Gravity (GRVY) 20-F 30 Apr 14 2013 FY Annual report (foreign) Financial data

Document_and_Entity_Informatio

Document and Entity Information	12 Months Ended
	Dec. 31, 2013
Document and Entity Information	'
Entity Registrant Name	'GRAVITY CO., LTD.
Entity Central Index Key	'0001313310
Document Type	'20-F
Document Period End Date	31-Dec-13
Amendment Flag	'false
Current Fiscal Year End Date	'--12-31
Entity Well-known Seasoned Issuer	'No
Entity Voluntary Filers	'No
Entity Current Reporting Status	'Yes
Entity Filer Category	'Non-accelerated Filer
Entity Common Stock, Shares Outstanding	6,948,900
Document Fiscal Year Focus	'2013
Document Fiscal Period Focus	'FY
Trading Symbol	'GRVY

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified	USD ($)	KRW	KRW
Current assets:	'	'	'
Cash and cash equivalents	$29,588	31,222,000	36,455,000
Short-term financial instruments	17,058	18,000,000	17,500,000
Accounts receivable, net (including related party balances of ￦2,575 and ￦1,710, respectively)	5,054	5,333,000	7,116,000
Current portion of deferred income tax assets	1,358	1,433,000	2,761,000
Other current assets (including related party balances of ￦84 and ￦63, respectively)	2,524	2,663,000	4,097,000
Total current assets	55,582	58,651,000	67,929,000
Property and equipment, net	2,194	2,315,000	3,524,000
Leasehold and other deposits	5,277	5,569,000	5,767,000
Capitalized software development cost (including related party balances of ￦544 and nil, respectively)	11,885	12,543,000	17,387,000
Other intangible assets	157	166,000	3,020,000
Goodwill	1,147	1,210,000	3,863,000
Equity method investments	'	'	647,000
Deferred income tax assets	6,797	7,173,000	8,331,000
Other non-current assets	131	138,000	87,000
Total assets	83,170	87,765,000	110,555,000
Current liabilities:	'	'	'
Accounts payable (including related party balances of ￦637 and ￦279, respectively)	4,145	4,374,000	5,115,000
Deferred revenue (including related party balances of ￦559 and ￦479, respectively)	5,480	5,782,000	3,006,000
Accrued expense	543	573,000	919,000
Other current liabilities	636	671,000	1,335,000
Total current liabilities	10,804	11,400,000	10,375,000
Long-term deferred revenue (including related party balances of ￦5,503 and ￦4,998, respectively)	6,515	6,875,000	9,172,000
Accrued severance benefits	249	263,000	683,000
Other non-current liabilities	215	227,000	247,000
Total liabilities	17,783	18,765,000	20,477,000
Commitments and contingencies	'	'	'
Parent Company Shareholders' equity:	'	'	'
Preferred shares, ￦500 par value, 2,000,000 shares authorized, and no shares issued and outstanding at December 31, 2012 and 2013	'	'	'
Common shares, ￦500 par value, 38,000,000 shares authorized, and 6,948,900 shares issued and outstanding at December 31, 2012 and 2013	3,292	3,474,000	3,474,000
Additional paid-in capital	71,144	75,076,000	75,395,000
Retained earnings	-10,319	-10,889,000	7,699,000
Accumulated other comprehensive income	1,588	1,674,000	3,001,000
Total parent company shareholders' equity	65,705	69,335,000	89,569,000
Non-controlling interest	-318	-335,000	509,000
Total equity	65,387	69,000,000	90,078,000
Total liabilities and equity	$83,170	87,765,000	110,555,000

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical)	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
	USD ($)	KRW	KRW	Related Party	Related Party
				KRW	KRW
Accounts receivable, related party	'	'	'	1,710,000,000	2,575,000,000
Other current assets	2,524,000	2,663,000,000	4,097,000,000	63,000,000	84,000,000
Capitalized software development cost	11,885,000	12,543,000,000	17,387,000,000	0	544,000,000
Accounts payable, related party	'	'	'	279,000,000	637,000,000
Deferred revenue	5,480,000	5,782,000,000	3,006,000,000	479,000,000	559,000,000
Long-term deferred revenue	$6,515,000	6,875,000,000	9,172,000,000	4,998,000,000	5,503,000,000
Preferred shares, par value (in Korean Won per share)	'	500	500	'	'
Preferred shares, shares authorized (in shares)	2,000,000	2,000,000	2,000,000	'	'
Preferred shares, shares issued (in shares)	0	0	0	'	'
Preferred shares, shares outstanding (in shares)	0	0	0	'	'
Common shares, par value (in Korean Won per share)	'	500	500	'	'
Common shares, shares authorized (in shares)	38,000,000	38,000,000	38,000,000	'	'
Common shares, shares issued (in shares)	6,948,900	6,948,900	6,948,900	'	'
Common shares, shares outstanding (in shares)	6,948,900	6,948,900	6,948,900	'	'

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
	USD ($)	KRW	KRW	KRW
Revenue	'	'	'	'
Online games-subscription revenue	$7,776,000	8,206,000,000	10,150,000,000	11,556,000,000
Online games-royalties and license fees (including related party revenue of ￦23,890, ￦24,125 and ￦12,455, respectively)	20,588,000	21,726,000,000	32,325,000,000	35,552,000,000
Mobile games and applications (including related party revenue of ￦4,604, ￦3,296 and ￦4,992, respectively)	13,745,000	14,504,000,000	8,262,000,000	6,609,000,000
Character merchandising, animation and other revenue (including related party revenue of ￦616, ￦2,621 and ￦1,104, respectively)	3,079,000	3,249,000,000	7,044,000,000	3,760,000,000
Total net revenue	45,188,000	47,685,000,000	57,781,000,000	57,477,000,000
Cost of revenue (including related party cost of ￦953, ￦2,072 and ￦119, respectively)	33,545,000	35,399,000,000	34,906,000,000	24,243,000,000
Gross profit	11,643,000	12,286,000,000	22,875,000,000	33,234,000,000
Selling, general and administrative expenses (including related party expenses of ￦588, ￦605 and ￦123, respectively)	16,171,000	17,063,000,000	20,310,000,000	22,759,000,000
Research and development (including related party expenses of ￦317, ￦108 and ￦959, respectively)	5,810,000	6,131,000,000	7,018,000,000	4,136,000,000
Impairment loss on intangible assets	5,517,000	5,822,000,000	14,569,000,000	3,697,000,000
Gain on disposal of equity method investments	'	'	-528,000,000	'
Gain on loss of control in a subsidiary	'	'	'	-548,000,000
Settlement cost of litigation	'	'	'	29,000,000
Operating income (loss)	-15,855,000	-16,730,000,000	-18,494,000,000	3,161,000,000
Other income (expenses)	'	'	'	'
Interest income	1,265,000	1,334,000,000	1,763,000,000	1,844,000,000
Interest expense	-39,000	-41,000,000	-55,000,000	-58,000,000
Foreign currency income (loss), net	-391,000	-413,000,000	-902,000,000	180,000,000
Others, net	1,161,000	1,225,000,000	65,000,000	-90,000,000
Income (loss) before income tax expense (benefit) and equity loss on investments	-13,859,000	-14,625,000,000	-17,623,000,000	5,037,000,000
Income tax expenses (benefit)	4,840,000	5,108,000,000	2,584,000,000	-7,962,000,000
Income (loss) before equity loss on investments	-18,699,000	-19,733,000,000	-20,207,000,000	12,999,000,000
Equity loss on investments, net	-18,000	-18,000,000	-333,000,000	-242,000,000
Net income (loss)	-18,717,000	-19,751,000,000	-20,540,000,000	12,757,000,000
Net income (loss) attributable to :	'	'	'	'
Non-controlling interest	-1,103,000	-1,163,000,000	-8,316,000,000	-2,171,000,000
Parent company	-17,614,000	-18,588,000,000	-12,224,000,000	14,928,000,000
Earnings (losses) per share - basic and diluted: (in Korean Won and dollars per share)	($2.53)	-2,675	-1,759	2,148
Weighted average number of shares outstanding Basic and diluted (in shares)	6,948,900	6,948,900	6,948,900	6,948,900
Foreign currency translation adjustment ("CTA")	'	'	'	'
Foreign CTA gains (loss)	-97,000	-102,000,000	'	'
Reclassification adjustment for CTA	-1,161,000	-1,225,000,000	'	'
Net foreign CTA gain (loss)	-1,258,000	-1,327,000,000	-41,000,000	-510,000,000
Comprehensive income (loss)	-19,975,000	-21,078,000,000	-20,581,000,000	12,247,000,000
Comprehensive income (loss) attributable to :	'	'	'	'
Non-controlling interest	-1,103,000	-1,163,000,000	-8,316,000,000	-2,171,000,000
Parent company	($18,872,000)	-19,915,000,000	-12,265,000,000	14,418,000,000

CONSOLIDATED_STATEMENTS_OF_COM1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical)(Related Party KRW)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Online games-royalties and license fees related party revenue	12,455,000	24,125,000	23,890,000
Mobile games and applications related party revenue	4,992,000	3,296,000	4,604,000
Character merchandising, animation and other related party revenue	1,104,000	2,621,000	616,000
Cost of revenue	119,000	2,072,000	953,000
Selling, general and administrative expenses	123,000	605,000	588,000
Research and development	959,000	108,000	317,000

CONSOLIDATED_STATEMENTS_OF_CHA

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Total

Total

Common Shares

Common Shares

Additional Paid-in Capital

Additional Paid-in Capital

Retained Earnings (Accumulated deficit)

Retained Earnings (Accumulated deficit)

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Non-Controlling Interest in Subsidiaries

Non-Controlling Interest in Subsidiaries

In Thousands, except Share data, unless otherwise specified

USD ($)

KRW

USD ($)

KRW

USD ($)

KRW

USD ($)

KRW

USD ($)

KRW

USD ($)

KRW

Beginning Balance at Dec. 31, 2010

'

98,412,000

'

3,474,000

'

75,395,000

'

4,995,000

'

3,552,000

'

10,996,000

Beginning Balance (in shares) at Dec. 31, 2010

'

'

'

6,948,900

'

'

'

'

'

'

'

'

Comprehensive income (loss)

'

'

'

'

'

'

'

'

'

'

'

'

Foreign currency translation adjustments, net of tax

'

-510,000

'

'

'

'

'

'

'

-510,000

'

'

Net income (loss)

'

12,757,000

'

'

'

'

'

14,928,000

'

'

'

-2,171,000

Ending Balance at Dec. 31, 2011

'

110,659,000

'

3,474,000

'

75,395,000

'

19,923,000

'

3,042,000

'

8,825,000

Ending Balance (in shares) at Dec. 31, 2011

'

'

'

6,948,900

'

'

'

'

'

'

'

'

Comprehensive income (loss)

'

'

'

'

'

'

'

'

'

'

'

'

Foreign currency translation adjustments, net of tax

'

-41,000

'

'

'

'

'

'

'

-41,000

'

'

Net income (loss)

'

-20,540,000

'

'

'

'

'

-12,224,000

'

'

'

-8,316,000

Ending Balance at Dec. 31, 2012

85,362

90,078,000

3,292

3,474,000

71,446

75,395,000

7,295

7,699,000

2,846

3,001,000

483

509,000

Ending Balance (in shares) at Dec. 31, 2012

'

'

6,948,900

'

'

'

'

'

'

'

'

'

Comprehensive income (loss)

'

'

'

'

'

'

'

'

'

'

'

'

Foreign currency translation adjustments, net of tax

-1,258

-1,327,000

'

'

'

'

'

'

-1,258

-1,327,000

'

'

Net income (loss)

-18,717

-19,751,000

'

'

'

'

-17,614

-18,588,000

'

'

-1,103

-1,163,000

Changes in ownership interest in subsidiaries

'

'

'

'

-302

-319,000

'

'

'

'

302

319,000

Ending Balance at Dec. 31, 2013

$65,387

69,000,000

$3,292

3,474,000

$71,144

75,076,000

($10,319)

-10,889,000

$1,588

1,674,000

($318)

-335,000

Ending Balance (in shares) at Dec. 31, 2013

'

'

6,948,900

'

'

'

'

'

'

'

'

'

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
	USD ($)	KRW	KRW	KRW
Cash flows from operating activities	'	'	'	'
Net income (loss)	($18,717,000)	-19,751,000,000	-20,540,000,000	12,757,000,000
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities	'	'	'	'
Depreciation and amortization	7,422,000	7,832,000,000	8,339,000,000	4,088,000,000
Allowance for accounts receivable and other receivables	27,000	28,000,000	213,000,000	1,021,000,000
Impairment loss on intangible assets	5,517,000	5,822,000,000	14,569,000,000	3,697,000,000
Provision for accrued severance benefits	63,000	67,000,000	96,000,000	586,000,000
Equity loss on investments, net	18,000	18,000,000	333,000,000	242,000,000
Gain on disposition of intangible assets	-95,000	-100,000,000	'	'
Loss (gain) on foreign currency transactions	65,000	68,000,000	93,000,000	-70,000,000
Loss (gain) on disposition of property and equipment	22,000	23,000,000	-7,000,000	'
Gain on loss of control in subsidiaries	'	'	'	-548,000,000
Gain on disposal of equity method investment	'	'	-528,000,000	'
Others	-1,063,000	-1,122,000,000	7,000,000	-33,000,000
Changes in operating assets and liabilities:	'	'	'	'
Accounts receivable	1,573,000	1,660,000,000	-1,611,000,000	1,437,000,000
Other assets	790,000	834,000,000	76,000,000	-5,987,000,000
Accounts payable	-603,000	-636,000,000	-795,000,000	-1,366,000,000
Accrued expenses	-326,000	-344,000,000	179,000,000	447,000,000
Deferred revenue	490,000	517,000,000	45,000,000	-2,494,000,000
Income tax payable	-96,000	-102,000,000	-67,000,000	-364,000,000
Deferred income taxes	2,345,000	2,474,000,000	-1,025,000,000	-11,715,000,000
Payment of severance benefits	-421,000	-444,000,000	-190,000,000	-648,000,000
Other liabilities	-83,000	-88,000,000	87,000,000	129,000,000
Net cash provided by (used in) operating activities	-3,072,000	-3,244,000,000	-726,000,000	1,179,000,000
Cash flows from investing activities	'	'	'	'
Increase in short-term financial instruments	-474,000	-500,000,000	-2,500,000,000	-2,223,000,000
Proceeds from disposal of available-for-sale investments	'	'	'	5,021,000,000
Decrease in short-term loans receivables	67,000	71,000,000	176,000,000	'
Proceeds from disposal of equity method investments	549,000	579,000,000	913,000,000	'
Purchase of property and equipment	-588,000	-620,000,000	-1,473,000,000	-1,566,000,000
Proceeds from disposal of property and equipment	16,000	17,000,000	8,000,000	2,000,000
Increase in capitalized software development costs	-897,000	-946,000,000	-2,842,000,000	-4,745,000,000
Reduction in cash balances upon deconsolidation of subsidiaries	'	'	-23,000,000	-515,000,000
Decrease in leasehold deposits	77,000	82,000,000	139,000,000	'
Disposal of other non-current assets	22,000	23,000,000	237,000,000	955,000,000
Others, net	57,000	60,000,000	173,000,000	278,000,000
Net cash used in investing activities	-1,171,000	-1,234,000,000	-5,192,000,000	-2,793,000,000
Cash flows from financing activities	'	'	'	'
Proceeds from borrowings	'	'	353,000,000	'
Repayment of borrowings	-586,000	-619,000,000	-228,000,000	-168,000,000
Net cash provided by (used in) financing activities	-586,000	-619,000,000	125,000,000	-168,000,000
Effect of exchange rate changes on cash and cash equivalents	-130,000	-136,000,000	-182,000,000	90,000,000
Net decrease in cash and cash equivalents	-4,959,000	-5,233,000,000	-5,975,000,000	-1,692,000,000
Cash and cash equivalents	'	'	'	'
Beginning of the year	34,547,000	36,455,000,000	42,430,000,000	44,122,000,000
End of the year	$29,588,000	31,222,000,000	36,455,000,000	42,430,000,000

Description_of_Business

Description of Business	12 Months Ended
	Dec. 31, 2013
Description of Business	'
Description of Business	'
	1. Description of Business
	Gravity Co., Ltd. ("Gravity") was incorporated on April 4, 2000 to engage in developing and distributing online games and other related businesses principally in the Republic of Korea and other countries in Asia, North and South America, and Europe. Gravity's principal product, Ragnarok Online, a multiplayer online role playing game, was commercially launched in August 2002.
	Gravity has five subsidiaries. NeoCyon, Inc. and Gravity Games Corporation (formerly Barunson Interactive Corporation) operate in the Republic of Korea, while the others, including Gravity Interactive, Inc., operate in other countries.
	Gravity CIS Co., Ltd. and Gravity RUS Co., Ltd. were excluded from the consolidation during the year ended December 31, 2012 since the Company no longer had control over them (See Note 2).
	On April 1, 2008, GungHo Online Entertainment, Inc. became a majority shareholder by acquiring 52.39% of the voting shares from Heartis Inc., the former majority shareholder, and also acquired additional 6.92% voting shares on June 23 and June 24, 2008. As of December 31, 2013, GungHo Online Entertainment, Inc. has majority ownership and voting rights (59.31%) over the Company.
	The Company conducts its business within one industry segment—the business of developing and distributing online game, software and other related services.

Significant_Accounting_Policie

Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Significant Accounting Policies

'

Significant Accounting Policies

'

2. Significant Accounting Policies

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of Gravity and the following subsidiaries (collectively referred to as the "Company"). All intercompany balances and transactions have been eliminated in the consolidation.

Subsidiary

Year of

Year of

Percentage of

Establishment

Obtaining

Ownership (%)

Control

Gravity Interactive, Inc.

2003

2003

100

Gravity Entertainment Corporation

2003

2004

100

NeoCyon, Inc.

2000

2005

96.11

Gravity Middle East & Africa FZ-LLC(*1)

2007

2007

100

Gravity Games Corporation(*2)

2003

2010

85.5

(*1)

In May 2007, the Company founded Gravity Middle East & Africa FZ-LLC, a wholly owned United Arab Emirates-based subsidiary. Gravity Middle East & Africa FZ-LLC has been in the process of liquidation since September 2008 and the liquidation process is not completed as of December 31, 2013.

