Krafton profit triples on PUBG's continued success

Krafton's triple-digit growth in operating profit was driven by strong demand for PUBG, with revenue and profit soaring above market expectations.

[KRAFTON]

Krafton announced a surprising triple-digit growth in operating profit for the April-June period driven by strong global demand for the game publisher’s flagship battle royale shooter, PUBG: Battlegrounds.

Operating profit soared 152.6 percent on year to 332.1 billion won ($242 million), by far exceeding market consensus of 199.2 billion won compiled by market tracker FnGuide.

Revenue jumped 82.7 percent on year to 707 billion won, outperforming the market expectation of 550.8 billion won.

Net profit skyrocketed 165.7 percent to 341.4 billion won, also outperforming the analyst forecast of 176.1 billion won.

The game publisher updates made to PUBG, its “Erangel Classic” map service and collaborations with K-pop girl group NewJeans contributed to the rise players of the title's PC and console versions. Monthly active users spiked 40 percent on year in the first half of 2024 while the number of paying users soared 130 percent during the same period.

On the mobile front, PUBG Mobile and Battlegrounds Mobile India (BGMI) received positive feedback. PUBG Mobile contributed significantly to the increase in traffic and sales through collaboration with popular actor Myriam Fares and updated skins.

BGMI’s daily active users and paying users surged 30 and 40 percent on year, respectively, in the first half of 2024.

Krafton is looking to diversify its revenue streams with the launch of two titles this year: Dark and Darker Mobile and inZOI. Both games will be showcased at Gamescom 2024 at the end of this month.

Dark and Darker Mobile, which wrapped up its second global beta on Monday, is scheduled for a global release in the fourth quarter. inZOI is currently in development with the goal of entering early access this year.

Krafton Chief Financial Officer Bae Dong-geun expressed confidence in the two titles on the company's earnings call.

“The second beta test wrapped up on Monday morning, so we need to review the specific metrics,” Bae said, commenting that the number of participating users “exceeded expectations.”

The company is betting that inZOI will find a niche as a new iconic simulator.

“The life simulation genre has been loved and played by global gamers for over 20 years since the early 2000s, yet there have been no competitive or new emerging games,” Bae said. “The primary target audience for inZOI is players who have previously enjoyed the genre and also gamers worldwide who are new to the genre.”

The game publisher is also focusing on equity investments to discover new intellectual properties. It has invested in 27 companies since 2021, including 14 in North America and eight in Europe, with the latest addition coming from Japanese game developer Tango Gameworks.

The scale of investment was not disclosed, but Krafton said on Monday that had it recruited new talent from Tango Gameworks’ development team and acquired publishing rights to the latter’s popular rhythm action title Hi-Fi Rush.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]