment.
KRAFTON invested 2.86 billion won in R&D, which accounted for 18.6% of its total revenue in the first half of the year, representing an increase of about 10% compared to the same period last year. It is reported that a significant portion of this was allocated to AI research. According to KRAFTON's semi-annual report, the company carried out various R&D projects, including training large-scale models, deep learning research, data design, collection, processing for deep learning, and developing games that make use of conversation and reasoning fun, utilizing GPT. More than one-third of the 61 major research projects pursued in the first half of the year were related to AI.
KRAFTON established a dedicated research organization for AI, the Deep Learning Headquarters, in 2022, and has since invested in AI technologies applicable to games. So far, total AI investments have exceeded 100 billion won. Currently, there are over 120 employees in the Deep Learning Headquarters, and due to the company's strategy of expanding AI technology investments and recruiting specialized talent, it is expected that this number will increase to around 130 to 140 by the end of the year.
The Deep Learning Headquarters, which has focused on developing game-specific small language models (SLM) in collaboration with NVIDIA, recently entered the development of large language models (LLM) as KRAFTON participated in the government's 'national representative AI model' project as part of a consortium with SK Telecom. The goal is to create next-generation multimodal LLMs that integrate and process various forms of data, including text, images, audio, and video. Research on physical AI, which involves embedding AI in devices with physical substance like robots and autonomous vehicles, is also being actively pursued this year. KRAFTON envisions implementing physical AI that can operate in the real world by utilizing gaming play pattern data.
Netmarble's R&D expenses during the first half of the year amounted to 303.7 billion won, representing 22.6% of its total revenue. The company stated in its semi-annual report that it invested in research projects centered around its generative AI research organization, 'AI & Tech Lab', including the development of a deep learning-based game anomaly detection system, the implementation of voice AI technology capable of emotional expression within games, the development of an AI model that generates facial animations, and the creation of game art using image generation AI. A Netmarble official noted, 'The future focus of our R&D plans will be to continuously apply the latest AI technologies to existing AI projects' and added, 'We will push forward AI-based animation generation and AI player projects to enhance the efficiency of game development and provide a variety of customized content for users.'
Kakao Games cited achievements in AI-related research for the first half of the year, including building a user prediction system using deep learning and developing deep learning AI models in its semi-annual report. Kakao Games' R&D expenses for the first half of the year were 83.4 billion won, accounting for about 35% of its total revenue. The proportion of R&D expenses to revenue has significantly increased compared to the same period last year (19.2%).
NEXON GAMES, a subsidiary of NEXON, also invested in AI production for shooting games, one-on-one AI conversations with characters, and deep learning research in the first half of the year. A company official explained, 'In modern warfare, where finding obstacles or assessing attack efficiency against enemies is critical, dedicated tactical AI for shooting games is necessary,' and added, 'Implementing one-on-one AI conversation capabilities is also important for enhancing emotional immersion with game characters.' NEXON GAMES invested 40.4 billion won in R&D during the first half of the year, surpassing half of last year's total R&D expenses (72.1 billion won). The share of R&D expenses in total revenue also approached 45%.
Previously, Park Yong-hyun, CEO of NEXON GAMES, identified non-gaming apps like YouTube and TikTok as significant threats to the gaming industry at NDC25 in June, emphasizing the need to enhance the industry's competitiveness through the use of AI technologies, including AI-based hit prediction technology.
'Thanks to the global success of 'Goddess of Victory: Nikke' and 'Stella Blade,' Shift Up achieved its best performance ever in the second quarter and announced plans to significantly invest in AI technologies starting in the second half of the year. Shift Up stated, 'Research based on deep learning has dramatically advanced since Google's AlphaGo to OpenAI, greatly influencing the game development environment and content,' and added, 'We aim to efficiently produce a lot of content based on AI to improve the development process and ensure diversity in game play, thereby diversifying Shift Up's production lineup.'
According to market research firm Grand View Research, the global market for gaming AI is expected to grow at an average annual rate of 36%, increasing from approximately $3.28 billion (about 4.56 trillion won) last year to $51.26 billion (about 71.36 trillion won) by 2033. Grand View Research stated, 'As the implementation of AI in the gaming field increases, graphics quality and performance improve, and personalized and adaptive gameplay become possible, this is expected to contribute to an overall enhancement of the gaming experience.'
An industry insider noted, 'Gaming is an industry with a very low success rate for new titles compared to the expense and time invested, and there is a significant demand for reducing development times, cutting expenses, and improving quality by incorporating AI.' They added that attempts to apply AI beyond gaming to areas like robotics, fashion, media, and commerce will also continue.