Smilegate founder's divorce suit draws attention to game empire built in silence
Kwon Hyuk-bin, Smilegate's founder and chief vision officer / Courtesy of Smilegate
Court finds Kwon's wife contributed 35% to company's growth
A Seoul court's ruling Wednesday on the divorce of Kwon Hyuk-bin, Smilegate’s founder and chief vision officer, drew major attention as it involved a record property division payout in Korea — an order for him to pay 2.55 trillion won ($1.91 billion) to his wife.
Despite the record settlement amount and the company's megahit first-person shooter game CrossFire, little is known about Kwon, as he rarely makes public appearances, except for charity events. Smilegate, Korea’s fifth-largest game company by sales, is unlisted and wholly owned by Kwon, often called a game empire built in silence.
Though Kwon maintains absolute control over the company, the court found that Smilegate’s founding and growth were not solely attributable to him. The bulk of the payout order is made up of Kwon’s 35 percent stake in the game company, worth 2.49 trillion won, and 65 billion won in cash, meaning the court recognized his wife’s contributions to building the company’s value.
From ashes to empire
Kwon is regarded as one of the Korean game industry’s early-generation entrepreneurs. Now 52, he graduated from Sogang University in 1999 and started his career by establishing an educational software company that year.
He married his wife, identified by her surname Lee, in 2001 and founded Smilegate the following year with 50 million won in capital. At the time, Kwon owned a 70 percent stake in the company, while Lee held the remaining 30 percent.
In 2004, Kwon developed Smilegate’s first game, Head Shot Online, but failed to release it as publisher Yahoo Korea withdrew from the game business. In 2007, Smilegate launched CrossFire in Korea, but failed to draw domestic gamers’ attention, overshadowed by Nexon’s Sudden Attack.
A promotional image of Smilegate's CrossFire / Courtesy of Smilegate
CrossFire, however, became a massive hit in China. Smilegate signed a publishing deal with Tencent in 2007 and officially launched the game in China the following year. The number of concurrent users reached 2 million in September 2010, earning it a Guinness World Records title for the highest number of concurrent users for an online game, and climbed further to 4.2 million in 2012. In 2013 and 2014, CrossFire was ranked as the world’s highest-grossing online game.
Although CrossFire is approaching its 20th anniversary, it still remains popular, with its CFS esports leagues still active in China, Vietnam and Brazil. The game has generated $14.7 billion in cumulative global sales to date. Smilegate is also known to receive more than 500 billion won in annual royalties from publishers, including Tencent.
Along with CrossFire, Smilegate’s massively multiplayer online role-playing game Lost Ark has also maintained strong popularity over the years. Currently, the Smilegate unit responsible for CrossFire accounts for roughly 50 percent of the group’s sales, while the unit behind Lost Ark accounts for about 30 percent. As of last year, Smilegate’s sales stood at 1.44 trillion won, and operating profit reached 359.8 billion won.
In remarks reported in a 2016 Chosun Biz article, Kwon said, “I went to Shenzhen, China, with the development team and worked like crazy … The six months I spent in China at the time changed the fate of both me and the company.”
Players of BaiSha Gaming celebrate after winning the CrossFire title at Esports World Cup 2026 in Paris, Aug. 22. Courtesy of Smilegate
Thorny property division
The court did not disclose the reason for the collapse of the marriage. Lee filed for divorce, claiming that Kwon was responsible for the breakdown, while Kwon has maintained that he was not at fault and did not want a divorce.
The court dismissed Lee’s claims for damages, which means that both Kwon and Lee were responsible for the breakdown of the marriage, according to the company. As Lee was awarded custody of their children, the court also ordered Kwon to pay her 20 million won per month in child support.
Because Smilegate is an unlisted company, determining the exact value of Kwon’s assets took nearly four years during the trial period.
To assess the value of Smilegate, the court considered both a tax-based valuation formula and the discounted cash flow method, which estimates the present value of a company based on its expected future cash flows. It ultimately took the midpoint of the two estimates, valuing Kwon’s 100 percent stake in Smilegate at 7.1 trillion won.
In determining Lee’s share as 35 percent, the court said it took into account that she initially held a 30 percent stake in the company’s founding capital of 50 million won. It also acknowledged her years of taking care of household duties and child care, and the fact that she was registered as CEO for about four months from the company’s establishment until she stepped down after becoming pregnant with the couple's first child.
According to Smilegate’s shareholder records, Lee’s initial stake was gradually diluted through a series of rights offerings, stake sales and other transactions, falling to 3 percent before it was sold to Tencent in 2010. In 2012, Kwon consolidated that stake and other shares held by outside investors through Smilegate Holdings, bringing his ownership of the company to 100 percent.
Both sides said they would not disclose whether they plan to appeal. Given the size of the property division, however, legal observers expect further disputes over the ruling.
Kwon’s side, which has argued that Lee was neither a co-founder of Smilegate nor involved in its management, could challenge the size of the property division. Lee, who is known to have initially sought half of Kwon’s assets, could also appeal for a larger share and challenge the court’s decision not to award her damages.