Krafton

Krafton’s financial performance for the first half of 2026 demonstrates significant growth, driven by the continued expansion of the PUBG franchise and the successful early access launch of new intellectual property. The company reported record-high half-year revenue of KRW 2.7 trillion, representing a 73.3% increase year-over-year. Operating profit for the same period reached KRW 972.5 billion, a 38.3% increase compared to the previous year, effectively achieving 92% of the total operating profit recorded for the full 2025 fiscal year.

The core PUBG franchise remains the primary engine for this growth, bolstered by content platformization and the integration of user-generated content (UGC) through the World of Wonder creation tools. This strategy has successfully reactivated core fandom engagement and expanded traffic. Simultaneously, the company is executing a repeatable franchise growth model, evidenced by the performance of Subnautica 2, which surpassed 5 million units sold within 22 days of its early access release. This success validates the company’s systematic approach to discovering and scaling genre-defining titles, with five additional projects currently in development or validation stages.

Despite strong revenue, the second quarter of 2026 saw a 5.9% quarter-over-quarter revenue decline and a 26.8% decrease in operating profit, alongside a net loss of KRW 29.9 billion for the quarter. These results were influenced by increased operating expenses, which rose 111.4% year-over-year due to higher platform fees, commissions, and the inclusion of new subsidiaries. Nevertheless, the company maintains a robust financial position and remains committed to shareholder returns, announcing an additional KRW 100 billion share buyback and cancellation plan for the third quarter of 2026, following the completion of significant capital reduction and share cancellation programs earlier in the year.

Krafton’s fiscal year 2025 performance reflects a strategic pivot toward aggressive portfolio diversification and technological expansion, underpinned by the enduring strength of the PUBG franchise. Annual revenue reached KRW 3.3 trillion, representing a 23% year-over-year increase fueled by the transition to PUBG 2.0 on Unreal Engine 5 and the successful Early Access launches of new intellectual properties such as inZOI and MIMESIS, both of which surpassed one million units sold. Despite this top-line growth, annual operating profit declined by 11% to KRW 1.1 trillion, with a sharp contraction in the fourth quarter to KRW 2.4 billion. This margin compression resulted from heightened investment in a 26-title development pipeline and significant one-off costs associated with scaling production capabilities.

The company’s financial position remains robust, with total assets expanding to KRW 9.4 trillion, driven by a substantial increase in intangible assets and physical infrastructure. While total liabilities more than doubled to KRW 2.2 trillion, equity remained stable at KRW 7.1 trillion, supported by healthy retained earnings. To maintain investor confidence amidst these heavy investment cycles, a shareholder return policy exceeding KRW 1 trillion has been established for the 2026–2028 period.

Looking forward, the corporate strategy emphasizes securing a second flagship franchise through disciplined M&A and an annual KRW 300 billion investment in new title production. Beyond traditional gaming, growth initiatives are increasingly focused on the integration of artificial intelligence into game development and the exploration of "Physical AI" and humanoid robotics. This transition signals an intent to evolve from a software-centric publisher into a broader technology entity, leveraging its gaming expertise to capture emerging opportunities in robotics and advanced automation.

The primary aim of the presentation is to convey KRAFTON’s financial performance and strategic direction for its PUBG intellectual property and related franchise initiatives during the first quarter of 2025. Consolidated results prepared under Korean IFRS show record quarterly revenue of KRW 874.2 billion, a 31.3 percent increase year‑on‑year, driven by strong growth across PC, mobile and console platforms. Operating profit reached KRW 457.3 billion, up 47.3 percent YoY, while adjusted EBITDA rose to KRW 505.1 billion, reflecting a 33.4 percent improvement. Net profit improved modestly to KRW 371.5 billion (+6.6 percent YoY) but fell 24.4 percent quarter‑on‑quarter due to foreign‑exchange effects and higher non‑operating expenses.

Platform‑level analysis reveals mobile revenue of KRW 532.4 billion, up 32.3 percent YoY and 47.0 percent QoQ, while PC revenue climbed to KRW 323.5 billion, a 32.8 percent YoY rise. Console contributions increased 14.2 percent YoY to KRW 13.1 billion. The “Others” category declined sharply, falling 39.2 percent YoY, indicating a shift toward core PUBG services. Personnel costs grew 22.2 percent YoY, reflecting expanded development and publishing activities.

Strategically, KRAFTON emphasizes expanding the PUBG franchise through new titles across diverse genres, including a life‑simulation spin‑off and an extraction‑RPG, with early‑access releases targeting 1 million copies sold within a week. The company is integrating advanced AI features such as on‑device language models to enhance gameplay, and it is strengthening its publishing foothold in India via collaborations on the BGMI platform and acquisition of a leading cricket game IP. These initiatives aim to sustain long‑term fan engagement, diversify revenue streams, and position PUBG as a globally influential, evergreen IP.

This regulatory notification, dated June 28, 2023, details a significant change in the shareholding structure of PCF Group S.A., a Polish public company. The filing was submitted by Krafton Inc., a South Korean video game holding company, to the Polish Financial Supervision Authority and PCF Group S.A. in compliance with the Polish Act on Public Offering.

The primary purpose of the notification is to report that Krafton Inc. has exceeded the 10% threshold of total voting rights in PCF Group S.A. This change was triggered by Krafton’s subscription for 3,342,937 series F shares and the subsequent registration of a share capital increase by the National Court Register on June 22, 2023. Prior to this registration, Krafton Inc. held no shares in the company.

Following the transaction, Krafton Inc. holds exactly 3,342,937 shares, representing approximately 10.00% of the company’s share capital. These shares entitle the holder to an equivalent 3,342,937 votes at the general meeting of shareholders, which also constitutes approximately 10.00% of the total voting rights. The notification confirms that Krafton Inc. does not hold these shares through any subsidiaries, nor does it hold any other financial instruments that could lead to the acquisition of additional voting rights. The scope of the document is limited to this specific equity transaction within the Polish gaming and financial sectors as of June 2023.