(*2)

In October 2010, the Company acquired 50.83% ownership of Barunson Interactive Corporation. Based on the shareholders' meeting held on March 28, 2011, Barunson Interactive Corporation changed its name to Gravity Games Corporation. In August 2013, the Company additionally acquired 34.67% of the share capital of Gravity Games Corporation through additional capital increase. As a result of increase in ownership interest, additional paid-in capital was decreased by W319 million and non-controlling interest in subsidiaries increased by the same amount.

The list of subsidiaries that were excluded from consolidation during the year ended December 31, 2012 is as follows:

Subsidiary

Reason

Gravity CIS Co., Ltd.(*)

Surrendered rights for shares of its investment

Gravity RUS Co., Ltd.(*)

(*)

In August 2012, the Company surrendered rights for shares (ownership interest of 99.99% (Gravity RUS Co., Ltd.) and 100% (Gravity CIS Co., Ltd.)) of its investments in accordance with the laws of Russia.

Investments in entities where the Company holds more than 20% but less than 50% ownership or over which the Company has significant management influence are accounted for using the equity method of accounting and the Company's share of the investee's operations is included in Equity method investments. The Company follows the equity method of accounting for investments in its joint ventures Animation Production Committee, Gravity EU SAS and Ingamba LLC (Note 6).

Investments in limited partnerships are accounted for using the equity method in accordance with Accounting Standard Codification ("ASC") 323, Investment—Equity Method and Joint Ventures, which requires the use of the equity method unless the investor's interest "is so minor that the limited partner may have virtually no influence over partnership operating and financial policies." The Company follows the equity method of accounting for its investment in Online Game Revolution Fund No. 1 (Note 6).

The Company recorded its initial investments at cost and records its pro rata share of the earnings or losses in the results of operations of the equity method investees.

Use of estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include useful lives of fixed assets, salvage values and recovery of property and equipment; recoverability of goodwill and intangible assets; valuation allowances for receivables, realization of deferred income tax assets, and estimated life-cycle of the permanent in-game items. Actual results could differ materially from the estimates and assumptions used.

Risks and uncertainties

Industry and revenue

The industry in which the Company operates is subject to a number of industry-specific risks, including, but not limited to, rapidly changing technologies; significant numbers of new competitive entrants; dependence on key individuals; competition from similar products from larger companies; change in customer preferences; the need for the continued successful development, marketing, and selling of its products and services; and the need for positive cash flows from operations. The Company depends on one key product, "Ragnarok Online," for most of its revenues.

During the years ended December 31, 2011, 2012 and 2013, the Company generated 83%, 87% and 81% of its revenues from countries in Asia, respectively.

As of December 31, 2011, 2012, and 2013, GungHo Online Entertainment, Inc. is the only licensee whose related accounts receivable and total revenue exceeds 10% of the Company's total accounts receivable and total revenue, and the proportions are as follows (Note 16):

2011

2012

2013

Country

Licensee

Accounts

Revenues

Accounts

Revenues

Accounts

Revenues

Receivable

Receivable

Receivable

Japan

GungHo Online Entertainment, Inc.

45

%

50

%

34

%

51

%

30

%

38

%

The amounts included within the accounts receivable balance as of December 31, 2013 are W1,648 million from GungHo Online Entertainment, Inc. There are no other balances with any parties that represent greater than 10% of the total accounts receivable balance.

Concentrations of credit risk

Cash and cash equivalents and short-term financial instruments are potentially subject to concentration of credit risk. Cash and cash equivalents and short-term financial instruments are placed with several financial institutions, of which approximately 33% of such amounts are held at one financial institution.

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the product or the service has been delivered or rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured.

The Company derives most of its revenues from online game subscription revenue mainly from Ragnarok Online paid by users in Korea, the United States and Canada, and royalties and license fees paid by the licensees of the Company in overseas markets.

Online games—subscription revenue

Players can access certain games free of charge, but may purchase game points to acquire in-game premium features. Subscription revenue consists of revenues from (i) micro-transactions, (ii) subscription fees from Internet cafés and (iii) premium services for individual PC users. Micro-transaction fees for consumable in-game items are deferred when such in-game items are purchased by users and recognized as revenue when the purchased in-game items are used in the games while those for permanent in-game items are recognized ratably as revenues over the estimated life cycle of such in-game items. Micro-transaction fees for in-game items with limited time period are deferred and recognized as revenue in proportion to the number of days lapsed. All online game subscription fees and premium service fees are prepaid. Prepaid subscription fees from Internet cafés are deferred and recognized as revenue on a monthly basis based on actual hours used. Prepaid premium service fees from individual PC users are deferred and recognized as revenue on a monthly basis in proportion to the number of days lapsed.

For the sales of consumable in-game items, the Company recognizes revenues as the items are consumed. For the sales of permanent in-game items, the Company recognizes revenues by reflecting the estimated life-cycle of the permanent in-game items.

Online games—royalties and license fees

The Company licenses the right to sell and distribute its games in exchange for an initial prepaid license fee and guaranteed minimum royalty payments. The prepaid license fee revenues are recorded as deferred revenue and recognized ratably over the license period. If license agreements are renewed upon expiration of their terms, renewed license fees are deferred and recognized ratably over the new license period.

The Company generally provides its licensees with minimal post-contract customer support on its software products, consisting of technical supports and occasional unspecified upgrades, or enhancements during the contract term. The estimated costs of providing such support are insignificant and sufficient vendor-specific evidence does not exist to allocate the revenue from software and related integration projects to the separate elements of such projects, therefore all license revenue is recognized ratably over the life of the contract.

The guaranteed minimum royalty payments are recorded as deferred revenue and recognized as the royalties are earned. In addition, the Company receives a royalty payment based on a specified percentage of the licensees' sales, including game item revenues. These royalties that exceed the guaranteed minimum royalty are recognized on a monthly basis, as the related revenues are earned by the licensees.

Mobile games and applications revenue

Mobile games and applications revenue consists of (i) revenues from micro-transactions and a proportion of the per-download fees that users pay in cases where the Company directly provides mobile games services to users, such as in Korea; (ii) license fees and/or guaranteed minimum royalty payments, and royalty revenues from the Company's licensees to which it licenses the right to market and distribute its mobile games in overseas countries; (iii) contract prices, which are related to various development services and products provided by the Company to third parties, such as developing games embedded in mobile phones, mobile applications, and sound for mobile phones and appliances; (iv) revenues from mobile games operation service for third parties; and (v) intellectual property royalty revenues from third parties that develop and provide services for mobile games based on the Company's original intellectual property.

Micro-transaction fees are deferred when in-game items are purchased by users and recognized as revenue when the purchased in-game items are used in the game. Per-download fees are recognized on a monthly basis as they are earned. License fees are deferred and recognized ratably as revenue over the license period and guaranteed minimum royalty payments are deferred and recognized as the relevant royalty is earned. Royalty revenues are based on an agreed percentage of each of the licensees' revenues based on the licensees' sales from mobile games. Contract prices are recognized when the products or services have been delivered or rendered and the customers can begin use in accordance with the contractual terms. Revenues from mobile games operation service are based on an agreed percentage of each of the licensors' revenues based on the licensor's sales from the mobile games the Company operates on their behalf and recognized on a monthly basis after the licensor confirms its revenues based on the licensor's sales from the relevant mobile games during the month. Intellectual property royalty revenues are recognized on a monthly basis.

Mobile application development service revenues are recognized by measuring progress-to-completion under the percentage-of-completion method. If the Company does not have a sufficient basis to measure progress towards completion, revenues are recognized when it receives final acceptance from the customer that the services have been completed.

Character merchandising, animation and other revenue

Character merchandising, animation and other revenue consist of revenues from sales of console games, game character merchandising, animation and other services, including sales of goods related to mobile phones and Web site development and operation services for third parties.

Revenues from sales of console games are derived from a specified percentage of the publisher's sales after deductibles, including payments to the platform holder and others, and recognized on a quarterly basis as they are earned by the publisher. Royalty payments from game character merchandising are recognized on a quarterly basis as they are earned by the licensee. Contract prices for the Company's services provided to third parties are recognized when the products or services have been delivered or rendered and the customers can begin their use in accordance with the contractual terms.

The Company also sells goods related to mobile phones, such as accessories and USB data cable or provides contracted services, which is recorded in other revenue. The Company records these sales of goods when delivery has occurred and collectability of the fixed or determinable sales price is reasonably assured.

Reclassification

The Company reclassified certain revenue within Mobile games and applications revenue as Character merchandising, animation and other revenue in 2013 as this better represents the nature of the revenue. The same reclassification has been made to all prior periods to conform to the presentation of 2013. The reclassification has no effect on the Company's previously reported total net revenue and other line items on the consolidated financial statements.

Out-of-Period Adjustments

The accompanying 2013 consolidated statement of operations includes certain out-of-period adjustments primarily related to the understatement of revenues for in-game items of Won 981 million that were not properly deferred in fiscal year 2012. Management believes the impact of these items, both individually and in the aggregate, to the year ended December 31, 2013 and to prior years presented are not material.

Cash and cash equivalents

Cash equivalents consist of time deposits with a maturity of three months or less at the time of purchase.

Short-term financial instruments

Short-term financial instruments primarily include time deposits placed with financial institutions which have an original maturity greater than three months but less than one year.

Allowance for doubtful accounts

The Company maintains allowances for doubtful accounts receivable based upon the following information: an aging analysis of its accounts receivable balances, historical bad debt rates, repayment patterns, creditworthiness of its customers, and industry trend analysis.

The payment processing service providers are responsible for remitting to the Company the full subscription revenues generated in Korea after deducting their fixed service fees and charges, which range from approximately 1.4% to 15% and risk of loss or delinquencies are borne by such payment processing service providers.

Property and equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation for property and equipment is computed using the straight-line method over the following estimated useful lives:

Computer and equipment

4 years

Furniture and fixtures

4 years

Software

3 years

Vehicles

4 years

Leasehold improvements are depreciated on a straight-line basis over the estimated useful life of the assets or the lease term, whichever is shorter.

Routine maintenance and repairs are charged to expense as incurred. Expenditures which enhance the value or extend the useful lives of the related assets are capitalized.

Depreciation for property and equipment is allocated to cost of revenue, selling, general and administrative expenses or research and development expenses.

Accounting for the impairment of long-lived assets

Definite-lived tangible and intangible assets are amortized over their estimated useful life according to the nature and characteristics of each asset. The Company continually evaluates the reasonableness of the useful lives of these assets.

The Company reviews property and equipment and other long-lived assets for impairment whenever events or changes in circumstances indicate that carrying value may not be recoverable in accordance with ASC 360, Property, Plant, and Equipment. When the aggregate of future cash flows (undiscounted and without interest charges) is less than the carrying value of the asset, an impairment loss is recognized based on the fair value of the asset.

Intangible assets

Capitalized software development costs—online game development costs

The Company capitalizes certain software development costs relating to online games that will be distributed through subscriptions or licenses. The Company accounts for software development costs in accordance with ASC 985, Costs of Software to be Sold, Leased, or Marketed. Software development costs incurred prior to the establishment of technological feasibility are expensed when incurred and are included in research and development expense. Once a software product has reached technological feasibility, then all subsequent software development costs for that product are capitalized until the product is commercially launched. Technological feasibility is evaluated on a product-by-product basis, but typically occurs when the online game has a proven ability to operate on a multiplayer level for a large number of users. Technological feasibility of a product encompasses both technical design documentation and game design documentation.

The Company amortizes capitalized software development costs relating to games and records such costs as a component of cost of revenues. Amortization is determined as the greater of the amount computed using the ratio of current gross revenues for a game to the total of current and anticipated future gross revenues for that game or the straight-line method amount over the remaining estimated economic life of the game. Amortization starts when a game is available for general release to public users. The Company continually evaluates the reasonableness of the economic life of the capitalized software development costs based on the average life cycle of the games whenever each new game is commercially launched or acquired.

Capitalized software development costs for games, net of accumulated amortization, at December 31, 2012 and 2013 were W17,170 million and W12,542 million, respectively. Amortization expense for the years ended December 31, 2011, 2012 and 2013 was W25 million, W3,852 million and W4,613 million, respectively.

The Company evaluates the recoverability of capitalized software development costs on a product-by-product basis. The recoverability of capitalized software development costs is evaluated based on the expected performance of the specific products to which the costs relate. Criteria used to evaluate expected product performance include: historical performance of comparable products using comparable technology; orders for the product prior to its release; and estimated performance of a sequel product based on the performance of the product on which the sequel is based. Capitalized costs for those products that are cancelled are expensed in the period of cancellation. In addition, an impairment loss shall be recorded when management's forecast for a particular game indicates that unamortized capitalized costs exceed the net realizable value of that asset. Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established, as well as in the ongoing assessment of the recoverability of capitalized costs. In evaluating the recoverability of capitalized costs, the assessment of expected product performance utilizes forecasted sales amounts and estimates of additional development costs to be incurred. If revised forecasted or actual product sales are changed from the original forecasted amounts utilized in the initial recoverability analysis, the actual impairment charge may be larger than originally estimated in any given period.

Impairment losses on capitalized software development cost for games for the year ended December 31, 2013 were W534 million.

Capitalized software development costs—website and internal use software development costs

The Company accounts for website and internal use software development cost in accordance with ASC 340, Internal Use Software. For website and internally used software development costs, the Company expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance of the existing websites and software. Costs incurred in the development phase are capitalized and amortized over the estimated product life.

Capitalized software development costs for website and internal use software at December 31, 2012 and 2013 were W217 million and W90 million, respectively.

Impairment losses on capitalized software development cost for website and internal use software for the year ended December 31, 2013 were W245 million.

Research and development costs

Research and development expenses consist primarily of payroll and other overhead expenses which are all expensed as incurred (i) until technological feasibility of an online game is reached or (ii) until commercial operation of a mobile game commences. Once technological feasibility of an online game is reached, these costs are capitalized and, once commercial operation commences, amortized as cost of revenues.

Goodwill

Goodwill is accounted for under ASC 350, Intangibles—Goodwill and Other, which requires that goodwill and indefinite-lived intangible assets are not amortized, but instead be tested at least annually for impairment, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of these assets below their carrying amount. Such an event would include unfavorable variances from established business plans, significant changes in forecasted results or volatility inherent to external markets and industries, which are periodically reviewed by the Company's management.

Specifically, qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the relevant events and circumstances are assessed. If, after assessing the totality of events or circumstances, it is determined that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step process of the goodwill impairment test is not performed. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first step of the two-step goodwill impairment test is performed. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized immediately in an amount equal to that excess. The goodwill impairment test is carried out at the reporting unit, which is either an operating division or a subdivision, for which stand-alone financial information is available to the management personnel of such division or subdivision for evaluating operating results.

Acquired in-process research and development ("IPR&D") technology

Acquired IPR&D assets are considered indefinite-lived intangible assets and are not subject to amortization. An IPR&D asset must be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the IPR&D asset with its carrying amount. If the carrying amount of the IPR&D asset exceeds its fair value, an impairment loss must be recognized in an amount equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the IPR&D asset will be its new accounting basis. Subsequent reversal of a previously recognized impairment loss is prohibited. The initial determination and subsequent evaluation for impairment of the IPR&D asset requires management to make significant judgments and estimates. Once an IPR&D project has been completed, the useful life of the IPR&D asset is determined and amortized accordingly. If an IPR&D project has been abandoned, it is immediately expensed.

Advertising

The Company expenses advertising costs as incurred. Advertising expense was W3,121 million, W4,585 million and W2,852 million for the years ended December 31, 2011, 2012 and 2013, respectively.

Accrued severance benefits and pension plan

Employees and directors with one year or more of service are entitled to receive a lump-sum payment upon termination of their employment with the Company based on the length of service and rate of pay at the time of termination. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date in compliance with relevant laws in Korea. The annual severance benefits expense charged to operations is calculated based upon the net change in the accrued severance benefits payable at the balance sheet date based on the guidance of ASC 715, Compensation—Retirement Benefits.

Gravity and NeoCyon introduced a defined contribution pension plan in 2005 and 2011, respectively, and provide an individual account for each participant. A plan's defined contributions to an individual's account are to be made for periods in which that individual renders services, the net pension cost for a period shall be the contribution called for in that period.

Foreign currency translation

The Korean parent company and its subsidiaries use their local currencies as their functional currencies. The financial statements of the subsidiaries in functional currencies other than the Korean Won are translated into the Korean Won in accordance with ASC 830, Foreign Currency Matters. All assets and liabilities of the foreign subsidiaries are translated into the Korean Won at the exchange rate in effect at the end of the period, and capital accounts are determined to be of a permanent nature and are therefore translated using historical exchange rates. Revenues and expenses are translated at average exchange rates during the period. The effects of foreign currency translation adjustments are reflected in the cumulative translation adjustment account, reported as a separate component of comprehensive income in shareholders' equity.

Foreign currency transactions

Net gains and losses resulting from foreign exchange transactions are included in foreign currency income (losses) in the consolidated statements of comprehensive income (loss).

Income taxes

The Company accounts for income taxes under the provisions of ASC 740, Income Taxes. Under ASC 740, income taxes are accounted for under the asset and liability method. Deferred income taxes are determined based upon differences between the financial reporting and tax bases of assets and liabilities at currently enacted statutory tax rates for the years in which the differences are expected to reverse.

A valuation allowance is provided on deferred income tax assets to the extent that it is more likely than not that such deferred income tax assets will not be realized. The total income tax provision includes current tax expenses under applicable tax regulations and the change in the balance of deferred income tax assets and liabilities.

The Company follows ASC 740, Income Taxes, which prescribes a recognition threshold and measurement attribute for tax positions taken or expected to be taken in a tax return. This standard also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The evaluation of a tax position in accordance with this standard is a two-step process. In the first step, recognition, the Company determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step addresses measurement of a tax position that meets the more-likely-than-not criteria. The tax position is measured at the largest amount of benefit that has a likelihood of greater than 50 percent of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in (a) an increase in a liability for income taxes payable or a reduction of an income tax refund receivable, (b) a reduction in a deferred income tax asset or an increase in a deferred income tax liability or (c) both (a) and (b).

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset and liability. As a basis for considering such assumptions, a fair value hierarchy has been established that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows:

•

Level 1—Quoted prices in active exchange markets involving identical assets or liabilities.

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Inputs that are generally unobservable and typically reflect management estimates of assumptions and inputs using a binomial lattice model as the valuation technique.

Fair Value of Financial Instruments

ASC Topic 825, Financial Instruments, requires disclosure of the fair value of financial instruments for which the determination of fair value is practicable. The fair values of the Company's cash and cash equivalents, short-term financial instruments, accounts receivable and other current assets, accounts payable and other current liabilities approximate carrying values due to the short maturity of these instruments.

