Webtoon Entertainment, Naver Webtoon's U.S. headquarters, said on the 11th it will make a $100 million (about 142 billion won) strategic investment in game developer RI Games Holdings. The move aims to expand its game business by leveraging popular webtoon intellectual property (IP).
Once the transaction is completed, Webtoon Enter will secure 60% equity in RI Games Holdings. RI Games Holdings was founded in 2022 by Han Tae-il, founder of Redice Studio, which produced hits widely regarded as the webtoon industry's biggest successes, including "Solo Leveling" and "Omniscient Reader's Viewpoint," and it oversees game development studios Gray Games and Offbeat.
Naver Webtoon is pursuing a global franchise strategy to expand the reach of its IP by producing popular webtoons into animation, drama and film, games, and publications. Because it is difficult to generate revenue through webtoon production and distribution alone, the company plans to secure long-term profitability and growth by diversifying IP using webtoons. The ultimate goal is to secure multiple "mega IPs" loved worldwide, like Disney or Harry Potter.
In the second quarter of this year, Webtoon Enter posted revenue of $338.5 million (about 508 billion won), down 2.8% from a year earlier, and its operating loss widened 77.7% to $15.57 million (23.4 billion won). Since listing on the Nasdaq in 2024, it has remained in the red for a third straight year.
This investment in a game company is seen as an extension of that IP expansion strategy. Webtoon Enter, together with RI Games Holdings, plans to develop and launch several new games over the next four years based on proven webtoon IP. Games currently set for release are "Item" ("Tembbal"), "Warrior's Reincarnation Chronicle," and "Omniscient Reader's Viewpoint."
For "Item" ("Tembbal"), the company will align the October launch schedule of the animation and the same-titled massively multiplayer online role-playing game (MMORPG) to speed up the global expansion of the popular IP franchise and give fans experiences to enjoy the original in various ways. Kim Jun-gu, Webtoon Entertainment chief executive officer (CEO), said, "Games are a way to deliver powerful immersion to fans, and we will gamify stories fans already love to reach new users," explaining the background for deciding to invest in a game company.
Kim added, "We will turn the original into a successful global franchise across animation, TV, film, publishing, and even games." On the day, Webtoon Enter also said it would create an approximately $100 million (about 142 billion won) "IP Adaptation Fund" with Naver as part of efforts to expand revenue. The move goes a step beyond the existing approach of providing webtoon IP to outside studios for licensing revenue, by investing directly in animation, games, and films to secure revenue tied to IP hits.
Turning popular IP into games has been a trend across the global content industry in recent years. The global streaming giant Netflix entered the mobile gaming business in 2021 by launching "Netflix Games." At the time, Netflix hired a veteran from Electronic Arts Inc. (EA) to lead its gaming unit and in 2022 acquired Finnish mobile game studio Next Games.
Currently, Netflix subscribers can play more than 120 mobile games in the mobile app at no extra charge. Netflix's strategy focuses on turning hit video IPs such as "Stranger Things" and "Squid Game" into mobile games to increase the time subscribers spend on the platform and grow its fan base.
In addition, Amazon has offered the game service "Luna" to Prime members since 2022, and Crunchyroll, the animation-focused streaming platform under Sony Group, is directly sourcing and publishing (distribution and release) customized games for anime fans.