PUBG’s glorious comeback in India boon to Krafton

South Korea’s game developing and publishing giant Krafton Inc. boasted the local gaming industry’s highest operating margin, above 40%, in the third quarter mainly thanks to a fast recovery in its Indian business, underscoring the importance of overseas markets for Korean gaming companies' growth.

The company announced in a regulatory filing on Tuesday last week that it earned 189.3 billion won ($143.4 million) in operating profit on a consolidated basis in the July-September period. 

This was 30.9% higher than the same period last year, reversing course from the previous quarter when it reported a 20.7% on-year drop in profit on an 8.6% contraction in revenue.

It also reported 450.3 billion won in revenue in the third quarter, up 3.8% from a year ago.

Thanks to the solid results, Krafton’s operating margin reached 43.8%, the highest among Korean gaming companies, it said.

The company’s stellar performance last quarter was largely driven by the return of its global mega-hit “PlayerUnknown’s Battlegrounds” (PUBG) to the Indian market after a 10-month ban by the Indian government in the fastest-growing mobile game market in Asia.

INDIA’S EXCITEMENT FOR PUBG REVIVES 

Krafton’s mobile game business saw revenue up 9% on-year to 309.1 billion won thanks to the resumption of “Battlegrounds Mobile India” (BGMI), the Indian version of PUBG Mobile, in May on top of the successful debut of “Battle Royale: Dragon Ball Super,” a new PUBG version launched via collaboration between PUBG Mobile and Dragon Ball, the company said last week.

BGMI, which landed in India in July 2021, attracted more than 100 million cumulative players and became the No. 1 game on the App Store in the market within a year of its release.

But the Indian government in July last year abruptly banned the game in the country without providing reasons for the suspension.

India lifted its ban on the online multiplayer battle royale game this summer, and its revenue and traffic soon recovered to pre-suspension levels, the company said, adding that it continues to attract new users.

It last month hosted a major esports friendship league in the world’s most populous country after BGMI resumed its service and has been actively exploring and providing localized content to maintain the upswing in the market.

Its Indian affiliate in August also announced a plan to invest an additional $150 million into the South Asian country over the next two to three years, following a combined $140 million investment in 11 Indian companies to date since 2021.

PUBG is Krafton’s core intellectual property (IP), generating steady revenue across platforms since its debut in 2017.

GOING GLOBAL IS A KEY FOR GROWTH 

Other Korean gaming companies aggressively pursuing overseas business with diverse new titles also did well in earnings last quarter.

Nexon Co. reported that its third-quarter revenue from North America and Europe surged 77.6% on-year to 8.9 billion yen ($58.9 million) and that from other regions including China, Japan and Southeast Asia rose 10% to 20%.

As a result, its operating profit in the third quarter jumped 47% on-year to 31.5 million yen on sales of 97.5 million yen, up 23% from a year ago, according to the company's filing.

NCSOFT Corp. and Netmarble Corp., however, reported poor earnings in the same quarter.

NCSOFT is mulling mergers and acquisitions to diversify its game lineup to appeal to broader users, according to the company.

It currently relies heavily on the medieval fantasy massively multiplayer online role-playing game "Lineage," which hit the market in 1998.

It also plans to introduce seven new titles at G-Star 2023. 

Netmarble, which reported an operating loss last quarter, also lacks hit new games that appeal to gamers worldwide.

Write to Seung-Woo Lee at leeswoo@hankyung.com


Sookyung Seo edited this article.