Earnings (losses) per share

Basic earnings (losses) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for all periods. Diluted earnings (losses) per share is computed by dividing net earnings (losses) by the weighted average number of common shares outstanding, increased by common stock equivalents. Common stock equivalents are calculated using the treasury stock method and represent incremental shares issuable upon exercise of the Company's outstanding stock options. However, potential common shares are not included in the denominator of the diluted earnings (losses) per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.

Reclassification

Certain reclassifications have been made to the 2011 and 2012 consolidated financial statements to conform to the 2013 presentation.

Recent accounting pronouncements

In December 2011 and January 2013, the Financial Accounting Standards Board ("FASB") issued FASB Accounting Standards Update ("ASU") 2011-11, Disclosures about Offsetting Assets and Liabilities, and ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, respectively, which create new disclosure requirements about the nature of an entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The new disclosures are designed to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards ("IFRS"). The adoptions of ASU 2011-11 and 2013-01 did not have a material impact on the Company's consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, as an update to the authoritative guidance related to testing indefinite-lived intangible assets for impairment. This update gives an entity the option to first consider certain qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. This update is effective for the indefinite-lived intangible asset impairment test performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The Company has early adopted this ASU and the adoption had no material impact on the Company's consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to require new disclosures about reclassifications from accumulated other comprehensive income to net income. These disclosures may be presented on the face of the statements or in the notes to the consolidated financial statements. The standards update is effective for fiscal years beginning after December 15, 2012 with early adoption permitted. The Company adopted the provisions of ASU 2013-02 in the year ended December 31, 2013, and has presented its requirements in the consolidated statements of comprehensive income (loss).

In March 2013, the FASB issued ASU 2013-05, Foreign Currency Matters, to clarify the accounting for the release of a cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.

In July 2013, the FASB issued ASU 2013-11, Income Taxes, which requires the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the Consolidated Balance Sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The new standard requires adoption on a prospective basis in the first quarter of 2015; however, early adoption is permitted. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.

Convenience_Translation_into_U

Convenience Translation into United States Dollar Amounts	12 Months Ended
	Dec. 31, 2013
Convenience Translation into United States Dollar Amounts	'
Convenience Translation into United States Dollar Amounts	'
	3. Convenience Translation into United States Dollar Amounts
	The Company reports its consolidated financial statements in Korean Won. The United States dollar ("US dollar") amounts disclosed in the accompanying consolidated financial statements are presented solely for the convenience of the reader, and have been converted at the rate of 1,055.25 Korean Won to one US dollar, which is the noon buying rate of the U.S. Federal Reserve Board in effect on December 31, 2013. Such translations should not be construed as representations that the Korean Won amounts represent, have been, or could be, converted into US dollars at that or any other rate.

Restricted_Assets

Restricted Assets	12 Months Ended
	Dec. 31, 2013
Restricted Assets	'
Restricted Assets	'
	4. Restricted Assets
	As of December 31, 2013, one of the Company's subsidiaries, Gravity Games Corporation has a restricted long-term financial instrument amounting to W5 million provided to a financial institution as a guarantee for the issuance of credit card. The Company records this restricted long-term investment as other non-current assets.

Allowance_for_doubtful_account

Allowance for doubtful accounts	12 Months Ended
	Dec. 31, 2013
Allowance for doubtful accounts	'
Allowance for doubtful accounts	'
	5. Allowance for doubtful accounts
	Changes in the allowance for accounts receivable for the years ended December 31, 2011, 2012 and 2013 are as follows:
		2011			2012			2013
		(In millions of Korean Won)
	Balance at beginning of year	W	5		W	8		W	9
	Provision for allowances		21			6			23
	Reversal of previous provision		—			—			—
	Write-offs		(18	)		(5	)		—
	Balance at end of year	W	8		W	9		W	32
	Changes in the allowance for loan receivable for the years ended December 31, 2011, 2012 and 2013 are as follows:
		2011			2012			2013
		(In millions of Korean Won)
	Balance at beginning of year	W	—		W	1,000		W	1,200
	Provision for allowances		1,000			200			—
	Reversal of previous provision		—			—			—
	Write-offs		—			—			—
	Balance at end of year	W	1,000		W	1,200		W	1,200
	In 2011, the Company amended the loan agreement with Naru Entertainment Corporation ("Naru") so that W300 million of the loan should be paid by Naru in 2012 from funding provided by a third party, and the rest of the loan, amounting to W1,000 million, and its accrued interest at 8% annually, will be paid by revenue sharing payments in the future.
	As of December 31, 2013, short-term and long-term loans receivable due from Naru were W200 million and W1,000 million, respectively. The Company provided bad debt reserve of W1,000 million in 2011. Additional reserve of W200 million was provided for bad debt in 2012 as Naru reported the closure of business during 2012.

Equity_Method_Investment

Equity Method Investment	12 Months Ended
	Dec. 31, 2013
Equity Method Investment	'
Equity Method Investment	'
	6. Equity Method Investment
	The Company's equity method investment balance is comprised of the following at December 31:
		2012			2013
		(In millions of Korean Won)
	Animation Production Committee	W	—			—
	Online Game Revolution Fund No. 1		647			—
	Gravity EU SAS		—			—
	Ingamba LLC		—			—
	Total equity method investments	W	647		W	—
	The Company's equity income (loss) on investments is comprised of the following for the years ended December 31:
		2011			2012			2013
		(In millions of Korean Won)
	Animation Production Committee	W	—		W	—		W	—
	Online Game Revolution Fund No. 1		(38	)		(51	)		(18	)
	Gravity EU SAS		(70	)		(257	)		—
	Ingamba LLC		(134	)		(25	)		—
	Total equity income (loss) on investments	W	(242	)	W	(333	)	W	(18	)
	Animation Production Committee
	In April 2004, the Company's subsidiary, Gravity Entertainment Corporation, invested ¥123 million (W1,358 million) for a 30% interest in "Animation Production Committee," a joint venture, which was incorporated in Japan to produce an animation of Ragnarok Online. The investment was accounted for under the equity method of accounting. In 2006, the Company discontinued applying the equity method as the investment was reduced to zero. The Company does not have any contractual obligation to fund the further losses of the joint venture.
	Online Game Revolution Fund No. 1
	In 2005, the Company entered into a limited liability partnership agreement to invest the committed amount of ¥1,000 million (W8,713 million) in Online Game Revolution Fund No. 1, a limited liability partnership (the "Partnership"). In 2005, 2006, 2008 and 2009, the Company invested ¥100 million (W869 million), ¥150 million (W1,245 million), ¥642 million (W6,054 million) and ¥18 million (W229 million), respectively. As of December 31, 2012, the Company, SoftBank Corporation and GungHo Online Entertainment, Inc. ("GungHo") had interests of 16.39%, 49.18% and 8.20%, respectively, in Online Game Revolution Fund No. 1. The Company had 16.39% interest in the Partnership as a limited partner, and could not significantly influence the Partnership's operation and financial policies per the limited liability partnership agreement. However, the Company accounted for the investment under the equity method of accounting in accordance with ASC 323, Investment—Equity Method and Joint Ventures, which requires the use of the equity method unless the investors' interest is so minor that the limited partner may have virtually no influence over the Partnership's operating and financial policies. The Company recorded the losses of the Partnership as equity amounting to W38 million, W51 million and W18 million in 2011, 2012 and 2013, respectively.
	This Partnership was operated in Japan and the objective of the Partnership was to invest in business relating to online games for the benefit of all the partners. The Partnership invested in eight games since its operations began.
	On December 31, 2010, the term of the Partnership expired and it was liquidated on June 18, 2013. The Company received liquidation proceeds amounting to W579 million and the entire accumulated other comprehensive income balance of W1,234 million that relates to the Partnership was reclassified to other income, which was partially offset by the difference between the liquidation proceeds and the carrying amount of the Partnership.
	Ingamba LLC
	In June 2010, the Company invested Russian Ruble 13 million (W502 million), which represented 25% of Ingamba LLC's total capital, in order to distribute the Company's games in Russia. The investment in Ingamba LLC was accounted for as an equity method investment. The Company recorded gain on investments as equity amounting to W13 million in 2010 and loss on investments as equity amounting to W134 million and W25 million in 2011 and 2012, respectively. Ingamba LLC was disposed for $800 thousand (W851 million) in May 2012 and the related gain on disposal of equity investments of W528 million was recognized.
	Gravity EU SAS
	In 2011, Gravity EU SASU issued new shares to new investors and the Company and then transformed into a joint venture named Gravity EU SAS. Due to a dilution of the Company's interest in Gravity EU SASU, the Company's ownership of the investee decreased from 100% to 25%. Gravity EU SAS was excluded from the consolidation during the year ended December 31, 2011 since the Company no longer had control over it. Upon deconsolidation, the Company recorded its retained interest in Gravity EU SAS at fair value at the date of deconsolidation. As a result, a gain on loss of control in a subsidiary of W548 million was recognized in the consolidated statements of comprehensive income (loss) in 2011. And the entire accumulated other comprehensive income balance that relates to Gravity EU SASU was recognized as a part of the gain. Gravity EU SAS was accounted for by using the equity method since August 2011 and recognized equity loss on investments amounting to W70 million and W257 million in 2011 and 2012, respectively. In 2012 and 2013, the Company discontinued applying the equity method as the investment was reduced to zero. The Company does not have any contractual obligation to fund further losses of Gravity EU SAS. As the investments in equity securities were written down to zero, the equity method accounting ceased and the equity loss on investments of W258 million was not recorded for the year ended December 31, 2013.

Fair_value_of_financial_instru

Fair value of financial instruments	12 Months Ended
	Dec. 31, 2013
Fair value of financial instruments	'
Fair value of financial instruments	'
	7. Fair value of financial instruments
	The Company adopted ASC 820, Fair Value Measurements and Disclosures effective January 1, 2009, for all financial assets and liabilities as required. This statement defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and the Company considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of non-performance.
	The Company's financial instruments are measured and recorded at fair value, except for cost method investments. The Company's non-financial assets, such as goodwill, intangible assets, and property and equipment, are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized.
	As discussed in Note 2, the Company adopted ASC 825, which permits entities to choose to measure financial instruments and certain other items at fair value and consequently report unrealized gains and losses on these items in earnings. ASC 825 was effective for the Company's fiscal year beginning January 1, 2009. The Company has elected the fair value option to measure its short-term available-for-sale investments.
	The estimated fair value of financial assets is determined by the Company, using available market information and valuation methodologies considered to be appropriate. However, considerable judgment is required in interpreting market data to develop the estimates of fair value.
	As of December 31, 2012 and 2013, the Company's financial assets consist of cash, short-term financial instruments, accounts receivable, other current assets, accounts payable, and other current liabilities. The Company's carrying amounts of cash and cash equivalents, short-term financial instruments, accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value due to the short-term nature of these instruments.

Property_and_Equipment_Net

Property and Equipment, Net	12 Months Ended
	Dec. 31, 2013
Property and Equipment, Net	'
Property and Equipment, Net	'
	8. Property and Equipment, Net
	Property and equipment as of December 31, 2012 and 2013 consist of the following:
		2012			2013
		(In millions of Korean Won)
	Computer and equipment	W	10,867		W	7,212
	Furniture and fixtures		2,100			2,149
	Vehicles		89			78
	Capital lease assets		1,140			1,287
	Leasehold improvements		771			746
	Software externally-purchased		11,531			11,898
			26,498			23,370
	Less accumulated depreciation		(22,974	)		(21,055	)
		W	3,524		W	2,315
	Depreciation expenses for the years ended December 31, 2011, 2012 and 2013 were W1,651 million, W1,903 million and W1,852 million, respectively.

Goodwill_and_other_intangible_

Goodwill and other intangible assets	12 Months Ended
	Dec. 31, 2013
Goodwill and other intangible assets	'
Goodwill and other intangible assets	'
	9. Goodwill and other intangible assets
	Capitalized software development cost and other intangible assets as of December 31, 2012 and 2013 consist of the following:
		At December 31, 2012											At December 31, 2013
		Gross			Accumulated			Accumulated			Net		Gross		Accumulated			Accumulated			Net
		Carrying			Amortization			Impairment			Carrying		Carrying		Amortization			Impairment			Carrying
		Amount									Amount		Amount								Amount
		(In millions of Korean Won)
	Capitalized software development cost	W	29,010		W	(11,623	)	W	—		W	17,387	W	29,558	W	(16,236	)	W	(779	)	W	12,543
	Acquired intangible assets
	Product technology		18,536			(11,565	)		(4,609	)		2,362		18,536		(12,503	)		(6,033	)		—
	IPR&D technology		8,503			—			(8,503	)		—		8,503		—			(8,503	)		—
	Trademarks		520			(350	)		—			170		549		(380	)		(3	)		166
	Others		2,204			(690	)		(1,026	)		488		3,078		(1,089	)		(1,989	)		—
	Total	W	58,773		W	(24,228	)	W	(14,138	)	W	20,407	W	60,224	W	(30,208	)	W	(17,307	)	W	12,709
	The Company capitalized W5,261 million, W2,303 million and W548 million of R&D costs in accordance with ASC 985, Costs of Software to be Sold, Leased, or Marketed in 2011, 2012 and 2013, respectively.
	All of the Company's intangible assets other than goodwill and IPR&D are subject to amortization. No significant residual value is estimated for the intangible assets. Aggregate amortization expenses for intangible assets for the years ended December 31, 2011, 2012 and 2013 were W2,631 million, W6,479 million and W5,980 million, respectively.
	The Company recognized impairment loss of W779 million for capitalized software development cost (Ragnarok Odyssey Ace, Ragnarok Online Guild Masters, and Game Station, a mobile game service platform) and W3 million for trademarks in 2013.The Company recognized impairment losses of W2,225 million and W1,424 million for product technology (Dragonica and Jeweled Planet) in 2012 and 2013, respectively. Impairment charges amounting to W227 million and W963 million for other intangible assets were recognized in 2012 and 2013, respectively. Additionally, the Company recognized an impairment loss of W8,503 million for IPR&D technology (East Road) in 2012.
	Despite the Company's various efforts, a significant decrease in revenue of Dragonica was noted in the third quarter of 2012 and fourth quarter of 2013, which were trigger events for the impairment analysis of Dragonica. As the carrying amount of Dragonica exceeded the sum of its estimated undiscounted future cash flows from future use, Dragonica was considered fully impaired. The Company recognized impairment losses of W2,161 million and W1,424 million for Dragonica in 2012 and 2013, respectively.
	Eternal Destiny was commercially launched in August 2011, but did not gain popularity in market. The Company ceased offering commercial service in November 2011, which was a triggering event for the impairment of Eternal Destiny. As the carrying amount of Eternal Destiny exceeded the sum of its estimated undiscounted future cash flows from future use, Eternal Destiny was considered fully impaired. An impairment charge amounting to W799 million was recognized in 2011.
	Maestia was commercially launched in August 2012, but did not gain popularity in market. As the carrying amount of Maestia exceeded the sum of its estimated undiscounted future cash flows from future use, Maestia was considered fully impaired. An impairment charge amounting to W237 million was recognized in 2013.
	Requiem Returns W was commercially launched in June 2013, but did not gain popularity in market. As the carrying amount of Requiem Returns W exceeded the sum of its estimated undiscounted future cash flows from future use, Requiem Returns W was considered fully impaired. An impairment charge amounting to W382 million was recognized in 2013.
	Steal Fighter was commercially launched in February 2013, but did not gain popularity in market. The Company ceased offering commercial service in February 2014, which was a triggering event for the impairment of Steal Fighter. As the carrying amount of Steal Fighter exceeded the sum of its estimated undiscounted future cash flows from future use, Steal Fighter was considered fully impaired. An impairment charge amounting to W344 million was recognized in 2013.
	In addition, the Company decided to cease its development of East Road due to the low likelihood that the game will be commercially successful, which triggered impairment of East Road in 2012. As the carrying amount of East Road exceeded the sum of its estimated undiscounted future cash flows from future use, East Road was considered fully impaired in 2012. The Company recognized an impairment loss of W8,503 million. An impairment loss of W227 million was recognized for other intangible assets due to the significant decrease in the revenue related to such assets in 2012.
	The Company developed Ragnarok Odyssey Ace, a PS VITA game, in a joint effort with GungHo Online Entertainment, Inc. and commercialized the game in August 2013. The carrying amount of Ragnarok Odyssey Ace, a PS VITA game, exceeded the sum of its estimated undiscounted future cash flows from future use and it was a trigger event for the impairment analysis of Ragnarok Odyssey Ace, a PS VITA game. The Company recognized impairment losses of W381 million and fully wrote it off due to impairment in 2013.
	The Company developed Ragnarok Online Guild Masters and commercialized the game in October 2011, but did not gain popularity in market. The Company ceased offering commercial service in March 2013, which was a triggering event for the impairment of Ragnarok Online Guild Masters. As the carrying amount of Ragnarok Online Guild Masters exceeded the sum of its estimated undiscounted future cash flows from future use, Ragnarok Online Guild Masters was considered fully impaired. An impairment charge amounting to W154 million was recognized in 2013.
	The Company developed Game Station, a mobile game service platform, but the carrying amount of Game Station, a mobile game service platform, exceeded the sum of its estimated value in use. An impairment charge amounting to W244 million was fully recognized in 2013, as the carrying amount of Game Station, a mobile game service platform, exceeded its present value of the future cash flows expected to be derived.
	Changes in goodwill balances for the years ended December 31, 2011, 2012 and 2013 are as follows:
		2011			2012			2013
		(In millions of Korean Won)
	Balance at beginning of the year
	Goodwill	W	8,232		W	8,232		W	8,232
	Accumulated impairment losses		(241	)		(755	)		(4,369	)
			7,991			7,477			3,863
	Impairment losses		(514	)		(3,614	)		(2,653	)
	Balance at end of the year
	Goodwill		8,232			8,232			8,232
	Accumulated impairment losses		(755	)		(4,369	)		(7,022	)
		W	7,477		W	3,863		W	1,210
	We performed our annual impairment test for goodwill at all of our reporting units using data as of December 31, 2013. In performing the valuations, we used cash flows, which reflected management's forecasts and discount rates which reflect the risks associated with the current market. Prior to performing the two-step impairment test for goodwill, we performed a qualitative assessment for the reporting units NeoCyon and Gravity Games.
	In 2013, we performed the annual impairment test for goodwill for NeoCyon, the fair value of the business reporting unit NeoCyon was determined to be greater than its book value. Therefore, we concluded not to recognize impairment loss for NeoCyon.
	In performing the annual impairment test for goodwill for Gravity Games, the fair value of the business reporting unit Gravity Games was determined to be lower than its book value. Therefore, during the fiscal year ended December 31, 2013, we recorded impairment losses of Won 2,653 million (US$2,514 thousand) in reporting unit of Gravity Games due to the overall decline in the fair value of the reporting unit and uncertainty in the future. The fair value of the reporting unit was estimated principally using the expected present value of the future cash flows.
	As of December 31, 2013, the fair value of the business reporting unit for Gravity Games Corporation was determined to be lower than the book value of the business reporting unit for Gravity Games Corporation. Therefore, in 2013, the Company recorded an impairment loss of W2,653 million in the reporting unit of Gravity Games Corporation. As a result of impairment, the goodwill for the reporting unit of Gravity Games Corporation was fully written off as of December 31, 2013.
	The impairment was due to declines in projected future revenues as compared to the projections of revenue used for the 2012 annual impairment test. During the fiscal year ended December 31, 2011 and 2012, the Company recorded an impairment loss of W514 million and W3,614 respectively, for the Gravity Games Corporation reporting unit due to the decline in the fair value of the reporting unit and a decline in projected future revenues.
	Expected amortization expenses related to the current net carrying amount of intangible assets are as follows:
		(In millions of Korean Won)
	2014		4,006
	2015		3,964
	2016		3,964
	2017		675
	2018 and thereafter		100
			12,709

