Krafton Throws Down the Gauntlet: "Actively Targeting Not Only India but Also the Middle East and North Africa"

Confident in India Sales Growth... "Emerging as a Leading Overseas Game Company"
Directly Refuting Criticism of Excessive China Sales

Jang Byung-gyu, Chairman of the Board of Krafton, is explaining future strategies at an online initial public offering (IPO) press conference on the 26th.

[Asia Economy Reporter Minwoo Lee] Krafton, preparing for its initial public offering (IPO), emphasized its ambitious growth momentum. The company aims to expand its presence beyond the already established Indian market to the Middle East and North Africa, broadening Krafton's reach.

On the 26th, Krafton held an online press conference to announce this growth strategy. Leveraging the intellectual property (IP) "Battlegrounds," which has been recognized in both Eastern and Western cultures, along with various new titles, Krafton is targeting the global stage. The company highlighted its transformation into a world-class technology firm by actively investing in deep learning and entertainment, expanding across the entire content spectrum.

Jang Byung-gyu, Chairman of Krafton's Board, particularly emphasized that the flagship title "Battlegrounds" has become the "national game" in the Indian market. Last year, it ranked first in game application (app) revenue in India and surpassed 270 million cumulative downloads. "Battlegrounds Mobile India," relaunched earlier this month after a nine-month ban due to border disputes between China and India, achieved 34 million cumulative users, 16 million daily users, and a peak of 2.4 million concurrent users within just one week of release.

Chairman Jang stated, "Even without releasing an iOS version, returning to the previous service numbers after a nine-month hiatus is no easy feat," emphasizing, "This signifies the strong fandom of the Battlegrounds IP." Additionally, the game continues to perform well in the Middle East and North Africa regions, ranking first in revenue in 15 out of 16 countries and recording 250 million downloads, equivalent to about 50% of the total population.

Regarding concerns about overreliance on Chinese revenue, which sparked debates over the IPO's valuation, CFO Bae expressed confidence. He said, "Although many top-tier developers depend heavily on China in the mobile market, Krafton's actual end-user-based revenue from China is less than half," adding, "Battlegrounds (PC and console) and various other games that we directly service account for more than half of total revenue."

He also expressed confidence in the ongoing institutional investor demand forecast. Chairman Jang hinted, "Some overseas institutional investors have shown interest in the Korean market for the first time because of Krafton." CFO Bae explained, "Selective long-term overseas investors worldwide have placed significant trust in Krafton," and added, "They view Krafton not as a fast follower or just an Asian company, but as a leading global enterprise."

Seventy percent of the funds raised through the IPO will be used for mergers and acquisitions (M&A). For the past two years, Krafton has been building and exchanging a database (DB) to acquire promising IPs and capable developers worldwide. CFO Bae Dong-geun stated, "Krafton's IP is highly recognized in overseas markets, so the potential is substantial," and explained, "Although there were limitations due to lack of funds, now that we can secure capital through the IPO, we plan to actively pursue overseas M&A."

Of the remaining 30% of the funds, half will be invested to expand Krafton's influence centered on gaming in India, the Middle East, and further into North Africa. In India, investments in game streaming, esports, and content will be expanded. The remaining funds will be used to build various infrastructures to secure competitiveness as a developer. CFO Bae said, "We will invest in equipment capable of supporting high-performance technologies such as interactive virtual worlds and deep learning."

Meanwhile, Krafton plans to raise approximately KRW 4.31 trillion (based on the upper limit of the offering price range) through this public offering. The total number of shares offered is 8,654,230, with the offering price range set between KRW 400,000 and KRW 498,000. The demand forecast for institutional investors, which began on the 14th, will end on the 27th. Based on the finalized offering price, subscription for general investors will take place on the 2nd and 3rd of next month. The KOSPI listing is expected in early next month. Mirae Asset Securities is the lead underwriter, with Credit Suisse Seoul Branch, NH Investment & Securities, Citigroup Global Markets Korea, and JP Morgan as joint underwriters. Samsung Securities is participating as a member of the underwriting consortium.