Krafton has doubled down on its growth strategy. The South Korean publisher plans to continue investing in studios of various sizes around the world.
PUBG
Over the past two years, Krafton has met with or reviewed over 1,000 studios for potential investment over the past two years. As a result, the company spent $680 million acquiring minority stakes in game developers during that period, CEO Kim Changhan told Bloomberg.
According to its latest financial report, Krafton invested in 13 studios in the first three quarters of 2024. This is up from 11 investments in 2023 and just five in 2022.
Its most notable recent deals include the Tango Gameworks acquisition and an IP licensing agreement with Pocketpair to develop Palworld Mobile (similar to a partnership it made with Ironmace for Dark and Darker Mobile).
“We have ambitious plans to scale our business,” Kim said, adding that Krafton plans to spend another ₩200 billion ($136 million) to invest in over a dozen studios in 2025.
As the company stated in its Q2 report, it also aims to invest in first-party production and make efficient M&A deals with the goal of creating new IPs with franchise potential (i.e. $1 billion in annual value).
According to Bloomberg, Krafton shares are up more than 70% since the start of 2024. It posted the three consecutive quarters of record revenues last year, generating nearly ₩2.1 trillion ($1.4 billion) in the period from January 1 and October 31, 2024.
In addition, the company has also been actively exploring AI, having invested over ₩1 trillion ($680.8 million) from 2021 to September 2024 to secure AI talent and build its R&D capabilities in the field. Kim noted that Krafton already has 80 engineers focused on deep learning and AI technologies and plans to add another 35 people to the team this year.
The publisher also used Nvidia’s new technology ACE to build its own model called CPC (Co-playable Character) and create NPCs “capable of dynamic interactions with players, including real-time conversations, strategic cooperation, and flexible responses tailored to in-game scenarios.” It will be used in PUBG and the upcoming life sim inZOI.