Webtoon Entertainment Acquires 60% Stake in RI Games Holdings with $100 Million Investment

Webtoon Entertainment is investing $100 million (approximately 142 billion KRW) to acquire a 60% stake in game developer RI Games Holdings, marking a full-scale expansion of its IP (intellectual property) franchise business.

Q2 2024 Performance… Slight Revenue Decline, Widening Operating Loss

Webtoon Entertainment announced on the 10th (local time) through a regulatory filing that it recorded $338.47 million (approximately 507.9 billion KRW) in revenue and an operating loss of $15.57 million (approximately 23.4 billion KRW) for the second quarter of 2024. Revenue decreased 2.8% year-over-year, and the operating loss widened. The company cited increased marketing investment as the primary factor. Webtoon Entertainment became the first Korean content company to list on the U.S. New York Stock Exchange this year.

Background of the Game Company Acquisition… Expanding Webtoon IPs into Games

This acquisition is a strategic move to broaden the utilization scope of webtoon IPs into the gaming sector and strengthen the global franchise business. The investment will be funded with Webtoon Entertainment's own cash on hand.

RI Games Holdings, founded in 2022 by founder Han Tae-il, operates two game development studios under its umbrella: 'Grey Games' and 'Offbeat.' The development team has experience producing multiple hit titles including 'MapleStory M,' 'Tower of God: New World,' 'Seven Deadly Sins: Grand Cross,' 'Lineage W,' and 'AION 1.' Founder Han Tae-il also participated in the production of popular webtoons such as 'Solo Leveling' and 'Omniscient Reader's Viewpoint' through Red Ice Studio.

Co-Developing New Games Over Four Years… Building a Lineup Including 'Solo Leveling' and 'Omniscient Reader's Viewpoint'

Webtoon Entertainment and RI Games Holdings plan to jointly develop and release a variety of new games over the next four years based on proven IPs with established global fandoms. Many popular Naver Webtoon titles are included among those slated for game adaptations.

An action MMORPG based on 'Solo Leveling,' which has recorded 1.3 billion global views, is scheduled for release this year, with Grey Games handling development and Nexon serving as the publisher. In October, a 'Solo Leveling' anime is also set to premiere, aiming to achieve a simultaneous expansion of the original IP across both animation and gaming. 'Solo Leveling' is scheduled to begin serialized publication on Naver Webtoon's global platform starting in September.

In addition, 'Return of the Disaster-Class Hero' (590 million global views) and 'Omniscient Reader's Viewpoint' (305 million views) have been added to the game development lineup, with both works also being pursued for anime adaptations.

Contract Structure… Performance-Based Conditions for Remaining Stake Included

The investment agreement includes performance-based conditions for the treatment of the remaining stake. Upon achieving certain milestones, the selling shareholders of RI Games Holdings may sell the remaining 40% stake for a combination of cash and Webtoon Entertainment common stock under pre-agreed terms. Conversely, if the milestones are not achieved, Webtoon Entertainment is granted the right to repurchase a portion of the acquired stake from the selling shareholders.

Accelerating IP Franchise Expansion… "Games Are Key to Reaching Global Users"

With this investment, Webtoon Entertainment is further strengthening its global IP business across animation, TV, film, publishing, and gaming. The company has built a track record of adapting titles such as 'Chicken Nugget,' 'Hounds' Season 2, 'Clevatess' Season 2, and 'A Recipe for Survival' across major streaming platforms including Netflix, Disney+, Prime Video, Crunchyroll, and Tving.

Kim Jun-koo, founder and CEO of Naver Webtoon and Webtoon Entertainment, stated, "Webtoons are where global fandoms begin, and this investment will play a leading role in growing great stories into global franchises." He added, "Games are one of the most powerful ways to deliver deep immersion to fans, and turning already beloved stories into games is an effective way to reach new users around the world."

Han Tae-il, founder of RI Games Holdings, said, "I am highly anticipatory of embarking on a journey of growth together with Webtoon Entertainment," adding, "Based on our deep understanding of and passion for webtoon IPs, we will focus on delivering highly immersive gaming experiences and further expanding the fandom."