Observers say Krafton's recent decision not to proceed with the full release of its new title Abyss of Dungeon is a case of game development failure that can occur when using external intellectual property (IP) with legal risks. Abyss of Dungeon was developed using the Dark and Darker Mobile IP from Ironmace, which is in a legal dispute with Nexon. Krafton conducted a soft launch (trial service before release) of Abyss of Dungeon in North America, Latin America, and Southeast Asia, but the game failed to shake off the label of a "controversial IP" entangled in lawsuits, and with its business prospects falling short of expectations, the full release appears to have been called off.
There are concerns that the release schedules for Palworld Mobile, an open-world survival crafting game, and Subnautica 2, a deep-sea survival exploration game—both positioned by Krafton as next year's flagship titles—could be disrupted as they are directly or indirectly caught up in legal disputes.
As of the 28th, according to the game industry, Krafton will end service for Abyss of Dungeon on Jan. 21 next year. The company said of the canceled full release, "We determined it would be difficult to consistently maintain global service quality at the expected level."
Abyss of Dungeon is an extraction role-playing game (RPG) that was being developed by Bluehole Studio under Krafton. In 2023, Krafton signed a Dark and Darker IP license agreement with Ironmace and began developing the game as Dark and Darker Mobile, promoting it extensively by presenting it as a flagship entry at G-Star 2023, the country's largest game expo, that year. Krafton initially planned to unveil the game at the end of last year but postponed it once, citing quality issues.
The problem is that Dark and Darker is an IP embroiled in a copyright infringement lawsuit between Nexon and Ironmace. Nexon filed a copyright and trade secret infringement suit in 2021, saying key developers from its unpublished Project P3 leaked internal data, founded Ironmace, and used it as the basis to create Dark and Darker. Ironmace CEO Choi Ju-hyun is the former Nexon P3 Head of Team named as a defendant. The legal fight between the two companies has entered its fourth year, and in the first-instance ruling on Jan. this year, the court ordered Ironmace to pay 8.5 billion won in damages for infringing Nexon's trade secrets.
At the time, the game industry raised concerns that Krafton's plan to release Dark and Darker Mobile could be scrapped depending on the final outcome of the lawsuit between Nexon and Ironmace. In response, in May this year, Krafton rebranded Dark and Darker Mobile as Abyss of Dungeon. Krafton said the change was "to reflect a darker, deeper atmosphere and more intense combat," but the industry interpreted it as an effort to distance the game from an IP under litigation.
Krafton subsequently soft-launched Abyss of Dungeon in four additional countries—Indonesia, Thailand, Brazil, and Mexico—following the United States and Canada. However, in Aug., it abruptly halted global pre-registration, saying, "Based on the soft launch results, we are overhauling our overall service strategy and adjusting the release plan," and this month announced an official withdrawal from the market. Industry watchers believe the service was shuttered because market response was not strong enough to offset the noise surrounding the "controversial IP" and the resulting damage to brand image.
Coincidentally, the flagship new title that Krafton said it will unveil next year also carries litigation risk. Palworld Mobile, which Krafton spotlighted at this year's G-Star as a much-anticipated title for next year, is being developed based on the Palworld IP from Japanese game company Pocketpair, but the original Palworld is locked in a legal dispute in Japan over alleged plagiarism of Nintendo's Pokémon.
Nintendo filed a plagiarism lawsuit last year, saying the design and capture methods of Pal, the mysterious creatures in the Palworld game, are similar to Pokémon. Krafton's position is that the plagiarism allegations against the original will not affect Palworld Mobile's development and release schedule.
Another highly anticipated title, Subnautica 2, has already seen its release delayed once as Krafton clashed with former management at its U.S. subsidiary Unknown Worlds Entertainment, which is developing the game. The former management filed a damages suit of about 350 billion won against Krafton, claiming they were unfairly dismissed and not paid bonuses. Krafton said the former management failed to fulfill their development responsibilities, resulting in low game completeness and forcing a delay in release.
A Krafton official said, "We are focusing on development to create a highly polished game, and this lawsuit will not affect that process."