Accrued_Severance_Benefits

Accrued Severance Benefits	12 Months Ended
	Dec. 31, 2013
Accrued Severance Benefits.	'
Accrued Severance Benefits	'
	10. Accrued Severance Benefits
	Changes in accrued severance benefits for the years ended December 31, 2011, 2012 and 2013 are as follows:
		2011			2012			2013
		(In millions of Korean Won)
	Balance at beginning of year	W	1,031		W	916		W	683
	Provisions for severance benefits		586			96			67
	Severance payments		(648	)		(190	)		(444	)
	Terminated but not yet paid		(53	)		(139	)		(43	)
	Balance at end of year	W	916		W	683		W	263
	In 2005, Gravity introduced a defined contribution pension plan ("Pension Plan") in accordance with the Employee Benefit Security Act of Korea and entered into a nonparticipating defined contribution insurance contract with a life insurance company. Gravity's contribution to the Pension Plan was W1,085 million, W1,190 million and W1,114 million in 2011, 2012 and 2013, respectively. In 2011, NeoCyon, Inc. also introduced a pension plan. W97 million, W390 million, and W467 million were recognized as a cost for such pension plan in 2011, 2012 and 2013, respectively. For the contributions already paid, Gravity and NeoCyon will have no legal or constructive obligation to pay further amounts and therefore no severance benefits were accrued. The accrued severance benefits recorded at December 31, 2013 relate to the other subsidiaries which have not implemented a Pension Plan.

Commitments_and_Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2013
Commitments and Contingencies.	'
Commitments and Contingencies	'
	11. Commitments and Contingencies
	As of December 31, 2013, the Company has outstanding licensing agreements for Ragnarok Online with 10 companies internationally. Based on the agreements with the licensees, the Company receives certain amounts (24% to 40%) of each licensee's revenues as royalty.
	As of December 31, 2013, the Company has contracts for the exclusive rights of Ragnarok Online II game distribution and sales with GungHo Online Entertainment, Inc. in Japan, AsiaSoft Corporation Public Co., Ltd. in Thailand, Level up! Inc. in the Philippines, AsiaSoft Online Pte. Ltd., in Singapore and Malaysia, AsiaSoft Corporation Public Co., Ltd. in Vietnam, PT. Lyto Datarindo Fortuna in Indonesia and Level up! Interactive S.A. in Brazil. The contract periods of these license agreements range from two to four years after commercialization in each geographical location.
	As of December 31, 2013, the Company has outstanding licensing agreements for Dragonica with six companies internationally. Based on the agreements with the licensees, the Company receives certain amounts (20% to 25%) of each licensee's revenues as royalty.
	As of December 31, 2013, the license fee the Company has committed to pay upon the commercial launches of the licensed games were W200 million and W450 million for Steal Fighter and a Web browser-based game, respectively. But the agreement for Steal Fighter was terminated in January 2014.
	The Company entered into various capital lease agreements to utilize game servers. The Company made principal and interest payments of $151 thousand (W175 million) and $52 thousand (W61 million) in 2011 and $203 thousand (W216 million) and $36 thousand (W39 million) in 2012, respectively. In 2013, the Company entered into additional capital lease payment agreements which increased the total capital lease payment by $173 thousand (W182 million). Therefore, the Company made principal and interest payments of $243 thousand (W256 million) and $22 thousand (W23 million) in 2013, respectively.
	Future minimum lease payments for the leases as of December 31, 2013, are as follows:
		2014				2015				2016
		Principal		Interest		Principal		Interest		Principal		Interest
		(In thousands of US dollars)
	Capital lease	$	137	$	11	$	107	$	4	$	14		—
			(In millions of Korean Won)
		W	145	W	12	W	113	W	4	W	15		—
	In addition to the capital lease above, the Company leases certain properties which are considered to be operating leases. Rental expenses incurred under these operating leases were W2,949 million, W2,796 million and W2,342 million for the years ended December 31, 2011, 2012 and 2013, respectively. The Company entered into a lease agreement with Korea Software Industry Promotion Agency in 2008 and recorded a guarantee deposit of W1,247 million as of December 31, 2013.
	Future minimum rental payments for the operating leases as of December 31, 2013, are as follows:
		(In millions of Korean Won)
	2014	W	2,251
	2015		135
	2016		81
	2017		—
		W	2,467
	Litigation
	In April 2009, the Company repatriated W1,820 million ($1.4 million) from Gravity Middle East & Africa FZ-LLC ("ME&A"), which was the primarily remaining net assets of ME&A. ME&A has been in the process of liquidation since September 2008. In August 2010, the director and manager of ME&A, as a representative of ME&A, filed a lawsuit against the Company and some of its directors and officers on the subject of them being accused of the repatriation of ME&A claiming an aggregate of W1,628 million (AED 5 million and related interest plus litigation costs). In November 2011, the case was decided in favor of the plaintiff and the Company filed an appeal with the Seoul High Court and paid a deposit in court amounting to W4,140 million to proceed with the appeals against the dismissal of the case regarding the repatriation of capital funds from ME&A. The court ruled partially in favor of the plaintiff in December 2012. The Company filed a final appeal in December 2012 and the plaintiff filed a final appeal in January 2013 with the Supreme Court of Korea. No amount was accrued because the above case would not result in a loss for the Company.
	In May 2010, former executive filed another lawsuit claiming employment termination without cause, amounting to W50 million. The case was dismissed and the plaintiff filed an appeal with the Seoul High Court in April 2011. The Court dismissed the plaintiff's appeal in March 2013 and the plaintiff filed a final appeal with the Supreme Court of Korea in April 2013. The Supreme Court of Korea ceased to hear such appeals and ruled such appeals dismissed in July 2013.
	Furthermore, in June 2011, the former executive filed another lawsuit against the Company claiming nullity of dismissal and seeking remuneration, amounting to W110 million due regarding the remainder of his term. In June 2012, the case was decided in favor of the Company and the plaintiff filed an appeal with the Seoul High Court. In January 2013 the appeal was withdrawn by the plaintiff.

Shareholders_Equity

Shareholders' Equity	12 Months Ended
	Dec. 31, 2013
Shareholders' Equity	'
Shareholders' Equity	'
	12. Shareholders' Equity
	As of December 31, 2013, Gravity is authorized to issue a total of 40 million shares with a par value of W500 per share, in registered form, consisting of common shares and non-voting preferred shares. Of this authorized amount, Gravity is authorized to issue up to 2 million non-voting preferred shares. Under the articles of incorporation, holders of non-voting preferred shares are entitled to receive dividends of not less than 1% and up to 15% of the par value of such shares, the exact rate to be determined by Gravity's Board of Directors at the time of issuance, provided that the holders of preferred shares are entitled to receive dividend at a rate not lower than that determined for holders of common shares. Gravity does not have any non-voting preferred shares outstanding.
	As of December 31, 2013, the Company had a total of 6,948,900 common shares issued and outstanding. All of the issued and outstanding shares are fully paid and are registered.

Earnings_losses_Per_Share

Earnings (losses) Per Share	12 Months Ended
	Dec. 31, 2013
Earnings (losses) Per Share	'
Earnings (losses) Per Share	'
	13. Earnings (losses) Per Share
	The components of basic and diluted earnings (losses) per share are as follows:
		2011		2012			2013
		(In millions of Korean Won,
		except per share data)
	Net income (loss) available for common shareholders (A)	W	14,928	W	(12,224	)	W	(18,588	)
	Weighted average outstanding shares of common shares (B)		6,948,900		6,948,900			6,948,900
	Earnings (losses) per share Basic and diluted (A/B)	W	2,148	W	(1,759	)	W	(2,675	)

Income_Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2013
Income Taxes	'
Income Taxes	'
	14. Income Taxes
	Income tax expenses (benefit) for the years ended December 31, 2011, 2012 and 2013 consist of the following:
		2011			2012			2013
		(In millions of Korean Won)
	Income (loss) before income taxes
	Domestic	W	4,878		W	(16,761	)	W	(13,403	)
	Foreign		159			(862	)		(1,222	)
			5,037			(17,623	)		(14,625	)
	Current income taxes
	Domestic		3,694			3,715			2,634
	Foreign		70			4			—
			3,764			3,719			2,634
	Deferred income taxes (benefit)
	Domestic		(11,726	)		(1,135	)		2,474
	Foreign		—			—			—
			(11,726	)		(1,135	)		2,474
	Total income tax expenses (benefit)	W	(7,962	)	W	2,584		W	5,108
	Income taxes recognized directly in other comprehensive income for the years ended December 31, 2012 and 2013 are W104 million and W17 million, respectively.
	The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities as of December 31, 2012 and 2013 are as follows:
		2012			2013
		(In millions of Korean Won)
	Deferred tax assets
	Accrued expense	W	342		W	294
	Allowance for doubtful		660			1,148
	Investments in subsidiaries and equity method investees		1,345			232
	Depreciation and amortization		1,032			743
	Deferred revenue		736			934
	Provisions for severance benefits		80			15
	Net operation loss carryforwards in subsidiaries		3,703			7,085
	Foreign tax credit carryforwards		20,433			19,441
	Tax credit carryforwards for research and human resource development		2,763			3,027
	Tax credit carryforwards for social insurance for employment increase		—			78
	Others		133			106
	Total deferred tax assets		31,227			33,103
	Less valuation allowance		(19,712	)		(24,352	)
		W	11,515		W	8,751
	Deferred tax liabilities
	Accrued income	W	76		W	80
	Depreciation and amortization		—			—
	Investments in subsidiaries and equity method investees		347			65
	Intangible assets		—			—
	Unrealized foreign exchange gains		—			—
	Others		—			—
	Total deferred tax liabilities		423			145
	Net deferred tax assets (liabilities)	W	11,092		W	8,606
	Reported as
	Current portion of deferred income tax assets	W	2,761		W	1,433
	Non-current deferred income tax assets	W	8,331		W	7,173
	Non-current deferred income tax liabilities	W	—		W	—
	Deferred income tax assets are recognized only to the extent that realization of the related tax benefit is more likely than not. Realization of the future tax benefits related to the deferred income tax assets is dependent on many factors, including the Company's ability to generate taxable income within the period during which the temporary differences reverse, the outlook for the economic environment in which the Company operates, and the overall future industry outlook.
	In assessing the realizability of deferred income tax assets, management considered whether it was more likely than not that some portion or all of the deferred income tax assets would not be realized. In particular, a significant portion of the tax credit carryforwards is expected to expire if the Company does not generate sufficient taxable income in Korea as expected. The ultimate realization of deferred income tax asset is dependent upon the generation of future taxable income during the periods in which those temporary differences became deductible. Management considered the scheduled reversal of deferred tax liabilities, uncertainty in the future taxable income, the tax structure of the Company and tax planning strategies in making this assessment. In 2012 and 2013, based on the level of historical taxable income and the future taxable income under the Company's business plan over the periods in which the deferred tax assets were deductible, management believed it was more likely than not that W7,214 million and W2,642 million or 34% and 13% of the deferred tax assets from tax credit carry forwards is realizable for Gravity. For net operating loss carry forwards in 2013, management believed it was more likely than not W1,980 million or 100% of the deferred tax assets is realizable for Gravity.
	As of December 31, 2013, Gravity Co., Ltd. in Korea recorded deferred tax assets from temporary differences of W2,596 million, foreign tax credit carryforwards and tax credit carryforwards for research and human resource development etc. of W18,107 million and W1,683 million, respectively, which expire from 2014 to 2018. Based on the Company's historical and projected net and taxable income, the Company determined that it would be able to realize W1,488 million or 57% of the temporary differences and W2,642 million or 13% of tax credits carryforwards, and recognized a valuation allowance of W17,148 million on the amount of available tax credit carryforwards at an effective rate expected to be incurred to Gravity in Korea. Gravity as a controlling company did not recognize the deferred tax assets from outside basis difference amounting to W5,118 million on investment in subsidiaries since Gravity has no plan or intention to dispose those entities in the foreseeable future. The deferred tax liabilities from outside basis difference amounting to W221 million on investment in subsidiary were also not recognized since Gravity is able to control the timing of the reversal and it is probable that the difference will not reverse in the foreseeable future.
	As of December 31, 2013, Gravity Entertainment Corporation, the Company's 100% owned subsidiary in Japan, recorded deferred tax assets from temporary differences of W103 million and available loss carryforwards of W28 million which expire from 2014 to 2020. Based on this subsidiary's historical and projected net and taxable income, the Company determined that it would not be able to realize these temporary differences and loss carryforwards, and recognized a valuation allowance of W131 million on the full amount of the temporary differences and available loss carryforwards at an effective rate expected to be incurred in Japan.
	As of December 31, 2013, Gravity Interactive, Inc., the Company's 100% owned subsidiary in the United States of America, recorded deferred tax assets from available loss carryforwards of W2,063 million for federal tax and W534 million for state tax, respectively, which expire from 2029 to 2033. Based on this subsidiary's historical and projected net and taxable income, the Company determined that it would not be able to realize these loss carryforwards, and recognized a valuation allowance of W2,597 million on the full amount of the available loss carryforwards at an effective rate expected to be incurred in U.S.
	As of December 31, 2013, Gravity Games Corporation, the Company's 85.50% owned subsidiary in Korea, recorded deferred tax assets from temporary differences of W584 million and available loss carryforwards of W2,095 million. Also, the subsidiary recorded deferred tax assets from foreign tax credit carryforwards and tax credit carryforwards for research and human resource development etc. of W515 million and W174 million, respectively, which expire from 2014 to 2018. Based on this subsidiary's historical and projected net and taxable income, the Company determined that it would not be able to realize these temporary differences, available loss carryforwards and tax credits carryforwards, and recognized a valuation allowance of W3,368 million on the full amount of the temporary differences, available loss carryforwards and tax credits carryforwards at an effective rate expected to be incurred in Korea.
	The Korean statutory tax rate applicable to the Company is 24.2% for the year ended December 31, 2011, while the Korean statutory tax rate applicable to the Company for the years ended December 31, 2012 and 2013 are 22%. In accordance with the revised Korean Corporate Income Tax Law, the statutory tax rate applicable to the Company is 24.2% until 2011 and 22% thereafter. Deferred taxes are measured using the enacted tax rate expected to apply at the time of reversal, which is 22% for the Company.
	A reconciliation of income tax expense (benefit) from the Korean statutory income tax rate to actual income tax expense (benefit) is as follows:
		2011			2012			2013
		(In millions of Korean Won)
	Tax expense (benefit) at Korean statutory tax rate (2011: 24.2%, 2012, 2013: 22%)	W	1,219		W	(3,877	)	W	(3,217	)
	Income tax exemption		(5	)		—			—
	Foreign tax credit		(393	)		(387	)		14
	Tax credit carryforwards for research and human resource development		(356	)		(997	)		(1,104	)
Tax credit carryforwards for social insurance for employment increase		—			—			(78	)
Foreign tax differential		39			(350	)		(156	)
Expense not deductible for tax purpose		672			923			38
Change in valuation allowances		(14,112	)		5,181			4,640
Tax effect from consolidation of subsidiaries		—			(2,424	)		(462	)
Loss of control in subsidiaries		1,364			258			—
Effect of change in foreign currency exchange rate		(52	)		266			79
Expiration of unused foreign tax credit and unused net operating loss carryforwards		3,635			4,054			5,332
Others		27			(63	)		22
Total income tax expense (benefit)	W	(7,962	)	W	2,584		W	5,108
The Company assessed uncertain tax positions and measured unrecognized tax benefits for open tax years in accordance with ASC 740, Income Taxes. The Company's policy is that it recognizes interest expenses and penalties related to income tax matters as a component of income tax expense. Accordingly, the Company assesses its income tax positions and records tax benefits for all years subject to examinations based upon the evaluation of the facts, circumstances and information available at that reporting date. For those tax positions for which it is more likely than not that a tax benefit will be sustained, the Company records the amount that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. If the Company does not believe that it is more likely than not that a tax benefit will be sustained, no tax benefit is recognized.
Based on the approach above, the Company assessed the uncertain tax positions and did not record any unrecognized tax benefits as the Company believes that it is more likely than not that there will not be any unrecognized tax benefits.
In 2011, Gravity was subject to a tax examination by the National Tax Service of Korea for fiscal years 2006 through 2009. As a result of the tax examination, the Company recognized W133 million of income tax expense for penalties and W608 million of withholding taxes for transfer pricing adjustments that arose from the difference between the actual transaction price and the estimated arm's length price. The W133 million of penalties was recorded as a component of the income tax provision, and the W608 million of withholding taxes due was recorded as a component of selling, general and administrative expenses for the year ended December 31, 2010. The National Tax Service of Korea is a Korean government agency responsible for tax collection and tax law enforcement.
Allowances for deferred income tax assets for the three years ended December 31, 2011, 2012 and 2013 are as follows:
	Balance at			Decrease			Increase			Balance at
	Beginning									End of Year
	of Year
	(In millions of Korean Won)
2011
Valuation allowance	W	28,643		W	14,112		W	—		W	14,531
2012
Valuation allowance		14,531			—			5,181			19,712
2013
Valuation allowance		19,712						4,640			24,352

Operations_by_Geographic_Area

Operations by Geographic Area	12 Months Ended
	Dec. 31, 2013
Operations by Geographic Area	'
Operations by Geographic Area	'
	15. Operations by Geographic Area
	Geographic information for the years ended December 31, 2011, 2012 and 2013 is based on the location of the distribution entity. Revenues by geographic region are as follows:
		2011		2012		2013
		(In millions of Korean Won)
	Korea	W	10,458	W	14,762	W	15,491
	Japan		29,513		30,387		14,409
	Taiwan and Hong Kong		3,590		2,244		3,106
	United States of America		5,879		5,023		7,725
	Russia		487		476		180
	Brazil		1,189		837		705
	Thailand		1,245		974		1,015
	Europe		2,058		982		643
	China		749		495		2,734
	Other		2,309		1,601		1,677
		W	57,477	W	57,781	W	47,685
	Approximately 82% and 18% of the Company's property and equipment are located in Korea and the United States of America, respectively as of December 31, 2013.

