[Click eStock] "Krafton, Growing Market Expectations as New Release Approaches"

Escape from the Risk of Operating Only One Game
Mirae Asset Securities "Maintain Krafton's Target Price at 670,000 Won"

[Asia Economy Reporter Gong Byung-sun] As Krafton’s new release approaches, market expectations are growing. The performance of existing games is also expected to continue its growth trend in the third quarter of this year.

According to Mirae Asset Securities on the 20th, Krafton is preparing to launch its new title, ‘Battlegrounds: New State.’ This is an expansion pack of ‘Battlegrounds Mobile,’ which was released in 2018.

The momentum for the new release is expected to fully kick off starting this November. Battlegrounds Mobile was co-developed with China’s Tencent in 2018, and Tencent also handled global publishing. However, Battlegrounds: New State is solely developed and globally published by Krafton. Mirae Asset Securities assumed daily average sales of 5.2 billion KRW for Battlegrounds: New State in the fourth quarter of this year and 10.4 billion KRW daily average sales next year.

Kim Chang-kwon, a researcher at Mirae Asset Securities, explained, “By publishing directly, Krafton will increase its revenue recognition rate,” adding, “It will also address the shortcomings of Battlegrounds Mobile, which, under Chinese publishing, failed to secure key gaming markets such as the U.S. and Europe.”

Meanwhile, the performance of existing games is expected to show growth in the third quarter of this year. Monthly and quarterly sales of Battlegrounds Mobile and China’s Peacekeeper Elite are both projected to increase. Researcher Kim said, “The Taego map, released last July, contributed to the solid performance in the third quarter.”

Accordingly, Mirae Asset Securities maintained its investment opinion of ‘Buy’ on Krafton with a target price of 670,000 KRW. The closing price on the previous day was 493,500 KRW. Researcher Kim forecasted, “The confirmation of the release schedule for Battlegrounds: New State and its potential success in the global gaming market will mitigate the risk of operating only one game,” adding, “It will also raise expectations for the Battlegrounds console expansion pack, Callisto Protocol, scheduled for release next year.”