Education Industry Unable to Smile Despite Good Performance...Double Whammy of Low Birthrate and Policy Uncertainty

[Financial News] Despite improved performance, the education industry is facing a structural crisis due to the declining school-age population and the wavering government policy on AI Digital Textbooks (AIDT). The EdTech ecosystem, which had raised growth expectations, is being driven into restructuring and survival crises amid uncertainty.
According to financial information company FnGuide on the 14th, Woongjin ThinkBig is expected to record sales of 222 billion KRW and an operating profit of 7 billion KRW in the second quarter of 2025. This is an increase of 0.4% and 6.2%, respectively, compared to the same period last year. Daekyo is expected to turn a profit with sales of 162.2 billion KRW and an operating profit of 1.4 billion KRW. During the same period, Megastudy Education's sales are expected to decrease by 3.5% to 207 billion KRW compared to the previous year, but operating profit is expected to increase by 6.9% to 34.3 billion KRW.
Despite the good performance, the decline in the school-age population due to low birth rates is acting as a structural risk factor for the education industry. Of course, the private education market is still growing. According to the 'Private Education Expenditure Survey' released by Statistics Korea, the total amount of private education expenditure in Korea in 2024 was 29 trillion KRW, an increase of 2 trillion KRW compared to the previous year. 
Despite such high educational demand, EdTech companies have recently faced a crisis due to the uncertainty of the government policy promoting AIDT introduction. On the 10th, the National Assembly's Education Committee passed an amendment to the Elementary and Secondary Education Act that demotes the legal status of AIDT from 'textbook' to 'educational material'. 
As a result, more than 20 EdTech and textbook publishers, including Kyowon, Ice Cream Media, YBM, Jihaksa, and Cheonjae Education, held an emergency press conference in Yeouido, Seoul, on the 11th, urging to "immediately stop attempts to change the status of AI textbooks." On this day, representatives of AIDT publishers, including the Textbook Development Committee, visited the Presidential Office's Civil Affairs Office to submit a joint statement demanding the withdrawal of the proposed legal amendment.
Park Jung-gwa, CEO of Cheonjae Education, said, “5.3 billion KRW of national funds were invested in establishing the AI textbook infrastructure, and publishers invested a total of 8 billion KRW, 400 million KRW per textbook.” He appealed, “If the development costs are not recovered, restructuring is inevitable.” There were also concerns that about 10,000 employees working for AI textbook publishers could become targets for restructuring.

jimnn@fnnews.com Shin Ji-min Reporter