[AI Revolution](179) The Era of AI Toys... XO Soft Adds Emotion to IP

"Combining AI and Augmented Reality into Commercial Products"

"We are creating unprecedented entertainment experiences through an 'emotional artificial intelligence (AI)' engine that enables characters and users to emotionally connect, going beyond simple technology development."

Park Sewon, CEO of XO Soft, is being interviewed by The Asia Business Daily. Photo by Yoon Dongju

Park Sewon, CEO of XO Soft, stated this in a recent interview at the company's office in Mapo-gu, Seoul, adding, "We are achieving results in the market by implementing AI and augmented reality (AR) as highly commercial products, not just as laboratory experiments."

He further explained, "What matters is whether consumers are satisfied with the product and continue to use it, and how well the technology is utilized rather than the underlying technology itself," adding, "Ultimately, it has to be fun, but the way we deliver that fun has changed from the past."

XO Soft's flagship product is 'Shinbi AI,' which became the first AI toy to receive 'AI+' certification last year. This robot toy, based on the character from the animation 'Shinbi Apartment,' features an interactive AI service and contains learning content required for the Nuri Curriculum. It offers a variety of experiences, such as playing children's songs using near-field communication (NFC), answering simple questions like the weather, and providing quizzes (on animals and plants, Chinese characters, multiplication tables, etc.) for learning. Through a guardian application, parents can set up a learning environment tailored to a child's development, including schedules, habit formation, and emotional analysis.

Park emphasized, "We focused on the emotional aspect of talking to AI and receiving comfort when developing 'Shinbi AI.' Successfully blending content and digital elements physically was key, and this is also the future direction for the toy industry." He explained that while most toy intellectual property (IP) is owned by the United States and Japan and products are limited to merchandise, XO Soft aimed to go beyond this reality.

He continued, "There were concerns about whether the edtech field could be profitable, but I enjoyed studying in a fun way and have always been interested in edutainment. I believed that someone needed to find new ways to make learning enjoyable for digital natives." He added with a laugh, "Our company motto is 'Hongrakinan,' which means 'Make people widely enjoy themselves.'"

Park Sewon, CEO of XO Soft, is being interviewed by The Asia Business Daily. Photo by Yoon Dongju

XO Soft is expanding its product and service areas across the entire life cycle while also broadening its sales markets. First, 'Naro AI,' jointly developed with the Edu Toolkit Design Research Institute, is an AI robot designed for the elderly. In addition to providing companionship, it is equipped with an algorithm that can determine the likelihood of dementia within one minute. The company is also developing an emotional exchange character in the form of a keyring, targeting women in their teens and twenties.

The company is also achieving results in overseas exports. Park said, "We are selling 'Phygital Cards' based on the global IP 'Daddy Bear' at 7-Eleven stores in the United States. Early next year, we plan to expand distribution channels to Costco and Walmart, and enter Mexico and Central and South America." Phygital Cards use 3D modeling to create three-dimensional characters and are a combination of AI and AR. The product also received a strong response at the 'AGF 2025' animation and game festival recently held at KINTEX in Ilsan.

He expressed pride in being a leading company in AI toys and said that XO Soft is in discussions to collaborate with various domestic and international IPs. He added, "We have continued to be profitable so far, but now is the time to take measures for a quantum leap. We will continue to introduce ultra-lightweight technology that runs perfectly even on low-spec microcontroller units (MCUs) without expensive chipsets."

Additionally, Park said, "XO Soft has breathed life into IP by integrating three distinct areas: IP, AI software, and devices. We can instantly equip any IP or product-regardless of form, whether it is a doll, robot, or home appliance-with 'emotional AI,' which gives us limitless market potential. We will maintain our competitiveness by moving beyond the race for large language model (LLM) size and focusing on practical innovation."