[Exclusive] NCSoft, Facing Game Losses, Invests in Growing 'Fashion AI'

Supplying Proprietary LLM 'Barco' to the Fashion Industry
Providing Visual Ideas... Also Creating a Glossary
Limitations of Relying on the Lineage IP Approach

NCSoft has secured future growth engines by leveraging fashion. In a situation where it is difficult to defend profitability with the performance of a single game like 'Lineage,' the company is pursuing a strategy to enter new industries by leading with artificial intelligence (AI).

According to the industry on the 5th, NC AI, a subsidiary of NCSoft, is recently pushing a plan to supply its own large language model (LLM) 'Barco' to the fashion industry. NC AI is a separate corporation spun off last year from NCSoft's Research Division. It is tasked with AI research and development (R&D) and expanding new business ventures, including Barco.

NCSoft initiated its entry into new businesses, seeing generative AI like Barco as suitable for situations where visual ideas are needed, such as when fashion companies plan new seasonal products. For example, if requested to "create a red lace top that suits spring well," Barco can immediately present more than ten design drafts. Barco is an independent language model developed by NCSoft, the first among Korean game companies. Accordingly, it is specialized not only in Korean but also in games, and is known for its excellent performance in visual tasks. It has also been listed on Amazon Web Services (AWS)’s generative AI platform 'Amazon Bedrock,' known as the so-called 'AI App Store,' alongside AI models from LG AI Research Institute and Upstage. An NCSoft official stated, "We are reviewing fashion companies with which various collaborations, including Barco sales, are possible."

Additionally, NCSoft plans to lead the fashion AI field by jointly producing a 'fashion product glossary' for AI training with partners. They are also researching AI technology that automatically displays fashion-related information based on the glossary after collecting product photos such as clothing and accessories from social networking services (SNS).

NCSoft’s decision to designate the fashion industry as a future growth area is influenced by the limitations of growth relying on the Lineage intellectual property (IP). NCSoft experienced profitability deterioration due to the flood of Lineage-like MMORPGs (massively multiplayer online role-playing games) in its main genre market. Last year, it recorded an operating loss of 109.2 billion KRW on a consolidated basis, marking its first annual deficit since listing, and sales also decreased by 11.3% year-on-year to 1.5781 trillion KRW. Hong Won-jun, Chief Financial Officer (CFO), apologized to shareholders at the earnings announcement on the 12th of last month, saying, "It was a more difficult year than ever."

Accordingly, NC AI plans to provide customized AI solutions not only for fashion but also for various industries such as chatbots, translation, and content. Starting from the 3rd (local time), it is participating in the world's largest mobile telecommunications exhibition, the Mobile World Congress (MWC) held in Barcelona, Spain, to showcase its AI technology.

Im Su-jin, Chief Brand Officer (CBO) and an expert in discovering new businesses, expressed her aspirations on LinkedIn shortly after joining NC AI early last month: "Our future goal is to promote NC AI’s technology and expand collaboration opportunities," adding, "We will introduce an initial free model followed by a paid model to create opportunities for many companies to experience AI and gradually pursue monetization."