KRAFTON 4Q22 & FY2022 Earnings Results

Key insights

7 takeaways

01
KRAFTON reported 2022 annual revenue of KRW 1,854.0 billion, a 1.7% year-over-year decline, while operating profit rose 15.5% to KRW 751.6 billion.See it on page 4
02
The transition of PUBG PC and console titles to a free-to-play model drove the addition of 45 million new registered users.See it on page 3
03
Console segment revenue surged by 430.2% year-over-year, significantly bolstered by new title releases and studio portfolio expansion.See it on page 7
04
Fourth-quarter 2022 revenue grew 6.8% year-over-year to KRW 473.8 billion, though the company recorded a net loss due to intangible asset impairment.See it on page 10
05
Mobile revenue faced headwinds in 2022 due to global market reopening trends and the suspension of BGMI in India.See it on page 6
06
The company’s 2023–2025 roadmap prioritizes new titles like Project BlackBudget and the next Subnautica installment, alongside investments in AI and user-generated content platforms.See it on page 11
07
KRAFTON has initiated a three-year capital allocation plan focused on enhancing shareholder value through the buyback and retirement of treasury shares.See it on page 17

Summary

KRAFTON’s 2022 fiscal year results reflect a period of strategic transition toward a free-to-play (F2P) model for its flagship PUBG PC and console titles, alongside a diversification of its development pipeline. The company reported annual revenue of KRW 1,854.0 billion, a slight decline of 1.7% year-over-year, while operating profit grew by 15.5% to KRW 751.6 billion. The fourth quarter of 2022 showed positive momentum with revenue reaching KRW 473.8 billion, a 6.8% increase compared to the same period in the previous year, bolstered by the launch of The Callisto Protocol and stable performance in core live services.

Key operational highlights include a significant expansion of the global user base, with 45 million new registered users added to PUBG PC and console platforms following the F2P transition. While mobile revenue faced headwinds due to the global market reopening and the suspension of BGMI in India, the company maintained strong engagement through live service updates. The console segment experienced substantial growth, with revenue increasing by 430.2% year-over-year, driven by new title releases and a growing portfolio of creative studios. However, the company recorded a net loss in the fourth quarter, primarily attributed to non-operating losses stemming from the impairment of intangible assets.

Looking forward, the company is prioritizing a multi-year development roadmap spanning 2023 to 2025, which includes the incubation of new titles such as Project BlackBudget and the next installment of the Subnautica franchise. Strategic investments are also focused on artificial intelligence, deep learning, and the creation of an open-world user-generated content platform. To enhance shareholder value, the company has committed to a three-year capital allocation plan, which includes the buyback and retirement of treasury shares funded by a portion of its free cash flow.