GRAVITY Co Ltd

12. Commitments

(1) The Group has entered into exclusive license agreements with foreign licensees, such as GungHo Online Entertainment, Inc., Innova Solution FZ-LLC, Shanghai BING KUAI Network Technology Co. Ltd., Relaternity(Hong Kong) Limited and etc. to provide exclusive license to distribute and sell online and mobile games and receives a certain portion of each licensee’s revenues (20-40%) as royalties.

(2) In July 2021 and in January 2023, the Group entered into development agreements with Shanghai TA REN Network Technology Co., Ltd. and Guangdong Xinghui Teamtop Interactive Entertainment Co., Ltd., respectively, to grant them the right to develop mobile games based on the contents of Ragnarok IP(ROIP) and distribute such games in China for 3 years from the agreement date. Under the terms of the agreement, the Group is entitled to receive from the licensee a royalty equal to a percentage of the applicable revenue generated.

(3) The Group has entered into license agreements with various third-party game developers to secure exclusive right to publish the games developed by the third-party developers. Upfront license fees paid are capitalized and recognized as other intangible assets and minimum guaranteed royalties are capitalized and recognized as other non-current assets. Purchase obligations for future payment related to above agreements as of December 31, 2023 and 2022 are W 4,941,782thousand and W 3,242,395 thousand, respectively.

(4) As of December 31, 2023, the Group benefited from payment guarantee of USD 658,500 from KB Kookmin Bank regarding overseas IP contracts.

(5) As of December 31, 2023, the Group has been provided with a payment guarantee amounting to W 524,424 thousand from Seoul Guarantee Insurance Co., Ltd.