Sales of 719.3 billion KRW, Operating Profit of 324.4 billion KRW
Surpassing 2 trillion KRW in Sales by Q3
Krafton is setting new records for quarterly performance. As the global success of ‘Battlegrounds’ continues, the company broke its highest quarterly revenue record again in the third quarter.
On the 7th, Krafton announced that it recorded consolidated revenue of 719.3 billion KRW and operating profit of 324.4 billion KRW in the third quarter of this year. Compared to the same period last year, revenue increased by 59.7% and operating profit grew by 71.4%. In particular, revenue rose by 1.7% compared to the second quarter, setting a new record for the highest quarterly revenue ever.
The cumulative revenue up to the third quarter of this year reached 2.0922 trillion KRW, surpassing 2 trillion KRW for the first time since the company’s founding. Cumulative operating profit also set a new record at 967 billion KRW.
Operating expenses totaled 394.9 billion KRW, up 51.3% from the same period last year. Among the expenses, labor costs accounted for the largest portion at 133.1 billion KRW, increasing 30.1% compared to the third quarter of last year, followed by application (app) fees and cost of sales at 101.1 billion KRW, which rose 68.6%. Other expenses included commission fees of 80.4 billion KRW, marketing costs of 29.9 billion KRW, and stock compensation expenses of 14.5 billion KRW.
Net income for the period decreased by 42.6% year-on-year to 121.4 billion KRW due to non-operating losses caused by exchange rate fluctuations.
Krafton’s franchise IP, Battlegrounds, drove the strong performance. Both PC and mobile versions continued their upward trend. PC game revenue was 274.3 billion KRW, and mobile game revenue was 425.4 billion KRW, growing 126.1% and 37.6% respectively compared to the same period last year.
Baedonggeun, Krafton’s Chief Financial Officer (CFO), said during the conference call immediately after the earnings announcement, “Various services based on the Battlegrounds IP are showing remarkable growth in all areas including revenue and traffic. Also, AI technology developed through steady investment and research has entered the implementation stage and is ready to be officially introduced through several services including inZOI.”
Krafton plans to strengthen its position in the global market by actively discovering creative game IPs through its ‘Scale-up the Creative’ strategy. Under this strategy, new titles such as inZOI, DARK AND DARKER MOBILE, Subnautica 2, Project ARC, and Dinkum Together are being prepared.
The CFO specifically mentioned the new title ‘inZOI’, saying, “We confirmed positive reactions and high expectations from Western users through Gamescom. After showcasing it at G-Star next week, it is scheduled to be released on March 28.”
He added, “The cumulative YouTube views have reached 203 million, and the character studio Canvas, which was launched in line with Gamescom, has secured over 200,000 user creations and 730,000 subscribers. We will continue to improve development completeness until the release date.”
In the Indian market, Krafton plans to continue expanding new users and discovering localized content for Battlegrounds Mobile India (BGMI). BGMI is increasing accessibility for Indian users through additional language expansions beyond Hindi and hosting large-scale esports tournaments, thereby continuously expanding local traffic. Krafton is also strengthening its business portfolio in India through local publishing and plans to release a localized version of Cookie Run in India within the year in collaboration with Devsisters.
The CFO said, “The India-specialized ‘Cookie Run’ will start pre-registration from mid-November with a goal to release within the year. Cookie Run is expected to receive positive responses because it is not difficult, intuitive, and runs smoothly on low-spec devices. We expect to accumulate user experience in genres different from battle royale through Cookie Run.”
This year, Krafton is focusing on applying its accumulated AI technology to actual games. Notably, inZOI became the first in the gaming industry to introduce 3D printer technology, receiving positive responses from users worldwide. The company also plans to provide a new level of gaming experience through chatbot functions based on Small Language Models (SLM) and motion generation technology.
The company recognized the potential of AI early on and has been steadily researching through various projects. In 2022, it established the Deep Learning Headquarters and secured various core AI technologies including natural language processing (NLP), vision & animation, speech recognition (STT·TTS), and reinforcement learning (RL). As a result, it has published numerous papers in world-renowned AI conferences such as NeurIPS, ACL, and COLT.
Lee Gangwook, head of Krafton’s Deep Learning Headquarters, explained, “Unlike large language models (LLM), SLM can run on gamer clients, significantly reducing costs. Since AI operates directly on the client without going through the network, it guarantees fast responses and can be used even in offline games.”
The CFO attracted attention by revealing that it was not himself but Krafton’s TTS (Text-to-Speech) AI that delivered the earnings announcement. He said, “At the beginning of this year’s earnings announcement, it was not CEO Kim Changhan but Krafton’s developed TTS that made the presentation. Today’s announcement was also made by Krafton’s TTS. Of course, the Q&A was conducted by the actual attendees.”
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