Dragon Sword, a South Korean open-world action RPG of 2026, now faces a legitimate threat of game shutdown after developer Hound13 and publisher Webzen have locked horns over their publishing contract in a public brawl over withheld payments, dead-on-arrival marketing, and what the gaming community is calling a corporate takeover bid disguised as a rescue operation.

Just a month after the launch of Dragon Sword, which quickly climbed to the top of both the Google Play Store and the Apple App Store in South Korea, Webzen made the surprising decision to freeze all in-game payments and announced that they would be issuing full refunds for every purchase since the game’s release on January 21.

Hound13, feeling the impact of these changes, officially ended their publishing contract via email on February 13 and soon took to social media to share their side of the story. This move has created quite a buzz, leaving countless players with refund receipts in hand but no updates or patch notes to look forward to.

Built to Compete

Hound13 has truly made its mark with Dragon Sword, a game designed to take on the tough competition in Korea’s mobile gaming scene. Powered by Unreal Engine 5, this open-world action RPG showcases an exciting feature called the Tag Action System. This innovative mechanic allows players to seamlessly switch between three characters in real time, chaining combos even during animations.

Another standout is the unique mount system that lets characters take flight mid-jump—an impressive twist that helps eliminate the tedious travel times often found in open-world games. Park Jeong-sik, the founder of Hound13, has a rich background in gaming, having previously directed Dragon Nest, a title that significantly shaped the action RPG genre in Korea. Their earlier game, Hundred Soul, achieved notable success with 1.6 million downloads worldwide.

On January 23, 2026, Dragon Sword made a grand debut by reaching the top of the popularity charts on both Google Play and the Apple App Store in South Korea. This incredible achievement clearly shows that Hound13’s vision resonated with players.

A $22 Million Deal Gone Wrong

The publishing contract originated in January 2024, when Webzen made a significant investment of approximately 30 billion Korean won (roughly $22 million USD) in Hound13. This deal granted Webzen the publishing rights to Dragon Sword and included a 25 percent equity stake in the studio, making it the second-largest shareholder.

The partnership focused on an ambitious open-world action RPG, and Webzen was banking on this project to bolster its reputation in South Korea. The initial completion target was set for March 2025. However, Hound13 requested multiple extensions to the deadline, which ultimately delayed the launch by nearly a year. This shift in schedule also led to faster depletion of operating funds than originally anticipated in the publishing contract.

Two Companies, Two Completely Different Stories

The Minimum Guarantee, or MG, is the guaranteed payment that Webzen was supposed to pay Hound13, regardless of how well their game did on the market. Unfortunately, this has become a key issue in their dispute over their publishing contract.

Hound13 claims they only received 40 percent of the total promised MG, with most of it coming just before and on the day of the game’s launch. They allege that Webzen withheld the remaining 60 percent after Dragon Sword didn’t perform as expected, which left Hound13 struggling to fund updates, keep their team on board, and follow through on their plans post-launch. To make matters worse, they say Webzen didn’t provide any marketing support either domestically or globally, leaving them to navigate a fiercely competitive mobile market without any direction.

Meanwhile, Webzen is standing firm in its defense, highlighting that it prepaid some of the minimum guarantee instalments ahead of schedule in late 2025 and early 2026, demonstrating its commitment to Hound13. They explain that after assessing the game’s performance post-launch, they reached the difficult conclusion that the remaining funds wouldn’t be enough to make a significant difference in commercial success.

Webzen insists that they were in the midst of proposing additional investments to support the project when, out of the blue, Hound13 sent a termination notice via email on February 13. This was done without any prior discussions and caught them off guard, especially since Hound13 made their decision public right after. Webzen views this as a serious breach of their negotiation agreement, further intensifying the situation.

The Allegation That Lit the Internet on Fire

The situation surrounding Hound13 and Webzen has stirred considerable controversy, particularly over one alarming claim. Hound13 argues that Webzen’s offer of “additional investment” came with a harsh condition: they wanted the studio to reconfigure itself as a Webzen subsidiary at a valuation reportedly shockingly low—hundreds of times lower than what Webzen initially paid per share.

Pushing further, Hound13 claims that Webzen insisted that CEO Park Jeong-sik personally convince shareholders to accept these near-zero valuations before any new investment could be secured. This demand would have effectively given Webzen complete control over Hound13 at a moment when the developer was most vulnerable.

Adding to the tension, Webzen has remained tight-lipped about the terms of the acquisition, which has only stoked speculation and distrust.

The backdrop to this conflict is especially significant. In 2024, Webzen shut down “The Eminence in Shadow” less than a year after its launch. Just 20 days before pulling the plug, they denied rumours of a shutdown while simultaneously running aggressive spending events, leaving many frustrated players in the lurch when they initially refused refunds. This situation sparked protests outside their headquarters in Seoul. Similarly, “Ragnador” met an equally abrupt fate exactly one year after its 2023 launch.

These sudden closures have severely damaged Webzen’s reputation within the Korean gaming community, making it nearly impossible for them to defend their actions in the Dragon Sword case and be taken seriously. The growing mistrust and resentment from players make the stakes in this situation even higher.

Where Dragon Sword Stands — and Where It Could Go

Dragon Sword ARPG Official Launch on January 21
byu/EnamRainbow ingachagaming

Since February 19, Webzen has put a stop to all in-game payments for Dragon Sword and has committed to refunding players for every purchase made since the game’s launch on January 21. While the open-world action RPG is still technically online, it’s a bit of a ghost town; there are no events, no patches, and absolutely no communication about when, or if, things will improve. This silence is only fueling concerns that the game might be shutting down.

Hound13 has until around mid-May 2026, thanks to a 90-day contractual grace period, to figure out its next steps. They have two tough paths ahead: self-publishing—a route that requires resources they probably don’t have right now—or trying to secure a new publishing contract.

However, any new deal will have to contend with the fact that Webzen holds a 25 percent stake in the company, meaning they still have a say in critical decisions, regardless of the future agreement. Going to court could be seen as a last resort; after all, Hound13 knows that fighting their own second-largest shareholder could potentially undermine the studio they’re trying so hard to save.

Despite the turmoil, Dragon Sword made a strong impression at launch, ranking No. 1 in terms of combat depth and design quality—not just because of heavy marketing. It’s regarded as one of the most technically impressive open-world action RPGs to come out of South Korea’s mobile gaming scene in recent years.

The challenges it currently faces stem not from a lack of creative talent but from business troubles. Whether Hound13 can find a way to stay afloat before mid-May will not only impact this exceptional title but may also shed light on how the Korean gaming industry deals with the power dynamics that often come into play with publishing contracts.

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