Smilegate has formally signalled a decisive strategic shift: the South Korean games developer intends to expand its portfolio of anime-style titles significantly, positioning the genre as a medium-to-long-term growth engine. Baek Young-hoon, the company's Chief Business Officer, stated publicly that anime games will account for a growing share of the firm's future line-up. Analysts read the announcement not as routine genre diversification, but as a structural realignment aimed squarely at global markets.
Why anime, and why now?
Anime-style games — those drawing on the visual language of Japanese animation — have been among the fastest-growing segments of the global games industry for several years. According to market research firm Newzoo, mobile and PC titles adopting this aesthetic have grown at an average annual rate of more than 20% since 2020. The genre's commercial potential was dramatically illustrated by *Genshin Impact*, developed by China's HoYoverse, which surpassed $5bn in cumulative revenue after its 2020 launch. Subsequent titles from the same studio, *Honkai: Star Rail* and *Zenless Zone Zero*, reinforced what has effectively become a new market standard.
South Korean developers have also demonstrated that they can compete in this space. Nexon's *Blue Archive* and Shift Up's *Goddess of Victory: Nikke* have both sustained long commercial runs in global markets. Shift Up parlayed Nikke's success into a listing on South Korea's KOSPI stock exchange in 2024.
Smilegate's announcement is a clear response to these trends. The company built its reputation on *CrossFire*, a first-person shooter that became enormously popular in China, and on mobile role-playing games such as *Epic Seven*. The latter is itself an anime-style title with 2D graphics that has maintained a loyal following in North America and Europe — and is widely seen as the practical foundation on which the new strategy rests.
Smilegate's structural advantages
Several factors underpin the confidence behind the declaration. Smilegate possesses in-house publishing capabilities and an extensive global distribution network spanning China, South-East Asia, and North America. Its Chinese market relationships, forged over years of operating *CrossFire*, are considered a strategic asset, given the voracious appetite for anime content among Chinese consumers.
The group also has an established track record of incubating smaller studios through its investment and development arms. Industry observers note that Smilegate is likely to supplement internal development by acquiring or partnering with external studios to populate its anime pipeline quickly. Internal initiatives, including projects developed through independent in-house units such as Smilegate Hope Studio, are reportedly already under way.
Notably, it was the Chief Business Officer — rather than a creative or development lead — who made the announcement. This signals that the pivot encompasses investment strategy, partnerships, and distribution, not merely a shift in artistic direction. Anime games may, in other words, become an axis around which Smilegate's entire business model is reoriented.
Risks: a crowded and unforgiving market
Optimism should be tempered. The anime-game market is intensely competitive. HoYoverse, Kuro Games (maker of *Wuthering Waves*), Kakao Games, and Netmarble are among the domestic and international heavyweights already deploying development budgets running from tens of millions to hundreds of millions of dollars per title. Entering as a relative latecomer demands both substantial financial resources and differentiated intellectual property.
Specialists caution that success in this genre depends not merely on visual polish, but on character storytelling, world-building, and the ability to sustain live-service content updates over years. This makes long-term operational discipline more important than any initial commercial spike — a capability Smilegate has partly cultivated through *CrossFire*, though the distinct fan cultures and IP management demands of anime games require additional expertise.
Audience fragmentation poses a further challenge. Core anime-game consumers are highly loyal, but precisely because of that loyalty they are also reluctant to adopt unfamiliar IP. A new title lacking pre-existing brand recognition requires substantial marketing expenditure and time before it can establish a meaningful presence.
Lessons from abroad
Established Japanese publishers offer cautionary examples. Bandai Namco, despite holding some of the most powerful anime IP in existence, has been forced to shut down several mobile anime titles prematurely. By contrast, HoYoverse built its original intellectual property painstakingly over many years before achieving its breakthrough. The prevailing analysis is that the divergence in outcomes reflects, above all, a willingness to invest in IP construction over the long term rather than seeking quick returns.
If Smilegate absorbs this lesson, it must resist the pressure for near-term results and commit to sustained upfront investment in world-building and character development. That requires both the financial capacity of the broader group and genuine long-term conviction from its leadership.
Outlook: 2027-28 as the proving ground
Industry observers generally expect Smilegate's anime strategy to yield visible results around 2027-28, when titles currently in development are likely to reach market in succession. The critical variables over that period will be how distinctive and durable the company's new IP proves to be, and how effectively it leverages global distribution partnerships.
Baek's remarks suggest that Smilegate is preparing seriously for a post-*CrossFire* era. The shooter franchise has generated the cash flows that make this gamble possible; the question now is whether anime games can become the new growth pillar that sustains the company's global ambitions — and, more broadly, whether South Korea's games industry can add another chapter to its international success story.