Related_Party_Transactions

Related Party Transactions	12 Months Ended
	Dec. 31, 2013
Related Party Transactions	'
Related Party Transactions	'
	16. Related Party Transactions
	During the years ended December 31, 2011, 2012 and 2013, there were related party transactions with a shareholder and an equity investee as follows:
		2011		2012		2013
		(In millions of Korean Won)
	Sales to related parties	W	29,110	W	30,061	W	18,562
	Purchases from related parties		2,139		3,312		1,212
	Amounts due from related parties		3,573		2,657		1,773
	Amounts due to related parties		6,373		6,699		5,756
	On April 1, 2008, GungHo Online Entertainment, Inc. became a majority shareholder by acquiring 52.39% of the voting shares from Heartis Inc., the former majority shareholder, and acquired additional 6.92% voting shares on June 23 and June 24, 2008. The transactions with GungHo and the related balances during 2011, 2012 and 2013 were included in related party transactions above.
	Due to the disposal of equity investments in Ingamba LLC, in May 2012, the related party relationship between the Company and Ingamba LLC, was discontinued. Therefore, the transactions with Ingamba LLC that occurred before the disposal of the equity investments were included in the related party transactions. Sales to Ingamba LLC were W275 million and W138 million in 2011 and 2012, respectively. Amounts due from Ingamba LLC were W47 million in 2011.

Supplemental_Cash_Flow_Informa

Supplemental Cash Flow Information and Non-Cash Activities	12 Months Ended
	Dec. 31, 2013
Supplemental Cash Flow Information and Non-Cash Activities	'
Supplemental Cash Flow Information and Non-Cash Activities	'
	17. Supplemental Cash Flow Information and Non-Cash Activities
		2011		2012		2013
		(In millions of Korean Won)
	Supplemental cash flow information
	Cash paid during the year for income taxes	W	3,832	W	3,727	W	2,373
	Interest paid		58		55		24
	Supplemental non-cash activities
	Reclassification of long-term deferred revenue to deferred revenue	W	3,978	W	1,562	W	1,922
	Reclassification of prepayment to intangible assets		1,392		312		1,361

Subsequent_events

Subsequent events	12 Months Ended
	Dec. 31, 2013
Subsequent events	'
Subsequent events	'
	18. Subsequent events
	On January 1, 2014, amended local income tax law was enacted. This amendment will have an impact on the current income tax and deferred income tax assets relating to tax credit carry forwards in 2014 and thereafter.

Significant_Accounting_Policie1

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Significant Accounting Policies

'

Basis of presentation

'

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.

Principles of consolidation

'

Principles of consolidation

The accompanying consolidated financial statements include the accounts of Gravity and the following subsidiaries (collectively referred to as the "Company"). All intercompany balances and transactions have been eliminated in the consolidation.

Subsidiary

Year of

Year of

Percentage of

Establishment

Obtaining

Ownership (%)

Control

Gravity Interactive, Inc.

2003

2003

100

Gravity Entertainment Corporation

2003

2004

100

NeoCyon, Inc.

2000

2005

96.11

Gravity Middle East & Africa FZ-LLC(*1)

2007

2007

100

Gravity Games Corporation(*2)

2003

2010

85.5

(*1)

In May 2007, the Company founded Gravity Middle East & Africa FZ-LLC, a wholly owned United Arab Emirates-based subsidiary. Gravity Middle East & Africa FZ-LLC has been in the process of liquidation since September 2008 and the liquidation process is not completed as of December 31, 2013.

(*2)

In October 2010, the Company acquired 50.83% ownership of Barunson Interactive Corporation. Based on the shareholders' meeting held on March 28, 2011, Barunson Interactive Corporation changed its name to Gravity Games Corporation. In August 2013, the Company additionally acquired 34.67% of the share capital of Gravity Games Corporation through additional capital increase. As a result of increase in ownership interest, additional paid-in capital was decreased by W319 million and non-controlling interest in subsidiaries increased by the same amount.

The list of subsidiaries that were excluded from consolidation during the year ended December 31, 2012 is as follows:

Subsidiary

Reason

Gravity CIS Co., Ltd.(*)

Surrendered rights for shares of its investment

Gravity RUS Co., Ltd.(*)

(*)

In August 2012, the Company surrendered rights for shares (ownership interest of 99.99% (Gravity RUS Co., Ltd.) and 100% (Gravity CIS Co., Ltd.)) of its investments in accordance with the laws of Russia.

Investments in entities where the Company holds more than 20% but less than 50% ownership or over which the Company has significant management influence are accounted for using the equity method of accounting and the Company's share of the investee's operations is included in Equity method investments. The Company follows the equity method of accounting for investments in its joint ventures Animation Production Committee, Gravity EU SAS and Ingamba LLC (Note 6).

Investments in limited partnerships are accounted for using the equity method in accordance with Accounting Standard Codification ("ASC") 323, Investment—Equity Method and Joint Ventures, which requires the use of the equity method unless the investor's interest "is so minor that the limited partner may have virtually no influence over partnership operating and financial policies." The Company follows the equity method of accounting for its investment in Online Game Revolution Fund No. 1 (Note 6).

The Company recorded its initial investments at cost and records its pro rata share of the earnings or losses in the results of operations of the equity method investees.

Use of estimates

'

Use of estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include useful lives of fixed assets, salvage values and recovery of property and equipment; recoverability of goodwill and intangible assets; valuation allowances for receivables, realization of deferred income tax assets, and estimated life-cycle of the permanent in-game items. Actual results could differ materially from the estimates and assumptions used.

Risks and uncertainties

'

Risks and uncertainties

Industry and revenue

The industry in which the Company operates is subject to a number of industry-specific risks, including, but not limited to, rapidly changing technologies; significant numbers of new competitive entrants; dependence on key individuals; competition from similar products from larger companies; change in customer preferences; the need for the continued successful development, marketing, and selling of its products and services; and the need for positive cash flows from operations. The Company depends on one key product, "Ragnarok Online," for most of its revenues.

During the years ended December 31, 2011, 2012 and 2013, the Company generated 83%, 87% and 81% of its revenues from countries in Asia, respectively.

As of December 31, 2011, 2012, and 2013, GungHo Online Entertainment, Inc. is the only licensee whose related accounts receivable and total revenue exceeds 10% of the Company's total accounts receivable and total revenue, and the proportions are as follows (Note 16):

2011

2012

2013

Country

Licensee

Accounts

Revenues

Accounts

Revenues

Accounts

Revenues

Receivable

Receivable

Receivable

Japan

GungHo Online Entertainment, Inc.

45

%

50

%

34

%

51

%

30

%

38

%

The amounts included within the accounts receivable balance as of December 31, 2013 are W1,648 million from GungHo Online Entertainment, Inc. There are no other balances with any parties that represent greater than 10% of the total accounts receivable balance.

Concentrations of credit risk

Cash and cash equivalents and short-term financial instruments are potentially subject to concentration of credit risk. Cash and cash equivalents and short-term financial instruments are placed with several financial institutions, of which approximately 33% of such amounts are held at one financial institution.

Revenue recognition

'

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the product or the service has been delivered or rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured.

The Company derives most of its revenues from online game subscription revenue mainly from Ragnarok Online paid by users in Korea, the United States and Canada, and royalties and license fees paid by the licensees of the Company in overseas markets.

Online games—subscription revenue

Players can access certain games free of charge, but may purchase game points to acquire in-game premium features. Subscription revenue consists of revenues from (i) micro-transactions, (ii) subscription fees from Internet cafés and (iii) premium services for individual PC users. Micro-transaction fees for consumable in-game items are deferred when such in-game items are purchased by users and recognized as revenue when the purchased in-game items are used in the games while those for permanent in-game items are recognized ratably as revenues over the estimated life cycle of such in-game items. Micro-transaction fees for in-game items with limited time period are deferred and recognized as revenue in proportion to the number of days lapsed. All online game subscription fees and premium service fees are prepaid. Prepaid subscription fees from Internet cafés are deferred and recognized as revenue on a monthly basis based on actual hours used. Prepaid premium service fees from individual PC users are deferred and recognized as revenue on a monthly basis in proportion to the number of days lapsed.

For the sales of consumable in-game items, the Company recognizes revenues as the items are consumed. For the sales of permanent in-game items, the Company recognizes revenues by reflecting the estimated life-cycle of the permanent in-game items.

Online games—royalties and license fees

The Company licenses the right to sell and distribute its games in exchange for an initial prepaid license fee and guaranteed minimum royalty payments. The prepaid license fee revenues are recorded as deferred revenue and recognized ratably over the license period. If license agreements are renewed upon expiration of their terms, renewed license fees are deferred and recognized ratably over the new license period.

The Company generally provides its licensees with minimal post-contract customer support on its software products, consisting of technical supports and occasional unspecified upgrades, or enhancements during the contract term. The estimated costs of providing such support are insignificant and sufficient vendor-specific evidence does not exist to allocate the revenue from software and related integration projects to the separate elements of such projects, therefore all license revenue is recognized ratably over the life of the contract.

The guaranteed minimum royalty payments are recorded as deferred revenue and recognized as the royalties are earned. In addition, the Company receives a royalty payment based on a specified percentage of the licensees' sales, including game item revenues. These royalties that exceed the guaranteed minimum royalty are recognized on a monthly basis, as the related revenues are earned by the licensees.

Mobile games and applications revenue

Mobile games and applications revenue consists of (i) revenues from micro-transactions and a proportion of the per-download fees that users pay in cases where the Company directly provides mobile games services to users, such as in Korea; (ii) license fees and/or guaranteed minimum royalty payments, and royalty revenues from the Company's licensees to which it licenses the right to market and distribute its mobile games in overseas countries; (iii) contract prices, which are related to various development services and products provided by the Company to third parties, such as developing games embedded in mobile phones, mobile applications, and sound for mobile phones and appliances; (iv) revenues from mobile games operation service for third parties; and (v) intellectual property royalty revenues from third parties that develop and provide services for mobile games based on the Company's original intellectual property.

Micro-transaction fees are deferred when in-game items are purchased by users and recognized as revenue when the purchased in-game items are used in the game. Per-download fees are recognized on a monthly basis as they are earned. License fees are deferred and recognized ratably as revenue over the license period and guaranteed minimum royalty payments are deferred and recognized as the relevant royalty is earned. Royalty revenues are based on an agreed percentage of each of the licensees' revenues based on the licensees' sales from mobile games. Contract prices are recognized when the products or services have been delivered or rendered and the customers can begin use in accordance with the contractual terms. Revenues from mobile games operation service are based on an agreed percentage of each of the licensors' revenues based on the licensor's sales from the mobile games the Company operates on their behalf and recognized on a monthly basis after the licensor confirms its revenues based on the licensor's sales from the relevant mobile games during the month. Intellectual property royalty revenues are recognized on a monthly basis.

Mobile application development service revenues are recognized by measuring progress-to-completion under the percentage-of-completion method. If the Company does not have a sufficient basis to measure progress towards completion, revenues are recognized when it receives final acceptance from the customer that the services have been completed.

Character merchandising, animation and other revenue

Character merchandising, animation and other revenue consist of revenues from sales of console games, game character merchandising, animation and other services, including sales of goods related to mobile phones and Web site development and operation services for third parties.

Revenues from sales of console games are derived from a specified percentage of the publisher's sales after deductibles, including payments to the platform holder and others, and recognized on a quarterly basis as they are earned by the publisher. Royalty payments from game character merchandising are recognized on a quarterly basis as they are earned by the licensee. Contract prices for the Company's services provided to third parties are recognized when the products or services have been delivered or rendered and the customers can begin their use in accordance with the contractual terms.

The Company also sells goods related to mobile phones, such as accessories and USB data cable or provides contracted services, which is recorded in other revenue. The Company records these sales of goods when delivery has occurred and collectability of the fixed or determinable sales price is reasonably assured.

Reclassification

The Company reclassified certain revenue within Mobile games and applications revenue as Character merchandising, animation and other revenue in 2013 as this better represents the nature of the revenue. The same reclassification has been made to all prior periods to conform to the presentation of 2013. The reclassification has no effect on the Company's previously reported total net revenue and other line items on the consolidated financial statements.

Out-of-Period Adjustments

The accompanying 2013 consolidated statement of operations includes certain out-of-period adjustments primarily related to the understatement of revenues for in-game items of Won 981 million that were not properly deferred in fiscal year 2012. Management believes the impact of these items, both individually and in the aggregate, to the year ended December 31, 2013 and to prior years presented are not material.

Cash and cash equivalents

'

Cash and cash equivalents

Cash equivalents consist of time deposits with a maturity of three months or less at the time of purchase.

Short-term financial instruments

'

Short-term financial instruments

Short-term financial instruments primarily include time deposits placed with financial institutions which have an original maturity greater than three months but less than one year.

Allowance for doubtful accounts

'

Allowance for doubtful accounts

The Company maintains allowances for doubtful accounts receivable based upon the following information: an aging analysis of its accounts receivable balances, historical bad debt rates, repayment patterns, creditworthiness of its customers, and industry trend analysis.

The payment processing service providers are responsible for remitting to the Company the full subscription revenues generated in Korea after deducting their fixed service fees and charges, which range from approximately 1.4% to 15% and risk of loss or delinquencies are borne by such payment processing service providers.

Property and equipment

'

Property and equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation for property and equipment is computed using the straight-line method over the following estimated useful lives:

Computer and equipment

4 years

Furniture and fixtures

4 years

Software

3 years

Vehicles

4 years

Leasehold improvements are depreciated on a straight-line basis over the estimated useful life of the assets or the lease term, whichever is shorter.

Routine maintenance and repairs are charged to expense as incurred. Expenditures which enhance the value or extend the useful lives of the related assets are capitalized.

Depreciation for property and equipment is allocated to cost of revenue, selling, general and administrative expenses or research and development expenses.

Accounting for the impairment of long-lived assets

'

Accounting for the impairment of long-lived assets

Definite-lived tangible and intangible assets are amortized over their estimated useful life according to the nature and characteristics of each asset. The Company continually evaluates the reasonableness of the useful lives of these assets.

The Company reviews property and equipment and other long-lived assets for impairment whenever events or changes in circumstances indicate that carrying value may not be recoverable in accordance with ASC 360, Property, Plant, and Equipment. When the aggregate of future cash flows (undiscounted and without interest charges) is less than the carrying value of the asset, an impairment loss is recognized based on the fair value of the asset.

Intangible assets

'

Intangible assets

Capitalized software development costs—online game development costs

The Company capitalizes certain software development costs relating to online games that will be distributed through subscriptions or licenses. The Company accounts for software development costs in accordance with ASC 985, Costs of Software to be Sold, Leased, or Marketed. Software development costs incurred prior to the establishment of technological feasibility are expensed when incurred and are included in research and development expense. Once a software product has reached technological feasibility, then all subsequent software development costs for that product are capitalized until the product is commercially launched. Technological feasibility is evaluated on a product-by-product basis, but typically occurs when the online game has a proven ability to operate on a multiplayer level for a large number of users. Technological feasibility of a product encompasses both technical design documentation and game design documentation.

The Company amortizes capitalized software development costs relating to games and records such costs as a component of cost of revenues. Amortization is determined as the greater of the amount computed using the ratio of current gross revenues for a game to the total of current and anticipated future gross revenues for that game or the straight-line method amount over the remaining estimated economic life of the game. Amortization starts when a game is available for general release to public users. The Company continually evaluates the reasonableness of the economic life of the capitalized software development costs based on the average life cycle of the games whenever each new game is commercially launched or acquired.

Capitalized software development costs for games, net of accumulated amortization, at December 31, 2012 and 2013 were W17,170 million and W12,542 million, respectively. Amortization expense for the years ended December 31, 2011, 2012 and 2013 was W25 million, W3,852 million and W4,613 million, respectively.

The Company evaluates the recoverability of capitalized software development costs on a product-by-product basis. The recoverability of capitalized software development costs is evaluated based on the expected performance of the specific products to which the costs relate. Criteria used to evaluate expected product performance include: historical performance of comparable products using comparable technology; orders for the product prior to its release; and estimated performance of a sequel product based on the performance of the product on which the sequel is based. Capitalized costs for those products that are cancelled are expensed in the period of cancellation. In addition, an impairment loss shall be recorded when management's forecast for a particular game indicates that unamortized capitalized costs exceed the net realizable value of that asset. Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established, as well as in the ongoing assessment of the recoverability of capitalized costs. In evaluating the recoverability of capitalized costs, the assessment of expected product performance utilizes forecasted sales amounts and estimates of additional development costs to be incurred. If revised forecasted or actual product sales are changed from the original forecasted amounts utilized in the initial recoverability analysis, the actual impairment charge may be larger than originally estimated in any given period.

Impairment losses on capitalized software development cost for games for the year ended December 31, 2013 were W534 million.

Capitalized software development costs—website and internal use software development costs

The Company accounts for website and internal use software development cost in accordance with ASC 340, Internal Use Software. For website and internally used software development costs, the Company expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance of the existing websites and software. Costs incurred in the development phase are capitalized and amortized over the estimated product life.

Capitalized software development costs for website and internal use software at December 31, 2012 and 2013 were W217 million and W90 million, respectively.

Impairment losses on capitalized software development cost for website and internal use software for the year ended December 31, 2013 were W245 million.

Research and development costs

Research and development expenses consist primarily of payroll and other overhead expenses which are all expensed as incurred (i) until technological feasibility of an online game is reached or (ii) until commercial operation of a mobile game commences. Once technological feasibility of an online game is reached, these costs are capitalized and, once commercial operation commences, amortized as cost of revenues.

