Nexon launches 250 billion won game startup fund in public-private partnership

Nexon is partnering with the government to launch a 250 billion won ($163 million) investment program targeting game startups. The initiative aims to uncover next-generation game intellectual property as the industry navigates an AI transition, while channeling long-term capital into a domestic early-stage game investment market that has grown increasingly starved of funding.

Nexon announced Tuesday that it will run a long-term investment program totaling 250 billion won over the next five years, focused on early-stage domestic game developers.

The program will target game studios at the seed through Series A stages.

At the core of the initiative is a 120 billion won strategic fund co-established by Nexon Partners and game-focused venture capital firm Kona Venture Partners. The fund includes 60 billion won from the Ministry of Culture, Sports and Tourism's IP account under the government's Fund of Funds program, combining private capital with public policy money in a public-private partnership structure.

Separately, Nexon plans to commit an additional 130 billion won in direct investment to finance follow-on growth stages. The move is designed to close what the company calls a "follow-on investment gap" — the difficulty early-stage studios face in securing subsequent funding after their initial round.

Game development typically takes three to five years or more and requires substantial capital at each stage. Yet many studios that secure seed funding fail to attract Series A or later rounds, a pattern that has placed mounting financial pressure on small and mid-sized developers.

The broader domestic game startup investment market has contracted sharply. According to startup database The VC, the number of investment deals in Korean game startups and small and medium-sized enterprises fell from 57 in 2021 and 58 in 2022 to 35 in 2024 and just 19 in 2025. Total investment value dropped from 556.6 billion won in 2022 to 110 billion won in 2025.

Nexon said the program will not be limited to studios it publishes. Through an open-ecosystem model that invests in IP it does not directly service, the company aims to fill the early-stage funding gap across the domestic game industry as a whole.

Nexon Partners, the entity established to run the program, is led by Lee Jung-hun, CEO of Nexon Japan. Kim Han-jun, chief investment officer of Nexon Korea, and Piao Yanli, former CEO of Tencent Korea, are also said to have joined its board of directors. Through the vehicle, Nexon plans to identify promising game startups and early-stage IP, and invest proactively in studios with global expansion potential.

Nexon's move into game startup support also carries echoes of its earlier Nexon & Partners Center, or NPC, which from 2012 to 2019 provided promising game ventures and startups with office space, legal advice and publishing support. The new program differs in that it focuses on long-term investment and growth capital rather than short-term incubation.

Nexon views the current AI transition as an opportune moment for new game IP to emerge. Just as the shift to smartphones gave rise to a new generation of game companies, the company believes the AI technology wave could produce studios that redefine what games can be. Investment targets may extend beyond conventional developers to include IP with global market potential, studios building on new technologies, and creators of what Nexon calls "gamified AI" and other expanded content formats.

The fund also aligns with the external investment strategy Nexon has been emphasizing of late. At a capital markets briefing this year, the company said it would pursue strategic investments and partnerships targeting firms with loyal communities and strong talent. The move is part of a broader push to secure future growth engines by combining selective mergers and acquisitions with external startup investment.

"The domestic early-stage game development market has seen even promising studios struggle to raise funds amid a prolonged chill in investor sentiment," said Lee Jung-hun, CEO of Nexon Partners. "In this environment, we will use public-private cooperation to close the early-stage funding gap and operate this as a long-term ecosystem investment program to identify the next generation of global IP that the AI transition will bring."