[Edaily Marketin Song Seung-Hyeon Reporter] "I don’t play games, but I talk to AI characters every day."
The changing content consumption habits of the 1020 generation are reshaping the venture investment landscape. While investment in game startups has plummeted, large-scale investments continue to flow into AI character chat platforms.

Crit Ventures recently invested 2 billion won in Bunker Kids, the operator of the AI character chat platform “Wip.” Wip is an interactive content platform that builds narratives using webtoon and web novel IPs as well as its own original characters. Analysts suggest that the shift in the characteristics of the 10-20s generation is driving the influx of investment into platforms offering Netflix- and YouTube-level immersion.

According to the startup information platform THE VC on the 27th, investment in domestic game startups has shrunk to one-fifth of its 2022 level—from 556.6 billion won to 110 billion won in 2025. The number of investment deals also plummeted from 58 to 19 during the same period. In contrast, funds are pouring into AI character chat platforms in rapid succession. Scatter Lab’s “Zeta” secured a 50 billion won Series D round last month, Warp Space’s “CaveDuck” raised 4.3 billion won in a Series A round last April, and Bunker Kids secured 2 billion won this month. These figures confirm that while investment in games is declining, funding for AI character chat services is on the rise.

What’s noteworthy is that even venture capital firms that previously specialized in game investments are scaling back their game investments and boldly betting on character chat. Kona Venture Partners, a game-focused investment firm, is a prime example. Having grown in the content and game sectors, Kona Venture Partners participated as a co-investor alongside ID Ventures and Maple Investment Partners in CaveDuck’s Series A round last April. A representative from Kona Venture Partners explained, “We’re seeing a subculture fandom phenomenon where interest is concentrated on niche characters,” citing “the scalability of partnerships with IP holders and improved profitability driven by the medium- to long-term decline in large language model (LLM) costs” as reasons for the investment.

Some analysts suggest that underlying this trend is a sense of fatigue toward gaming among the 10s and 20s generation. According to the “2025 Game User Survey” conducted by the Ministry of Culture, Sports and Tourism and the Korea Creative Content Agency, the domestic game usage rate stood at 50.2%, down 9.7 percentage points from the previous year. “Lack of time” (44.0%) was cited as the most common reason for discontinuing gaming.

“OTT and video streaming” (86.3%) was by far the most popular alternative leisure activity. As short-form content like Shorts and Reels has become part of daily life, solidifying consumer habits that respond to brief stimuli, the barriers to entry for games—which require learning rules and strategic immersion—have become relatively burdensome, according to analysts. Character chat apps are capitalizing on this gap. While a single turn of conversation is as immediate and low-friction as short-form content, the structure—which involves building relationships much like raising a character—means that cumulative time spent on these apps actually exceeds that of games, according to evaluations.

Furthermore, the industry explains that proven profitability is another reason for the influx of investment. Zeta has posted profits for three consecutive quarters since the second quarter of last year, with its operating profit margin rising to 17%. Wip also returned to profitability, with average monthly payment volume growing by 110% just nine months after launch. Unlike games where spending tens of billions of won on a single blockbuster title still offers no guarantee of success, the investment community believes that character chat services can secure high retention rates and subscription revenue even with modest development costs.

This trend is not limited to South Korea. Character.AI, which was acquired by Google last year, is currently reviewing a revaluation of its corporate value. However, regulatory risks remain an unresolved challenge. In South Korea, Zeta has been sued by six webtoon companies, including Kakao Entertainment and Ridi, on charges of aiding and abetting copyright law violations, and overseas, regulations—such as restrictions on use by minors—are also tightening.

A venture capital industry insider stated, “Although the gaming industry has recently been rebounding, centered on consoles, interest in gaming among the 10–20 age group has still waned,” adding, “In contrast, character chatbots are attracting attention from this demographic, so funding is likely to continue flowing into this sector in the future.”