Goodwill

Goodwill is accounted for under ASC 350, Intangibles—Goodwill and Other, which requires that goodwill and indefinite-lived intangible assets are not amortized, but instead be tested at least annually for impairment, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of these assets below their carrying amount. Such an event would include unfavorable variances from established business plans, significant changes in forecasted results or volatility inherent to external markets and industries, which are periodically reviewed by the Company's management.

Specifically, qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the relevant events and circumstances are assessed. If, after assessing the totality of events or circumstances, it is determined that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step process of the goodwill impairment test is not performed. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first step of the two-step goodwill impairment test is performed. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized immediately in an amount equal to that excess. The goodwill impairment test is carried out at the reporting unit, which is either an operating division or a subdivision, for which stand-alone financial information is available to the management personnel of such division or subdivision for evaluating operating results.

Acquired in-process research and development ("IPR&D") technology

Acquired IPR&D assets are considered indefinite-lived intangible assets and are not subject to amortization. An IPR&D asset must be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the IPR&D asset with its carrying amount. If the carrying amount of the IPR&D asset exceeds its fair value, an impairment loss must be recognized in an amount equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the IPR&D asset will be its new accounting basis. Subsequent reversal of a previously recognized impairment loss is prohibited. The initial determination and subsequent evaluation for impairment of the IPR&D asset requires management to make significant judgments and estimates. Once an IPR&D project has been completed, the useful life of the IPR&D asset is determined and amortized accordingly. If an IPR&D project has been abandoned, it is immediately expensed.

Advertising

'

Advertising

The Company expenses advertising costs as incurred. Advertising expense was W3,121 million, W4,585 million and W2,852 million for the years ended December 31, 2011, 2012 and 2013, respectively.

Accrued severance benefits and pension plan

'

Accrued severance benefits and pension plan

Employees and directors with one year or more of service are entitled to receive a lump-sum payment upon termination of their employment with the Company based on the length of service and rate of pay at the time of termination. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date in compliance with relevant laws in Korea. The annual severance benefits expense charged to operations is calculated based upon the net change in the accrued severance benefits payable at the balance sheet date based on the guidance of ASC 715, Compensation—Retirement Benefits.

Gravity and NeoCyon introduced a defined contribution pension plan in 2005 and 2011, respectively, and provide an individual account for each participant. A plan's defined contributions to an individual's account are to be made for periods in which that individual renders services, the net pension cost for a period shall be the contribution called for in that period.

Foreign currency translation

'

Foreign currency translation

The Korean parent company and its subsidiaries use their local currencies as their functional currencies. The financial statements of the subsidiaries in functional currencies other than the Korean Won are translated into the Korean Won in accordance with ASC 830, Foreign Currency Matters. All assets and liabilities of the foreign subsidiaries are translated into the Korean Won at the exchange rate in effect at the end of the period, and capital accounts are determined to be of a permanent nature and are therefore translated using historical exchange rates. Revenues and expenses are translated at average exchange rates during the period. The effects of foreign currency translation adjustments are reflected in the cumulative translation adjustment account, reported as a separate component of comprehensive income in shareholders' equity.

Foreign currency transactions

Net gains and losses resulting from foreign exchange transactions are included in foreign currency income (losses) in the consolidated statements of comprehensive income (loss).

Income taxes

'

Income taxes

The Company accounts for income taxes under the provisions of ASC 740, Income Taxes. Under ASC 740, income taxes are accounted for under the asset and liability method. Deferred income taxes are determined based upon differences between the financial reporting and tax bases of assets and liabilities at currently enacted statutory tax rates for the years in which the differences are expected to reverse.

A valuation allowance is provided on deferred income tax assets to the extent that it is more likely than not that such deferred income tax assets will not be realized. The total income tax provision includes current tax expenses under applicable tax regulations and the change in the balance of deferred income tax assets and liabilities.

The Company follows ASC 740, Income Taxes, which prescribes a recognition threshold and measurement attribute for tax positions taken or expected to be taken in a tax return. This standard also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The evaluation of a tax position in accordance with this standard is a two-step process. In the first step, recognition, the Company determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step addresses measurement of a tax position that meets the more-likely-than-not criteria. The tax position is measured at the largest amount of benefit that has a likelihood of greater than 50 percent of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in (a) an increase in a liability for income taxes payable or a reduction of an income tax refund receivable, (b) a reduction in a deferred income tax asset or an increase in a deferred income tax liability or (c) both (a) and (b).

Fair Value Measurements

'

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset and liability. As a basis for considering such assumptions, a fair value hierarchy has been established that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows:

•

Level 1—Quoted prices in active exchange markets involving identical assets or liabilities.

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Inputs that are generally unobservable and typically reflect management estimates of assumptions and inputs using a binomial lattice model as the valuation technique.

Fair Value of Financial Instruments

'

Fair Value of Financial Instruments

ASC Topic 825, Financial Instruments, requires disclosure of the fair value of financial instruments for which the determination of fair value is practicable. The fair values of the Company's cash and cash equivalents, short-term financial instruments, accounts receivable and other current assets, accounts payable and other current liabilities approximate carrying values due to the short maturity of these instruments.

Earnings (losses) per share

'

Earnings (losses) per share

Basic earnings (losses) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for all periods. Diluted earnings (losses) per share is computed by dividing net earnings (losses) by the weighted average number of common shares outstanding, increased by common stock equivalents. Common stock equivalents are calculated using the treasury stock method and represent incremental shares issuable upon exercise of the Company's outstanding stock options. However, potential common shares are not included in the denominator of the diluted earnings (losses) per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.

Reclassification

'

Reclassification

Certain reclassifications have been made to the 2011 and 2012 consolidated financial statements to conform to the 2013 presentation.

Recent accounting pronouncements

'

Recent accounting pronouncements

In December 2011 and January 2013, the Financial Accounting Standards Board ("FASB") issued FASB Accounting Standards Update ("ASU") 2011-11, Disclosures about Offsetting Assets and Liabilities, and ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, respectively, which create new disclosure requirements about the nature of an entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The new disclosures are designed to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards ("IFRS"). The adoptions of ASU 2011-11 and 2013-01 did not have a material impact on the Company's consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, as an update to the authoritative guidance related to testing indefinite-lived intangible assets for impairment. This update gives an entity the option to first consider certain qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. This update is effective for the indefinite-lived intangible asset impairment test performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The Company has early adopted this ASU and the adoption had no material impact on the Company's consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to require new disclosures about reclassifications from accumulated other comprehensive income to net income. These disclosures may be presented on the face of the statements or in the notes to the consolidated financial statements. The standards update is effective for fiscal years beginning after December 15, 2012 with early adoption permitted. The Company adopted the provisions of ASU 2013-02 in the year ended December 31, 2013, and has presented its requirements in the consolidated statements of comprehensive income (loss).

In March 2013, the FASB issued ASU 2013-05, Foreign Currency Matters, to clarify the accounting for the release of a cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.

In July 2013, the FASB issued ASU 2013-11, Income Taxes, which requires the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the Consolidated Balance Sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The new standard requires adoption on a prospective basis in the first quarter of 2015; however, early adoption is permitted. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.

Significant_Accounting_Policie2

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Significant Accounting Policies

'

Subsidiaries

'

Subsidiary

Year of

Year of

Percentage of

Establishment

Obtaining

Ownership (%)

Control

Gravity Interactive, Inc.

2003

2003

100

Gravity Entertainment Corporation

2003

2004

100

NeoCyon, Inc.

2000

2005

96.11

Gravity Middle East & Africa FZ-LLC(*1)

2007

2007

100

Gravity Games Corporation(*2)

2003

2010

85.5

(*1)

In May 2007, the Company founded Gravity Middle East & Africa FZ-LLC, a wholly owned United Arab Emirates-based subsidiary. Gravity Middle East & Africa FZ-LLC has been in the process of liquidation since September 2008 and the liquidation process is not completed as of December 31, 2013.

(*2)

In October 2010, the Company acquired 50.83% ownership of Barunson Interactive Corporation. Based on the shareholders' meeting held on March 28, 2011, Barunson Interactive Corporation changed its name to Gravity Games Corporation. In August 2013, the Company additionally acquired 34.67% of the share capital of Gravity Games Corporation through additional capital increase. As a result of increase in ownership interest, additional paid-in capital was decreased by W319 million and non-controlling interest in subsidiaries increased by the same amount.

Subsidiaries Excluded from Consolidation

'

The list of subsidiaries that were excluded from consolidation during the year ended December 31, 2012 is as follows:

Subsidiary

Reason

Gravity CIS Co., Ltd.(*)

Surrendered rights for shares of its investment

Gravity RUS Co., Ltd.(*)

(*)

In August 2012, the Company surrendered rights for shares (ownership interest of 99.99% (Gravity RUS Co., Ltd.) and 100% (Gravity CIS Co., Ltd.)) of its investments in accordance with the laws of Russia.

Accounts Receivable and Total Revenue Risks and Uncertainties

'

2011

2012

2013

Country

Licensee

Accounts

Revenues

Accounts

Revenues

Accounts

Revenues

Receivable

Receivable

Receivable

Japan

GungHo Online Entertainment, Inc.

45

%

50

%

34

%

51

%

30

%

38

%

Property and Equipment Estimated Useful Lives

'

Computer and equipment

4 years

Furniture and fixtures

4 years

Software

3 years

Vehicles

4 years

Allowance_for_doubtful_account1

Allowance for doubtful accounts (Tables)	12 Months Ended
	Dec. 31, 2013
Accounts receivable	'
Allowance for doubtful accounts	'
Changes in Allowance for Accounts Receivable	'
		2011			2012			2013
		(In millions of Korean Won)
	Balance at beginning of year	W	5		W	8		W	9
	Provision for allowances		21			6			23
	Reversal of previous provision		—			—			—
	Write-offs		(18	)		(5	)		—
	Balance at end of year	W	8		W	9		W	32
Loan Receivable	'
Allowance for doubtful accounts	'
Changes in Allowance for Accounts Receivable	'
		2011			2012			2013
		(In millions of Korean Won)
	Balance at beginning of year	W	—		W	1,000		W	1,200
	Provision for allowances		1,000			200			—
	Reversal of previous provision		—			—			—
	Write-offs		—			—			—
	Balance at end of year	W	1,000		W	1,200		W	1,200

Equity_Method_Investment_Table

Equity Method Investment (Tables)	12 Months Ended
	Dec. 31, 2013
Equity Method Investment	'
Equity Method Investment	'
		2012			2013
		(In millions of Korean Won)
	Animation Production Committee	W	—			—
	Online Game Revolution Fund No. 1		647			—
	Gravity EU SAS		—			—
	Ingamba LLC		—			—
	Total equity method investments	W	647		W	—
Equity Income (loss) on investments	'
		2011			2012			2013
		(In millions of Korean Won)
	Animation Production Committee	W	—		W	—		W	—
	Online Game Revolution Fund No. 1		(38	)		(51	)		(18	)
	Gravity EU SAS		(70	)		(257	)		—
	Ingamba LLC		(134	)		(25	)		—
	Total equity income (loss) on investments	W	(242	)	W	(333	)	W	(18	)

Property_and_Equipment_Net_Tab

Property and Equipment, Net (Tables)	12 Months Ended
	Dec. 31, 2013
Property and Equipment, Net	'
Property and Equipment	'
		2012			2013
		(In millions of Korean Won)
	Computer and equipment	W	10,867		W	7,212
	Furniture and fixtures		2,100			2,149
	Vehicles		89			78
	Capital lease assets		1,140			1,287
	Leasehold improvements		771			746
	Software externally-purchased		11,531			11,898
			26,498			23,370
	Less accumulated depreciation		(22,974	)		(21,055	)
		W	3,524		W	2,315

Goodwill_and_other_intangible_1

Goodwill and other intangible assets (Tables)	12 Months Ended
	Dec. 31, 2013
Goodwill and other intangible assets	'
Capitalized Software Development Cost and Other Intangible Assets	'
		At December 31, 2012											At December 31, 2013
		Gross			Accumulated			Accumulated			Net		Gross		Accumulated			Accumulated			Net
		Carrying			Amortization			Impairment			Carrying		Carrying		Amortization			Impairment			Carrying
		Amount									Amount		Amount								Amount
		(In millions of Korean Won)
	Capitalized software development cost	W	29,010		W	(11,623	)	W	—		W	17,387	W	29,558	W	(16,236	)	W	(779	)	W	12,543
	Acquired intangible assets
	Product technology		18,536			(11,565	)		(4,609	)		2,362		18,536		(12,503	)		(6,033	)		—
	IPR&D technology		8,503			—			(8,503	)		—		8,503		—			(8,503	)		—
	Trademarks		520			(350	)		—			170		549		(380	)		(3	)		166
	Others		2,204			(690	)		(1,026	)		488		3,078		(1,089	)		(1,989	)		—
	Total	W	58,773		W	(24,228	)	W	(14,138	)	W	20,407	W	60,224	W	(30,208	)	W	(17,307	)	W	12,709
Changes in Goodwill Balance	'
		2011			2012			2013
		(In millions of Korean Won)
	Balance at beginning of the year
	Goodwill	W	8,232		W	8,232		W	8,232
	Accumulated impairment losses		(241	)		(755	)		(4,369	)
			7,991			7,477			3,863
	Impairment losses		(514	)		(3,614	)		(2,653	)
	Balance at end of the year
	Goodwill		8,232			8,232			8,232
	Accumulated impairment losses		(755	)		(4,369	)		(7,022	)
		W	7,477		W	3,863		W	1,210
Expected Amortization Expense of Intangible Assets	'
		(In millions of Korean Won)
	2014		4,006
	2015		3,964
	2016		3,964
	2017		675
	2018 and thereafter		100
			12,709

Accrued_Severance_Benefits_Tab

Accrued Severance Benefits (Tables)	12 Months Ended
	Dec. 31, 2013
Accrued Severance Benefits.	'
Changes in Accrued Severance Benefits	'
		2011			2012			2013
		(In millions of Korean Won)
	Balance at beginning of year	W	1,031		W	916		W	683
	Provisions for severance benefits		586			96			67
	Severance payments		(648	)		(190	)		(444	)
	Terminated but not yet paid		(53	)		(139	)		(43	)
	Balance at end of year	W	916		W	683		W	263

Commitments_and_Contingencies_

Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2013
Commitments and Contingencies.	'
Future Minimum Lease Payments Under Capital Lease	'
	Future minimum lease payments for the leases as of December 31, 2013, are as follows:
		2014				2015				2016
		Principal		Interest		Principal		Interest		Principal		Interest
		(In thousands of US dollars)
	Capital lease	$	137	$	11	$	107	$	4	$	14		—
			(In millions of Korean Won)
		W	145	W	12	W	113	W	4	W	15		—
Future Minimum Rental Payments Under Operating Lease	'
	Future minimum rental payments for the operating leases as of December 31, 2013, are as follows:
		(In millions of Korean Won)
	2014	W	2,251
	2015		135
	2016		81
	2017		—
		W	2,467

Earnings_losses_Per_Share_Tabl

Earnings (losses) Per Share (Tables)	12 Months Ended
	Dec. 31, 2013
Earnings (losses) Per Share	'
Basic and Diluted Earning Per Share	'
		2011		2012			2013
		(In millions of Korean Won,
		except per share data)
	Net income (loss) available for common shareholders (A)	W	14,928	W	(12,224	)	W	(18,588	)
	Weighted average outstanding shares of common shares (B)		6,948,900		6,948,900			6,948,900
	Earnings (losses) per share Basic and diluted (A/B)	W	2,148	W	(1,759	)	W	(2,675	)

Income_Taxes_Tables

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2013
Income Taxes	'
Income Tax Expenses Benefit	'
		2011			2012			2013
		(In millions of Korean Won)
	Income (loss) before income taxes
	Domestic	W	4,878		W	(16,761	)	W	(13,403	)
	Foreign		159			(862	)		(1,222	)
			5,037			(17,623	)		(14,625	)
	Current income taxes
	Domestic		3,694			3,715			2,634
	Foreign		70			4			—
			3,764			3,719			2,634
	Deferred income taxes (benefit)
	Domestic		(11,726	)		(1,135	)		2,474
	Foreign		—			—			—
			(11,726	)		(1,135	)		2,474
	Total income tax expenses (benefit)	W	(7,962	)	W	2,584		W	5,108
Deferred Income Tax Assets and Deferred Income Tax Liabilities	'
		2012			2013
		(In millions of Korean Won)
	Deferred tax assets
	Accrued expense	W	342		W	294
	Allowance for doubtful		660			1,148
	Investments in subsidiaries and equity method investees		1,345			232
	Depreciation and amortization		1,032			743
	Deferred revenue		736			934
	Provisions for severance benefits		80			15
	Net operation loss carryforwards in subsidiaries		3,703			7,085
	Foreign tax credit carryforwards		20,433			19,441
	Tax credit carryforwards for research and human resource development		2,763			3,027
	Tax credit carryforwards for social insurance for employment increase		—			78
	Others		133			106
	Total deferred tax assets		31,227			33,103
	Less valuation allowance		(19,712	)		(24,352	)
		W	11,515		W	8,751
	Deferred tax liabilities
	Accrued income	W	76		W	80
	Depreciation and amortization		—			—
	Investments in subsidiaries and equity method investees		347			65
	Intangible assets		—			—
	Unrealized foreign exchange gains		—			—
	Others		—			—
	Total deferred tax liabilities		423			145
	Net deferred tax assets (liabilities)	W	11,092		W	8,606
	Reported as
	Current portion of deferred income tax assets	W	2,761		W	1,433
	Non-current deferred income tax assets	W	8,331		W	7,173
	Non-current deferred income tax liabilities	W	—		W	—
Reconciliation of Income Tax Expense (Benefit)	'
		2011			2012			2013
		(In millions of Korean Won)
	Tax expense (benefit) at Korean statutory tax rate (2011: 24.2%, 2012, 2013: 22%)	W	1,219		W	(3,877	)	W	(3,217	)
	Income tax exemption		(5	)		—			—
	Foreign tax credit		(393	)		(387	)		14
	Tax credit carryforwards for research and human resource development		(356	)		(997	)		(1,104	)
	Tax credit carryforwards for social insurance for employment increase		—			—			(78	)
	Foreign tax differential		39			(350	)		(156	)
	Expense not deductible for tax purpose		672			923			38
	Change in valuation allowances		(14,112	)		5,181			4,640
	Tax effect from consolidation of subsidiaries		—			(2,424	)		(462	)
	Loss of control in subsidiaries		1,364			258			—
	Effect of change in foreign currency exchange rate		(52	)		266			79
	Expiration of unused foreign tax credit and unused net operating loss carryforwards		3,635			4,054			5,332
	Others		27			(63	)		22
	Total income tax expense (benefit)	W	(7,962	)	W	2,584		W	5,108
Allowances for Deferred Income Tax Assets	'
		Balance at			Decrease			Increase			Balance at
		Beginning									End of Year
		of Year
		(In millions of Korean Won)
	2011
	Valuation allowance	W	28,643		W	14,112		W	—		W	14,531
	2012
	Valuation allowance		14,531			—			5,181			19,712
	2013
	Valuation allowance		19,712						4,640			24,352

