Thanks to another interview with the producer of The Legend Of Korra Video Game with IGN, we know have some details about the villain of the game.
Here is a link to the video, the Korra stuff is around the halfway mark through.
http://ie.ign.com/videos/2014/10/06/the-legend-of-korra-old-men-vs-17-year-olds
The name is Hundun (No sure on the spelling, Ancient Chinese word for Chaos) and he is an enemy of the Avatar and has fought against a previous Avatar many years ago before being sealed in the spirit world or something like that. What the producer reveals is that he is freed back into the world by Korra opening the portals. So either he was sealed by some spiritual barrier similar to the portals or he was sealed in the spirit world. He mentions something about him existing only in the spirit world.
I find his design very interesting, just a super creepy old man with some spirit powers or some ability to control others, which may explain why you fight, Chi Blockers, Triads and spirits in the game.
I am so excited for when this game comes out on October 21st/22nd
