WEBTOON Entertainment Inc. is rolling out multiple AI-driven features, acquired a videogame company and created an investment fund, as it reported a Q2 with declining sales and a larger loss. The ongoing losses and the investments the company is making are being funded by the $365 million it raised in its 2024 initial public offering (see “Webtoon Raises $365M”).
The AI features include an AI-powered auto-translation program, which launched in May for eligible English-language creators in its CANVAS user-generated content group. A feature called ByUS, which WEBTOON introduced in Korea in the quarter, is an interactive stories chat service in which fans converse with creators and build stories of their own on official worlds with the approval of the creators that made them. And in a move that echoes developments that we’re hearing about from a growing number of companies, WEBTOON is launching Cuts Make, an AI-powered short-form animation tool that lets fans create stories using official IP.
This month, WEBTOON also announced two major investments. It is acquiring a controlling 60% interest in videogame company RI Games Holdings, which is already development videogames based on WEBTOON properties, for around $100 million. And it also announced a dedicated IP Adaptation Fund of $100, which it is funding alongside onetime parent Naver.
The company’s Q2 report showed sales pulled down by a decline in Japan and a higher net loss, driven by increased marketing expense. Sales for the quarter were $338.5 million, down 2.8% from $348.3 million in the year ago quarter. Declines in Japan were only partially offset by gains in Korea and the rest of the world (which includes English). Because the company reports in dollars with most of its business in Asia, currency fluctuations have a big impact on the reported numbers. In constant currency, sales were $366.4 million, up 5.2%.
WEBTOON reported a loss of $14.6 million compared to $3.9 million in the previous year, with substantially increased marketing spend and increased income tax expense both contributing. In constant currency, the net loss was $23.8 million compared to a $37.8 million gain in the previous year quarter.
The company reported a loss of $63.5 million for 2025 (see “WEBTOON Loses”), an improvement from the $100.7 million loss in 2024 (which had heavy IPO-related costs). WEBTOON hopes that its new AI features will help build engagement on the site and expand its audience. And by directly investing in ownership of its videogame and media adaptations, the company expects to capture more of the value its IP creates.
Source: ICV2