Operations_by_Geographic_Area_

Operations by Geographic Area (Tables)	12 Months Ended
	Dec. 31, 2013
Operations by Geographic Area	'
Revenues by Geographic Region	'
		2011		2012		2013
		(In millions of Korean Won)
	Korea	W	10,458	W	14,762	W	15,491
	Japan		29,513		30,387		14,409
	Taiwan and Hong Kong		3,590		2,244		3,106
	United States of America		5,879		5,023		7,725
	Russia		487		476		180
	Brazil		1,189		837		705
	Thailand		1,245		974		1,015
	Europe		2,058		982		643
	China		749		495		2,734
	Other		2,309		1,601		1,677
		W	57,477	W	57,781	W	47,685

Related_Party_Transactions_Tab

Related Party Transactions (Tables)	12 Months Ended
	Dec. 31, 2013
Related Party Transactions	'
Related Party Transactions	'
		2011		2012		2013
		(In millions of Korean Won)
	Sales to related parties	W	29,110	W	30,061	W	18,562
	Purchases from related parties		2,139		3,312		1,212
	Amounts due from related parties		3,573		2,657		1,773
	Amounts due to related parties		6,373		6,699		5,756

Supplemental_Cash_Flow_Informa1

Supplemental Cash Flow Information and Non-Cash Activities (Tables)	12 Months Ended
	Dec. 31, 2013
Supplemental Cash Flow Information and Non-Cash Activities	'
Supplemental Cash Flow Information and Non Cash Activities	'
		2011		2012		2013
		(In millions of Korean Won)
	Supplemental cash flow information
	Cash paid during the year for income taxes	W	3,832	W	3,727	W	2,373
	Interest paid		58		55		24
	Supplemental non-cash activities
	Reclassification of long-term deferred revenue to deferred revenue	W	3,978	W	1,562	W	1,922
	Reclassification of prepayment to intangible assets		1,392		312		1,361

Description_of_Business_Detail

Description of Business (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Jun. 24, 2008	Apr. 01, 2008
	item	GungHo Online Entertainment Incorporated	GungHo Online Entertainment Incorporated	GungHo Online Entertainment Incorporated
Description of Business	'	'	'	'
Number of subsidiaries	5	'	'	'
Description of business	'	'	'	'
Majority ownership interest in Gravity acquired during the period (as a percent)	'	59.31%	6.92%	52.39%
Number of segments	1	'	'	'

Significant_Accounting_Policie3

Significant Accounting Policies (Details) (KRW)	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2013	Aug. 31, 2013	Dec. 31, 2013	Oct. 31, 2010	Aug. 31, 2012	Aug. 31, 2012
In Thousands, unless otherwise specified	Gravity Interactive, Inc.	Gravity Entertainment Corporation	NeoCyon, Inc.	Gravity Middle East & Africa FZ-LLC	Gravity Games Corporation	Gravity Games Corporation	Gravity Games Corporation	Gravity CIS Co., Ltd.	Gravity RUS Co., Ltd.
Subsidiary or Equity Method Investee	'	'	'	'	'	'	'	'	'
Percentage of Ownership	100.00%	100.00%	96.11%	100.00%	'	85.50%	'	'	'
Percentage of Ownership	'	'	'	'	34.67%	'	50.83%	'	'
Changes in ownership interest in subsidiaries	'	'	'	'	319,000	'	'	'	'
Percentage of ownership interest surrendered	'	'	'	'	'	'	'	100.00%	99.99%

Significant_Accounting_Policie4

Significant Accounting Policies (Details 2)

12 Months Ended

12 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

USD ($)

KRW

KRW

KRW

Out-of-Period Adjustments

Japan

Japan

Japan

Revenue

Revenue

Revenue

Revenue

Revenue

Revenue

Accounts Receivable

Accounts Receivable

Accounts Receivable

Accounts Receivable

Cash and Cash Equivalents

KRW

KRW

KRW

KRW

Geographic concentration risk

Geographic concentration risk

Geographic concentration risk

Customer concentration risk

Customer concentration risk

Customer concentration risk

Credit concentration risk

Credit concentration risk

Credit concentration risk

Credit concentration risk

Credit concentration risk

Countries in Asia

Countries in Asia

Countries in Asia

Japan

Japan

Japan

GungHo Online Entertainment Incorporated

Japan

Japan

Japan

item

GungHo Online Entertainment Incorporated

GungHo Online Entertainment Incorporated

GungHo Online Entertainment Incorporated

KRW

GungHo Online Entertainment Incorporated

GungHo Online Entertainment Incorporated

GungHo Online Entertainment Incorporated

Risks and uncertainties

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Concentration of risk, rate (as a percent)

'

'

'

'

'

'

'

'

81.00%

87.00%

83.00%

38.00%

51.00%

50.00%

'

30.00%

34.00%

45.00%

33.00%

Accounts Receivable

'

'

'

'

'

'

'

'

'

'

'

'

'

'

1,648,000,000

'

'

'

'

Number of financial institutions

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

1

Revenue Recognition

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Understatement of revenue

$45,188,000

47,685,000,000

57,781,000,000

57,477,000,000

981,000,000

14,409,000,000

30,387,000,000

29,513,000,000

'

'

'

'

'

'

'

'

'

'

'

Significant_Accounting_Policie5

Significant Accounting Policies (Details 3) (Payment processing service providers)	Dec. 31, 2013
Minimum	'
Allowance for doubtful accounts	'
Payment processing fee, percent of revenues	1.40%
Maximum	'
Allowance for doubtful accounts	'
Payment processing fee, percent of revenues	15.00%

Significant_Accounting_Policie6

Significant Accounting Policies (Details 4)	12 Months Ended
	Dec. 31, 2013
Computer and equipment	'
Property and Equipment	'
Property and equipment estimated useful lives	'4 years
Furniture and fixtures	'
Property and Equipment	'
Property and equipment estimated useful lives	'4 years
Software	'
Property and Equipment	'
Property and equipment estimated useful lives	'3 years
Vehicles	'
Property and Equipment	'
Property and equipment estimated useful lives	'4 years

Significant_Accounting_Policie7

Significant Accounting Policies (Details 5)	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013	Dec. 31, 2012
	USD ($)	KRW	KRW	Online Game Product Development Costs	Online Game Product Development Costs	Online Game Product Development Costs	Internal Use Software And Website	Internal Use Software And Website
				KRW	KRW	KRW	KRW	KRW
Intangible assets	'	'	'	'	'	'	'	'
Capitalized software development costs	$11,885,000	12,543,000,000	17,387,000,000	12,542,000,000	17,170,000,000	'	90,000,000	217,000,000
Amortization expense for the period	'	'	'	4,613,000,000	3,852,000,000	25,000,000	'	'
Impairment losses	'	'	'	534,000,000	'	'	245,000,000	'

Significant_Accounting_Policie8

Significant Accounting Policies (Details 6) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Advertising	'	'	'
Advertising expense incurred	2,852	4,585	3,121
Accrued severance benefits and pension plan	'	'	'
Severance benefits, minimum length of service requirement	'1 year	'	'

Convenience_Translation_into_U1

Convenience Translation into United States Dollar Amounts (Details)	Dec. 31, 2013
Convenience Translation into United States Dollar Amounts	'
Translations of Korean Won to US dollars, prevailing exchange rate	1,055.25

Restricted_Assets_Details

Restricted Assets (Details) (Gravity Games Corporation, Long-term financial instrument, KRW)	Dec. 31, 2013
In Millions, unless otherwise specified
Gravity Games Corporation | Long-term financial instrument	'
Restricted Assets	'
Restricted long-term financial instrument amount	5

Allowance_for_doubtful_account2

Allowance for doubtful accounts (Details) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Allowance for accounts receivable	'	'	'
Balance at beginning of year	9	8	5
Provision for allowances	23	6	21
Write-offs	'	-5	-18
Balance at end of year	32	9	8

Allowance_for_doubtful_account3

Allowance for doubtful accounts (Details 2) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Allowance for loan receivable	'	'	'
Balance at beginning of year	1,000	'	1,200
Provision for allowances	200	1,000	'
Balance at end of year	1,200	1,000	1,200

Allowance_for_doubtful_account4

Allowance for doubtful accounts (Details 3) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Allowance for doubtful accounts	'	'	'
Loan receivable, bad debt reserve	200	1,000	'
Loan Receivable | Naru	'	'	'
Allowance for doubtful accounts	'	'	'
Loan receivable, short-term	'	300	200
Accounts receivable, accrued interest (as a percent)	'	8.00%	'
Loan receivable, long-term	'	1,000	1,000
Loan receivable, bad debt reserve	200	1,000	'

Equity_Method_Investment_Detai

Equity Method Investment (Details)	Dec. 31, 2012	Dec. 31, 2012	Dec. 31, 2012	Dec. 31, 2005	Dec. 31, 2005
In Thousands, unless otherwise specified	USD ($)	KRW	Online Game Revolution Fund No. 1	Online Game Revolution Fund No. 1	Online Game Revolution Fund No. 1
			KRW	JPY (¥)	KRW
Equity Method Investment	'	'	'	'	'
Equity method investments	$647	647,000	647,000	¥ 100,000	869,000

Equity_Method_Investment_Detai1

Equity Method Investment (Details 2)

12 Months Ended

In Thousands, unless otherwise specified

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

USD ($)

KRW

KRW

KRW

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Gravity EU SAS

Gravity EU SAS

Ingamba LLC

Ingamba LLC

Ingamba LLC

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

Equity Method Investment

'

'

'

'

'

'

'

'

'

'

'

'

Equity income (loss) on investments

($18)

-18,000

-333,000

-242,000

-18,000

-51,000

-38,000

-257,000

-70,000

-25,000

-134,000

13,000

Equity_Method_Investment_Detai2

Equity Method Investment (Details 3)

12 Months Ended

12 Months Ended

0 Months Ended

12 Months Ended

12 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2012

Dec. 31, 2006

Apr. 30, 2004

Apr. 30, 2004

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2009

Dec. 31, 2009

Dec. 31, 2008

Dec. 31, 2008

Dec. 31, 2006

Dec. 31, 2006

Dec. 31, 2005

Dec. 31, 2005

Dec. 31, 2012

Dec. 31, 2012

31-May-12

31-May-12

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

Jun. 30, 2010

Jun. 30, 2010

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

USD ($)

KRW

KRW

KRW

USD ($)

Animation Production Committee

Animation Production Committee

Animation Production Committee

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Online Game Revolution Fund No. 1

Ingamba LLC

Ingamba LLC

Ingamba LLC

Ingamba LLC

Ingamba LLC

Ingamba LLC

Ingamba LLC

Gravity EU SAS

Gravity EU SAS

Gravity EU SAS

Gravity EU SAS

Gravity Entertainment Corporation

Gravity Entertainment Corporation

Gravity Entertainment Corporation

KRW

KRW

KRW

JPY (¥)

KRW

JPY (¥)

KRW

JPY (¥)

KRW

JPY (¥)

KRW

Softbank Corporation

GungHo Online Entertainment Incorporated

USD ($)

KRW

KRW

KRW

KRW

KRW

RUB

KRW

KRW

KRW

KRW

JPY (¥)

KRW

Equity Method Investment

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Investment in limited liability partnership commitment

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

¥ 1,000,000,000

8,713,000,000

'

'

'

'

'

'

'

'

'

'

'

'

'

Equity method investments

'

'

647,000,000

'

647,000

0

123,000,000

1,358,000,000

'

647,000,000

'

'

'

'

'

'

'

100,000,000

869,000,000

'

'

'

'

'

'

'

502,000,000

13,000,000

0

0

'

'

Additional investment in equity method investment

'

'

'

'

'

'

'

'

'

'

'

18,000,000

229,000,000

642,000,000

6,054,000,000

150,000,000

1,245,000,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Ownership of investee (as a percent)

'

'

'

'

'

'

30.00%

30.00%

'

16.39%

'

'

'

'

'

'

'

'

'

49.18%

8.20%

'

'

'

'

'

25.00%

25.00%

'

'

25.00%

100.00%

Equity income (loss) on investments

-18,000

-18,000,000

-333,000,000

-242,000,000

'

'

'

'

-18,000,000

-51,000,000

-38,000,000

'

'

'

'

'

'

'

'

'

'

'

'

-25,000,000

-134,000,000

13,000,000

'

'

'

-257,000,000

-70,000,000

'

Proceeds from disposal of equity method investments

549,000

579,000,000

913,000,000

'

'

'

'

'

579,000,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Accumulated other comprehensive income

1,588,000

1,674,000,000

3,001,000,000

'

'

'

'

'

1,234,000,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Equity method investment, disposal amount

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

800,000

851,000,000

'

'

'

'

'

'

'

'

'

Gain on disposal of equity investments

'

'

528,000,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

528,000,000

'

'

'

'

'

-258,000,000

'

'

'

Gain and loss on investments

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

548,000,000

'

Property_and_Equipment_Net_Det

Property and Equipment, Net (Details)

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

USD ($)

KRW

KRW

Computer and equipment

Computer and equipment

Furniture and fixtures

Furniture and fixtures

Vehicles

Vehicles

Capital lease assets

Capital lease assets

Leasehold improvements

Leasehold improvements

Software

Software

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

Property and Equipment

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Property and Equipment

'

23,370,000,000

26,498,000,000

7,212,000,000

10,867,000,000

2,149,000,000

2,100,000,000

78,000,000

89,000,000

1,287,000,000

1,140,000,000

746,000,000

771,000,000

11,898,000,000

11,531,000,000

Less: accumulated depreciation

'

-21,055,000,000

-22,974,000,000

'

'

'

'

'

'

'

'

'

'

'

'

Property and equipment, net

$2,194,000

2,315,000,000

3,524,000,000

'

'

'

'

'

'

'

'

'

'

'

'

Property_and_Equipment_Net_Det1

Property and Equipment, Net (Details 2) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Property and Equipment, Net	'	'	'
Depreciation expenses	1,852	1,903	1,651

Goodwill_and_other_intangible_2

Goodwill and other intangible assets (Details) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Finite And Indefinite Lived Intangible Assets	'	'	'
Gross Carrying Amount	60,224	58,773	'
Accumulated Amortization	-30,208	-24,228	'
Accumulated Impairment	-17,307	-14,138	'
Net Carrying Amount	12,709	20,407	'
Aggregate amortization expense for intangible assets	5,980	6,479	2,631
In-process research and development technology	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Gross Carrying Amount	8,503	8,503	'
Accumulated Impairment	-8,503	-8,503	'
Impairment loss recognized	'	8,503	'
In-process research and development technology | East Road	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	'	8,503	'
Capitalized software development cost	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Gross Carrying Amount	29,558	29,010	'
Accumulated Amortization	-16,236	-11,623	'
Accumulated Impairment	-779	'	'
Net Carrying Amount	12,543	17,387	'
Capitalized R&D costs, costs of software to be sold, leased, or marketed	548	2,303	5,261
Impairment loss recognized	779	'	'
Capitalized software development cost | Ragnarok Odyssey Ace	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	381	'	'
Capitalized software development cost | Ragnarok Online Guild Masters	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	154	'	'
Capitalized software development cost | Game Station	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	244	'	'
Product Technology	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Gross Carrying Amount	18,536	18,536	'
Accumulated Amortization	-12,503	-11,565	'
Accumulated Impairment	-6,033	-4,609	'
Net Carrying Amount	'	2,362	'
Impairment loss recognized	1,424	2,225	'
Product Technology | Dragonica	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	1,424	2,161	'
Product Technology | Eternal Destiny	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	'	'	799
Product Technology | Maestia	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	237	'	'
Product Technology | Requiem	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	382	'	'
Product Technology | Steal Fighter	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Impairment loss recognized	344	'	'
Trademarks	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Gross Carrying Amount	549	520	'
Accumulated Amortization	-380	-350	'
Accumulated Impairment	-3	'	'
Net Carrying Amount	166	170	'
Impairment loss recognized	3	'	'
Other Finite Lived Intangible Assets	'	'	'
Finite And Indefinite Lived Intangible Assets	'	'	'
Gross Carrying Amount	3,078	2,204	'
Accumulated Amortization	-1,089	-690	'
Accumulated Impairment	-1,989	-1,026	'
Net Carrying Amount	'	488	'
Impairment loss recognized	963	227	'

Goodwill_and_other_intangible_3

Goodwill and other intangible assets (Details 2)	12 Months Ended				12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
	KRW	KRW	KRW	USD ($)	Gravity Games Corporation	Gravity Games Corporation	Gravity Games Corporation	Gravity Games Corporation
					USD ($)	KRW	KRW	KRW
Goodwill	'	'	'	'	'	'	'	'
Goodwill at beginning of the year before accumulated impairment losses	8,232,000,000	8,232,000,000	8,232,000,000	'	'	'	'	'
Accumulated impairment losses at beginning of year	-4,369,000,000	-755,000,000	-241,000,000	'	'	'	'	'
Goodwill at beginning of year	3,863,000,000	7,477,000,000	7,991,000,000	1,147,000	'	'	'	'
Impairment losses	-2,653,000,000	-3,614,000,000	-514,000,000	'	-2,514,000	-2,653,000,000	-3,614,000,000	-514,000,000
Goodwill at ending of the year before accumulated impairment losses	8,232,000,000	8,232,000,000	8,232,000,000	'	'	'	'	'
Accumulated impairment losses at ending of year	-7,022,000,000	-4,369,000,000	-755,000,000	'	'	'	'	'
Goodwill at end of the year	1,210,000,000	3,863,000,000	7,477,000,000	$1,147,000	'	'	'	'

Goodwill_and_other_intangible_4

Goodwill and other intangible assets (Details 3) (KRW)	Dec. 31, 2013
In Millions, unless otherwise specified
Goodwill and other intangible assets	'
2014	4,006
2015	3,964
2016	3,964
2017	675
2018 and thereafter	100
Net Carrying Amount	12,709

