Krafton steps up India bets to build next global gaming franchise beyond PUBG

Krafton Inc. aims to deliver a global gaming hit from a budding development studio in India, leveraging the presence in one of its top markets to define its next stage of growth.

Best known for creating PUBG: Battlegrounds and initiating the battle royale genre of multiplayer games, Seoul-based Krafton is ramping up investment in India and is in advanced discussions to acquire another studio in the country, its local chief said in an interview.

The company has yet to strike on a second intellectual property franchise with as much reach or influence as PUBG, which it’s attempting to expand into a wider entertainment universe that includes more than just games. In India, it’s actively searching for its next tentpole title.

“I firmly believe that India can produce globally recognized gaming IP,” Sean Hyunil Sohn, chief executive officer at Krafton India told Bloomberg News. “Given the potential talent pool, and given the quality of entertainment products coming out of India, I think it’s getting widely accepted by global audiences.”

The global games industry is still grappling with a painful post-pandemic slowdown, with widespread layoffs and studio closures, especially in higher-cost regions like the US. India has a depth of software engineering expertise and presents a better cost proposition, even if it hasn’t yet established a strong reputation in games development.

Krafton has a team of 12 core members in the southern tech hub of Bangalore. They’re working to diversify the company’s games catalog and expand beyond the battle royale genre. Part of the challenge of creating new games is a glut of entertainment options and a handful of so-called evergreen games that many people return to habitually — PUBG is one of them, rebranded and localized as Battlegrounds Mobile India (BGMI) in 2021.

India is among Krafton’s top five markets by revenue and BGMI is approaching 270 million downloads. To bolster its work in the country, Krafton last year purchased a controlling stake in Nautilus Mobile, the Pune-based maker of mobile game Real Cricket.

“We are trying to find and invest more in a team that has gone through at least one or two cycle of developments, so that there is a proven capacity,” Sohn said.

The Krafton Bangalore development team could swell to as many as 50 people over the next two years, with artificial intelligence helping to bridge the shortage of experienced gaming talent in India, Sohn said.

Krafton has invested $250 million in India’s digital entertainment, gaming and fintech startups as of September. It now wants to pour another $250 million in the South Asian region’s growing AI and robotics sectors. The strategy is to better connect its digital entertainment business, according to the Krafton India CEO.