XL Games recorded KRW 31,092,290,000 in revenue and an operating loss of KRW 24,163,630,000 in 2025. According to the audit report disclosed on the 31st, net loss for the period came to KRW 25,011,150,000. Compared to the previous year — when the company posted revenue of KRW 51,174,590,000 and an operating loss of KRW 11,265,530,000 — revenue plunged by approximately 39.2%, while operating losses more than doubled, significantly widening the company’s deficit.

A look at the company’s financial indicators shows that, as of the end of 2025, XL Games had total assets of KRW 18,895,850,000 and total liabilities of KRW 62,568,350,000. Total equity stood at negative KRW 43,672,500,000, as accumulated losses built up over several years reached KRW 159,775,990,000, deepening the company’s state of “complete capital impairment.” In particular, the burden of high fixed costs — including roughly KRW 38.5bn in labor expenses (salaries and retirement benefits), which exceeded its annual revenue of KRW 31.1bn — is viewed as a key reason behind the deterioration in earnings. In addition, an impairment loss on intangible assets of approximately KRW 841,270,000, stemming from the decline in value of virtual assets held by the company, including BORA and MATIC, was reflected under non-operating expenses.

However, the company has substantially reduced its long-term legal risk. In connection with an approximately KRW 1.1bn copyright infringement lawsuit in which XL Games and parent company Kakao Games were named as co-defendants, XL Games received a ruling in its favor from the Seoul High Court on March 12th, 2026, shortly before the report was submitted.

Meanwhile, XL Games is pressing ahead with development of its next growth driver, ArcheAge Chronicles, a new PC and console title. The company has granted Kakao Games the right of first refusal to enter into a publishing agreement for the title, and plans to target the global market in the future based on the partnership between the two companies.

This article was translated from the original that appeared on INVEN.