One month after launch, the game "Dragon Sword," mired in poor performance, has prompted developer Hound13 and publisher Webzen to terminate their publishing contract and fully refund all user payments. The two sides are trading blows with opposing positions over the contract deposit payment and responsibility for the lackluster results.
According to the game industry on the 19th, Hound13 said via its official YouTube channel that it notified Webzen on the 13th of the termination of the publishing contract. It cited Webzen's failure to pay the remaining balance of the contract deposit as the reason for termination.
Hound13 argued that Webzen did not pay the remaining balance due to financial constraints. It said Webzen refused to pay the balance after judging that continued development would be difficult. It also emphasized that the core cause of the cash crunch lies in the unpaid balance, and that insufficient promotion and marketing, which left revenue short of expectations, also had an impact.
Hound13 plans to continue the game service even if the contract ends. It said it is pursuing a switch to direct service or collaboration with a new publisher. However, it added that the large-scale update originally planned is unlikely to proceed smoothly for the time being.
In response, Webzen issued a separate statement that evening explaining the contract signing and investment progress. Webzen said that in Jan. 2024 it made a 30 billion won investment in Hound13 and agreed on Mar. 2025 as the development completion date. It said the amount was calculated in consideration of operating expenses for at least one year after development was completed.
Webzen said that although requests to delay the schedule were repeated due to development completeness issues, it accepted them, prioritizing quality assurance. It also emphasized that a portion of the minimum guarantee, which was scheduled to be paid after the official service launch, was exceptionally paid in advance twice, in Dec. last year and Jan. this year.
Nevertheless, judging that maintaining the service might be difficult with only the balance payment, it proposed additional investment for operating funds over the next year and continued discussions, but pointed out that Hound13 notified and announced the contract termination without prior agreement.
After Hound13's notice, Webzen suspended payment functions and said it would refund in full all payment amounts made since launch. However, it plans to maintain the current state of the game service until further notice.
"Dragon Sword" was released on the 21st of last month, but quickly fell in revenue rankings on major app marketplaces, recording results that fell short of expectations.