Accrued_Severance_Benefits_Det

Accrued Severance Benefits (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
	USD ($)	KRW	KRW	KRW
Accrued Severance Benefits.	'	'	'	'
Balance at beginning of year	'	683,000,000	916,000,000	1,031,000,000
Provisions for severance benefits	63,000	67,000,000	96,000,000	586,000,000
Severance payments	'	-444,000,000	-190,000,000	-648,000,000
Terminated but not yet paid	'	-43,000,000	-139,000,000	-53,000,000
Balance at end of year	$249,000	263,000,000	683,000,000	916,000,000

Accrued_Severance_Benefits_Det1

Accrued Severance Benefits (Details 2) (Deferred Compensation Arrangement with Individual, by Type of Compensation, Pension and Other Postretirement Benefits, KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Gravity Co., LTD.	'	'	'
Defined contribution pension plan ("Pension Plan")	'	'	'
Defined contribution pension plan, contribution	1,114	1,190	1,085
NeoCyon, Inc.	'	'	'
Defined contribution pension plan ("Pension Plan")	'	'	'
Defined contribution pension plan, cost recognized	467	390	97

Commitments_and_Contingencies_1

Commitments and Contingencies (Details) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013
	item
Royalties from Licensing Arrangements	'
Commitments and Contingencies	'
Outstanding licensing agreements	10
Royalties from Licensing Arrangements | Ragnarok Online | Minimum	'
Commitments and Contingencies	'
Licensing agreements, percentage of royalty receivable	24.00%
Royalties from Licensing Arrangements | Ragnarok Online | Maximum	'
Commitments and Contingencies	'
Licensing agreements, percentage of royalty receivable	40.00%
Royalties from Licensing Arrangements | Dragonica	'
Commitments and Contingencies	'
Outstanding licensing agreements	6
Royalties from Licensing Arrangements | Dragonica | Minimum	'
Commitments and Contingencies	'
Licensing agreements, percentage of royalty receivable	20.00%
Royalties from Licensing Arrangements | Dragonica | Maximum	'
Commitments and Contingencies	'
Licensing agreements, percentage of royalty receivable	25.00%
Licensed games | Ragnarok Online | Minimum	'
Commitments and Contingencies	'
Contract period after commercialization in each geographic location	'2 years
Licensed games | Ragnarok Online | Maximum	'
Commitments and Contingencies	'
Contract period after commercialization in each geographic location	'4 years
Licensed games | Steal Fighter	'
Commitments and Contingencies	'
Amount committed for license fee payment	200
Licensed games | Web browser-based game	'
Commitments and Contingencies	'
Amount committed for license fee payment	450

Commitments_and_Contingencies_2

Commitments and Contingencies (Details 2)

12 Months Ended

12 Months Ended

In Thousands, unless otherwise specified

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2011

USD ($)

KRW

KRW

KRW

Principal Payments

Principal Payments

Interest

Interest

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

Capital Lease Obligations

USD ($)

KRW

USD ($)

KRW

Principal Payments

Principal Payments

Principal Payments

Principal Payments

Principal Payments

Principal Payments

Interest

Interest

Interest

Interest

Interest

Interest

USD ($)

KRW

USD ($)

KRW

USD ($)

KRW

USD ($)

KRW

USD ($)

KRW

USD ($)

KRW

Commitments and Contingencies

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Capital lease, principal payment

'

'

'

'

'

'

'

'

$243

256,000

$203

216,000

$151

175,000

'

'

'

'

'

'

Capital lease, interest payment

'

24,000

55,000

58,000

'

'

'

'

'

'

'

'

'

'

22

23,000

36

39,000

52

61,000

Additional capital lease agreements

173

182,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Future minimum lease payments

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

2014

'

'

'

'

137

145,000

11

12,000

'

'

'

'

'

'

'

'

'

'

'

'

2015

'

'

'

'

107

113,000

4

4,000

'

'

'

'

'

'

'

'

'

'

'

'

2016

'

'

'

'

$14

15,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Commitments_and_Contingencies_3

Commitments and Contingencies (Details 3)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013	Dec. 31, 2013
	KRW	KRW	KRW	USD ($)	Korea Software Industry Promotion Agency
					KRW
Operating Leased Assets	'	'	'	'	'
Rental expenses under operating leases	2,342,000,000	2,796,000,000	2,949,000,000	'	'
Lease agreement, guarantee deposit	5,569,000,000	5,767,000,000	'	5,277,000	1,247,000,000
Future minimum rental payments	'	'	'	'	'
2014	2,251,000,000	'	'	'	'
2015	135,000,000	'	'	'	'
2016	81,000,000	'	'	'	'
Total operating lease due	2,467,000,000	'	'	'	'

Commitments_and_Contingencies_4

Commitments and Contingencies (Details 4)	1 Months Ended
In Millions, unless otherwise specified	Apr. 30, 2009	Apr. 30, 2009	Nov. 30, 2011	Aug. 31, 2010	Aug. 31, 2010	Jun. 30, 2011	31-May-10
	ME&A	ME&A	Pending litigation	Pending litigation	Pending litigation	Pending litigation	Pending litigation
	USD ($)	KRW	Repatriation Claims	Repatriation Claims	Repatriation Claims	Compensation Claim	Compensation Claim
			ME&A	ME&A	ME&A	Former Executive	Former Executive
			Director and manager of Gravity Middle East Africa & FZ-LLC	Director and manager of Gravity Middle East Africa & FZ-LLC	Director and manager of Gravity Middle East Africa & FZ-LLC	KRW	KRW
			KRW	AED	KRW
Litigation	'	'	'	'	'	'	'
Damages sought	'	'	'	5	1,628	110	50
Repatriated foreign earnings	1.4	1,820	'	'	'	'	'
Deposits paid pending appeal	'	'	4,140	'	'	'	'

Shareholders_Equity_Details

Shareholders' Equity (Details) (KRW)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2013
			Common shares	Non-voting preferred shares	Non-voting preferred shares	Non-voting preferred shares
					Minimum	Maximum
Shareholders Equity	'	'	'	'	'	'
Common shares and non-voting preferred shares, authorized	40,000,000	'	'	'	'	'
Shares, par value (in Korean Won per share)	'	'	500	500	'	'
Preferred shares, shares authorized (in shares)	2,000,000	2,000,000	'	'	'	2,000,000
Non-voting preferred shares, dividends (as a percent)	'	'	'	'	1.00%	15.00%
Common shares, shares issued (in shares)	6,948,900	6,948,900	'	'	'	'
Common shares, shares outstanding (in shares)	6,948,900	6,948,900	'	'	'	'

Earnings_losses_Per_Share_Deta

Earnings (losses) Per Share (Details)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
	USD ($)	KRW	KRW	KRW
Earnings (losses) Per Share	'	'	'	'
Net income (loss) available for common shareholders (A)	($17,614)	-18,588,000	-12,224,000	14,928,000
Weighted average outstanding shares of common shares (B)	6,948,900	6,948,900	6,948,900	6,948,900
Earnings (losses) per share Basic and diluted (A/B) (in Korean Won per share)	($2.53)	-2,675	-1,759	2,148

Income_Taxes_Details

Income Taxes (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
	USD ($)	KRW	KRW	KRW
Income Taxes	'	'	'	'
Domestic	'	-13,403,000,000	-16,761,000,000	4,878,000,000
Foreign	'	-1,222,000,000	-862,000,000	159,000,000
Income (loss) before income tax expense (benefit) and equity loss on investments	-13,859,000	-14,625,000,000	-17,623,000,000	5,037,000,000
Domestic	'	2,634,000,000	3,715,000,000	3,694,000,000
Foreign	'	'	4,000,000	70,000,000
Current Income Tax Expense (Benefit), Total	'	2,634,000,000	3,719,000,000	3,764,000,000
Domestic	'	2,474,000,000	-1,135,000,000	-11,726,000,000
Deferred Income Tax Expense (Benefit), Total	'	2,474,000,000	-1,135,000,000	-11,726,000,000
Total income tax expenses (benefit)	4,840,000	5,108,000,000	2,584,000,000	-7,962,000,000
Income taxes recognized in other comprehensive income	'	17,000,000	104,000,000	'

Income_Taxes_Details_2

Income Taxes (Details 2)	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
	USD ($)	KRW	KRW	KRW	KRW
Deferred tax assets	'	'	'	'	'
Accrued expense	'	294,000,000	342,000,000	'	'
Allowance for doubtful	'	1,148,000,000	660,000,000	'	'
Investments in subsidiaries and equity method investees	'	232,000,000	1,345,000,000	'	'
Depreciation and amortization	'	743,000,000	1,032,000,000	'	'
Deferred revenue	'	934,000,000	736,000,000	'	'
Provisions for severance benefits	'	15,000,000	80,000,000	'	'
Net operation loss carryforwards in subsidiaries	'	7,085,000,000	3,703,000,000	'	'
Foreign tax credit carryforwards	'	19,441,000,000	20,433,000,000	'	'
Tax credit carryforwards for research and human resource development	'	3,027,000,000	2,763,000,000	'	'
Tax credit carryforwards for social insurance for employment increase	'	78,000,000	'	'	'
Others	'	106,000,000	133,000,000	'	'
Total deferred tax assets	'	33,103,000,000	31,227,000,000	'	'
Less valuation allowance	'	-24,352,000,000	-19,712,000,000	-14,531,000,000	-28,643,000,000
Deferred Tax Assets, Net of Valuation Allowance, Total	'	8,751,000,000	11,515,000,000	'	'
Deferred tax liabilities	'	'	'	'	'
Accrued income	'	80,000,000	76,000,000	'	'
Investments in subsidiaries and equity method investees	'	65,000,000	347,000,000	'	'
Total deferred tax liabilities	'	145,000,000	423,000,000	'	'
Net deferred tax assets (liabilities)	'	8,606,000,000	11,092,000,000	'	'
Current portion of deferred income tax assets	1,358,000	1,433,000,000	2,761,000,000	'	'
Non-current deferred income tax assets	$6,797,000	7,173,000,000	8,331,000,000	'	'

Income_Taxes_Details_3

Income Taxes (Details 3) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Taxes	'	'	'	'
Deferred tax credit carryforwards	2,642	7,214	'	'
Percentage of realizable deferred tax assets from tax credit carry forwards	13.00%	34.00%	'	'
Deferred tax assets realized from net operating loss carry forwards	1,980	'	'	'
Percentage of realizable deferred tax assets from net operating loss carry forwards	100.00%	'	'	'
Net deferred tax assets (liabilities)	8,606	11,092	'	'
Deferred foreign tax credit carryforwards	19,441	20,433	'	'
Tax credit carryforwards for research and human resource development	3,027	2,763	'	'
Deferred tax assets from outside basis difference on investment in subsidiaries	-462	-2,424	'	'
Temporary differences and loss carryforwards, recognized valuation allowance	24,352	19,712	14,531	28,643
Tax expense(benefit) at Korean statutory tax rate, rate (as a percent)	22.00%	22.00%	24.20%	'
Gravity Co., Ltd	'	'	'	'
Income Taxes	'	'	'	'
Net deferred tax assets (liabilities)	2,596	'	'	'
Deferred foreign tax credit carryforwards	18,107	'	'	'
Tax credit carryforwards for research and human resource development	1,683	'	'	'
Deferred tax assets realized from temporary differences	1,488	'	'	'
Percentage of realizable deferred tax assets from temporary differences	57.00%	'	'	'
Tax credits carry forwards, recognized valuation allowance	17,148	'	'	'
Deferred tax assets from outside basis difference on investment in subsidiaries	5,118	'	'	'
Deferred tax liabilities from outside basis difference on investment in subsidiaries	221	'	'	'
Gravity Entertainment Corporation	'	'	'	'
Income Taxes	'	'	'	'
Percentage of Ownership	100.00%	'	'	'
Gravity Entertainment Corporation | Japan	'	'	'	'
Income Taxes	'	'	'	'
Net deferred tax assets (liabilities)	103	'	'	'
Percentage of Ownership	100.00%	'	'	'
Available loss carryforwards	28	'	'	'
Temporary differences and loss carryforwards, recognized valuation allowance	131	'	'	'
Gravity Interactive, Inc.	'	'	'	'
Income Taxes	'	'	'	'
Percentage of Ownership	100.00%	'	'	'
Gravity Interactive, Inc. | United States of America	'	'	'	'
Income Taxes	'	'	'	'
Percentage of Ownership	100.00%	'	'	'
Available loss carryforwards, recognized valuation allowance	2,597	'	'	'
Gravity Interactive, Inc. | Federal Tax | United States of America	'	'	'	'
Income Taxes	'	'	'	'
Available loss carryforwards	2,063	'	'	'
Gravity Interactive, Inc. | State tax | United States of America	'	'	'	'
Income Taxes	'	'	'	'
Available loss carryforwards	534	'	'	'
Gravity Games Corporation	'	'	'	'
Income Taxes	'	'	'	'
Percentage of Ownership	85.50%	'	'	'
Gravity Games Corporation | Korea	'	'	'	'
Income Taxes	'	'	'	'
Net deferred tax assets (liabilities)	584	'	'	'
Deferred foreign tax credit carryforwards	515	'	'	'
Tax credit carryforwards for research and human resource development	174	'	'	'
Percentage of Ownership	85.50%	'	'	'
Available loss carryforwards	2,095	'	'	'
Temporary differences and loss carryforwards, recognized valuation allowance	3,368	'	'	'

Income_Taxes_Details_4

Income Taxes (Details 4)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
	USD ($)	KRW	KRW	KRW	KRW
Reconciliation Of Income Taxes	'	'	'	'	'
Tax expense(benefit) at Korean statutory tax rate, rate (as a percent)	22.00%	22.00%	22.00%	24.20%	'
Tax expense(benefit) at Korean statutory tax rate (2011: 24.2%, 2012, 2013: 22%)	'	-3,217,000,000	-3,877,000,000	1,219,000,000	'
Income tax exemption	'	'	'	-5,000,000	'
Foreign tax credit	'	14,000,000	-387,000,000	-393,000,000	'
Tax credit carryforwards for research and human resource development	'	-1,104,000,000	-997,000,000	-356,000,000	'
Tax credit carryforwards for social insurance for employment increase	'	-78,000,000	'	'	'
Foreign tax differential	'	-156,000,000	-350,000,000	39,000,000	'
Expense not deductible for tax purpose	'	38,000,000	923,000,000	672,000,000	'
Change in valuation allowances	'	4,640,000,000	5,181,000,000	-14,112,000,000	'
Tax effect from consolidation of subsidiaries	'	-462,000,000	-2,424,000,000	'	'
Loss of control in subsidiaries	'	'	258,000,000	1,364,000,000	'
Effect of change in foreign currency exchange rate	'	79,000,000	266,000,000	-52,000,000	'
Expiration of unused foreign tax credit and unused net operating loss carryforwards	'	5,332,000,000	4,054,000,000	3,635,000,000	'
Others	'	22,000,000	-63,000,000	27,000,000	'
Total income tax expense (benefit)	4,840,000	5,108,000,000	2,584,000,000	-7,962,000,000	'
Tax examination, recognized income tax expense for penalties	'	'	'	'	133,000,000
Tax examination, withholding taxes due	'	'	'	'	608,000,000

Income_Taxes_Details_5

Income Taxes (Details 5) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes	'	'	'
Balance at Beginning of Year	19,712	14,531	28,643
Increase (decrease)	4,640	5,181	-14,112
Balance at End of Year	24,352	19,712	14,531

Operations_by_Geographic_Area_1

Operations by Geographic Area (Details)

12 Months Ended

In Thousands, unless otherwise specified

Dec. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

USD ($)

KRW

KRW

KRW

Korea

Korea

Korea

Japan

Japan

Japan

Taiwan and Hong Kong

Taiwan and Hong Kong

Taiwan and Hong Kong

United States of America

United States of America

United States of America

Russia

Russia

Russia

Brazil

Brazil

Brazil

Thailand

Thailand

Thailand

Europe

Europe

Europe

China

China

China

Other

Other

Other

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

KRW

Revenues by geographic region

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Revenue

$45,188

47,685,000

57,781,000

57,477,000

15,491,000

14,762,000

10,458,000

14,409,000

30,387,000

29,513,000

3,106,000

2,244,000

3,590,000

7,725,000

5,023,000

5,879,000

180,000

476,000

487,000

705,000

837,000

1,189,000

1,015,000

974,000

1,245,000

643,000

982,000

2,058,000

2,734,000

495,000

749,000

1,677,000

1,601,000

2,309,000

Operations_by_Geographic_Area_2

Operations by Geographic Area (Details 2) (Property, Plant and Equipment, Other Types, Geographic concentration)	12 Months Ended
	Dec. 31, 2013
Korea	'
Operations by Geographic Area	'
Concentration of risk, rate (as a percent)	82.00%
United States of America	'
Operations by Geographic Area	'
Concentration of risk, rate (as a percent)	18.00%

Related_Party_Transactions_Det

Related Party Transactions (Details) (KRW)	12 Months Ended						12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013	Jun. 24, 2008	Apr. 01, 2008	Dec. 31, 2012	Dec. 31, 2011
				GungHo Online Entertainment Incorporated	GungHo Online Entertainment Incorporated	GungHo Online Entertainment Incorporated	Ingamba LLC	Ingamba LLC
Related Party Transactions	'	'	'	'	'	'	'	'
Sales to related parties	18,562	30,061	29,110	'	'	'	138	275
Purchases from related parties	1,212	3,312	2,139	'	'	'	'	'
Amounts due from related parties	1,773	2,657	3,573	'	'	'	'	47
Amounts due to related parties	5,756	6,699	6,373	'	'	'	'	'
Description of business	'	'	'	'	'	'	'	'
Majority ownership interest in Gravity acquired during the period (as a percent)	'	'	'	59.31%	6.92%	52.39%	'	'
Revenue from related parties	18,562	30,061	29,110	'	'	'	138	275
Due from related parties	1,773	2,657	3,573	'	'	'	'	47

Supplemental_Cash_Flow_Informa2

Supplemental Cash Flow Information and Non-Cash Activities (Details) (KRW)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Supplemental cash flow information	'	'	'
Cash paid during the year for income taxes	2,373	3,727	3,832
Interest paid	24	55	58
Supplemental non-cash activities	'	'	'
Reclassification of long-term deferred revenue to deferred revenue	1,922	1,562	3,978
Reclassification of prepayment to intangible assets	1,361	312	1,392