Krafton enters metaverse space with investment in Naver’s Zepeto

Krafton Inc., one of South Korea’s major game developers, is entering the metaverse space by investing 5 billion won ($4.2 million) in Zepeto, a metaverse platform operated by a unit of the country’s top internet portal Naver Corp.

Krafton, the developer of the multiplayer battle game PlayerUnknown's Battlegrounds (PUBG), has made the investment in Naver Z Corp. to look for business opportunities in the emerging digital world, according to industry sources.

The investment, made before Naver Z’s recent fundraising, which attracted global investors such as SoftBank Group Corp., will give Krafton about a 3% stake in the Zepeto operator before equity dilution.

Last week, Naver Z said it secured $190 million from Softbank and other investors in a Series B fundraising round to expand its business globally.

The Series B round, led by the SoftBank Vision Fund 2, has also attracted a group of Korean investors such as HYBE Co., the label behind boyband BTS, YG Entertainment Inc. of girl group Blackpink, JYP Entertainment Inc., Mirae Asset Capital, and Mirae Asset Consulting.

Launched in August 2018, Zepeto boasts some 240 million accumulated users globally, one of the largest customer bases for Korea’s web-based services excluding online games.

The app allows users to play games, communicate with others through 3D avatars, as well as make money through the production of fashion items and other content.

Zepeto is particularly popular among Gen Z users as the metaverse platform offers a 3D avatar fan community service with K-pop idols such as Blackpink and TWICE. Global luxury brands such as Gucci and DIOR also showcase their new products on Zepeto.

MAJOR AXIS OF FUTURE GROWTH

Bae Dong-keun, chief financial officer of Krafton, said during an earnings conference call with analysts last month that the metaverse, which he dubbed the “interactive virtual world,” is the game company’s major axis for future growth.

“The recent hype about the NFTs (non-fungible tokens) has also been borne out of the interactive virtual world. We’re very much attracted to the world,” he said.

Krafton is not alone in the Korean gaming industry actively pursuing new business opportunities in the metaverse.

Netmarble Corp. in August launched a separate metaverse affiliate, Metaverse Entertainment, to develop a virtual reality world and offer game-related metaverse content such as virtual idols.

Com2uS Corp., the creator of the popular game Summoners War, acquired in August the management right of WYSIWYG Studios Co., a metaverse company that specializes in visual effects (VFX) technologies and creates video content, for 160.7 billion won.

Nexon Co., using its online game Maple Story, one of its most popular intellectual properties, plans to turn it into a metaverse game.

Pearl Abyss, a Korean video game developer and publisher, known for creating the cross-platform MMORPG Black Desert Online, is developing DokeV, a metaverse-based creature-collecting open world action-adventure video game.

Write to Joo-Wan Kim at kjwan@hankyung.com
In-Soo Nam edited this article.