Deterrence has long served as the foundation of stability on the Korean Peninsula, despite North Korea’s persistent military provocations. Yet, structural vulnerabilities amidst the changing global order—most notably South Korea’s demographic decline, uncertainties in the U.S.–ROK relationship and deepening North Korea–Russia alliance—raise serious concerns about future conflicts. This paper addresses these concerns by extending a three-player extensive game-theoretic framework to model strategic interactions between North Korea, South Korea, and the United States. By integrating variables for military capability, alliance credibility, and nuclear retaliation risks, the research aims to quantify shifting payoffs and derive Subgame Perfect Equilibria to understand how deterrence capabilities evolve. Analysis shows that the likelihood of military escalation increases as South Korea’s military manpower diminishes and U.S. commitment wavers, depicting the erosion of deterrence that is not merely theoretical. These findings underscore the need for South Korea to further invest in military technology, reassess U.S.–ROK dependency, and address long-term structural weaknesses for the future.