The South Korean headquarters of Nexon Co. in Pangyo south of Seoul (Yonhap)
SEOUL, Sept. 6 (Korea Bizwire) — Since the latter part of last year, South Korean gaming industry has encountered challenges, marked by a decline in performance resulting from the easing of social distancing measures and the increasing popularity of foreign games.
This downturn has led to a flurry of legal battles centered on intellectual property (IP) issues.
According to industry insiders, Nexon Co. is currently contemplating its next steps following the resolution of a copyright infringement injunction case related to the game “Dark & Darker”.
This legal dispute concluded with a hearing at the Suwon District Court in June.
Nexon has been entangled in a series of civil and criminal lawsuits, alleging that individuals affiliated with the Korean game company Ironmace leaked data from its unreleased project P3 to external parties and subsequently created “Dark & Darker” based on this leaked information.
As the courtroom battle prolonged, Ironmace grew more confident and began distributing “Dark & Darker” through a new domestic game distributor known as Chaf Games.
In the recent past, a prominent Korean game corporation Krafton Inc. entered into a licensing agreement with Ironmace, securing exclusive mobile rights to “Dark & Darker”.
This development generated substantial discussions within the industry.
While Krafton faced moral criticism for its handling of the controversial IP, some observers believe that Krafton recognized the market potential of the “Dark & Darker” IP and took proactive steps to acquire it.
Notably, Krafton’s precursor, Bluehole Studio, was established by former “Lineage 3” developers who departed the company.
During their departure, some of these developers were accused and convicted of leaking planning materials and source code.
Despite these challenges, the massively multiplayer online role-playing game (MMORPG) they created, “Terra”, was successfully launched without significant issues.
One industry insider provided insight, stating, “Krafton appears confident in its ability to release the game regardless of the ongoing litigation involving Ironmace.”
This file photo provided by NCSOFT Corp. shows a picture of its leading game Lineage M.
Meanwhile, NCSOFT Corp. is embroiled in civil litigation with Webzen Inc. and Kakao Games Corp. over IP rights.
In 2021, the company initiated a lawsuit to halt copyright infringement, alleging that Webzen’s MMORPG “R2M” replicated many elements of “Lineage M”, both in terms of content and gameplay systems.
The ruling at the Seoul Central District Court last month was in favor of NCSOFT, but both the plaintiff and defendant are expected to appeal, leading to a second trial.
Additionally, in April, NCSOFT filed a civil suit against Kakao Games’ “Akiage War”, asserting that it had plagiarized “Lineage 2M.” As of now, a hearing date for this case has not been scheduled.
Another major player, Netmarble Corp., often referred to as “3N” alongside Nexon and NCSOFT, is embroiled in a legal battle with the Korean game company Masangsoft.
In 2021, Masangsoft Inc. filed a civil lawsuit, claiming that Netmarble’s “Seven Knights,” released in 2014, was developed using data from “DK Online.”
Although Masangsoft lost the initial trial, the company appealed the decision earlier this month.
The recurring theme of large domestic game companies being drawn into copyright disputes is closely tied to the growing significance of IP within the industry.
In their most recent second-quarter earnings reports, most Korean game companies, with the exception of Nexon, reported significant year-on-year declines in operating profit or even incurred losses due to the absence of new blockbuster hits.
Kevin Lee (kevinlee@koreabizwire.com)
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