'PlayerUnknown's Battlegrounds' developer expands into India through market expansion
South Korean gaming giant Krafton, best known for the popular "PlayerUnknown's Battlegrounds" (PUBG), has been making strategic moves to expand its reach in India, a market with a rapidly growing gaming population.
In July, Krafton agreed to acquire Eleventh Hour Games, the US developer of the action role-playing game "Last Epoch", for $96 million. This move marks Krafton's latest investment in India, following its acquisition of India's cricket game developer Nautilus Mobile in March for $14 million.
India, with the world's largest youth population, has been witnessing a surge in the number of gamers. Last year alone, the number of gamers in India increased by 12% to 444 million. Nearly a third of these gamers spend money on games, according to market researcher Niko Partners.
PUBG: Battlegrounds, a "battle royale" game, has been one of the top-grossing games in India in recent years, attracting over 200 million users. Its popularity is largely responsible for Krafton's success in India.
However, Krafton is facing strong competition overseas, unlike in India where Chinese game companies have a lesser presence. To solidify its position in the Indian market, Krafton plans to invest at least $50 million annually.
Sean Sohn, Krafton's India head, mentioned that growth in China and the US is slowing for the company. He also highlighted developing another hit game as a key challenge for Krafton.
In addition to gaming, Krafton has also ventured into fintech. Earlier this year, Krafton led a $53 million funding round for Cashfree Payments, a fintech company based in India.
Krafton's sales in India account for about 10% of its record sales of Won1.5 trillion in the first half of this year. Despite its success, Krafton, like Spotify, the top streaming service in India, is yet to prove its ability to develop another hit game after Battlegrounds, according to Wi Jong-hyun, a business professor at Chung-Ang University in Seoul.
In June, Krafton agreed to buy Japan's advertising and animation group ADK for $516 million, further expanding its presence in Asia. With its latest acquisition of Eleventh Hour Games, Krafton is set to bring "Last Epoch" to the global market, adding another title to its growing portfolio.
As India's gaming market continues to grow, Krafton's strategic investments and focus on the Indian market signal its commitment to capitalise on this opportunity.
