Krafton Inc., the South Korean company behind the global phenomenon PUBG: Battlegrounds, is making a significant investment in its future. The company plans to spend over $136 million in 2025 to bolster its publishing capabilities and expand its portfolio of original content. This aggressive strategy underscores Krafton’s ambition to become a leading force in the global gaming industry.
Krafton Inc., the developer of PUBG: Battlegrounds, is investing heavily in AI and game studio acquisitions.
CEO Kim Changhan, in a recent interview, outlined Krafton’s two-pronged approach: developing original content and investing heavily in artificial intelligence. Over the past two years, Krafton has already invested approximately $680 million in acquiring and taking minority stakes in various game studios and startups worldwide, from Texas to Tokyo. This year’s planned investment of over 200 billion won represents a continuation of this strategy, focusing on over a dozen promising game studios.
Krafton’s commitment to AI is evident in its dedicated team of 80 deep learning and AI engineers, with plans to add 35 more this year. This focus on cutting-edge technology is already bearing fruit. At CES 2025 in Las Vegas, Krafton partnered with Nvidia Corp. to showcase a new AI technology for creating more realistic non-player characters (NPCs). These “co-play” characters, powered by Nvidia’s small language model, are designed to possess internal logic and react dynamically to player choices and in-game situations. This innovative technology will debut in Krafton’s upcoming life simulation game, Inzoi, scheduled for early access on PC in March.
Krafton is developing AI-powered "co-play" characters for its upcoming game, Inzoi.
Krafton intends to integrate similar AI features into the PUBG franchise. However, the company is proceeding cautiously, ensuring that these enhancements remain accessible to players without high-performance, AI-ready graphics cards. This commitment to inclusivity reflects Krafton’s dedication to its broad player base.
Beyond technological innovation, Krafton is also strategically expanding its global presence. Following the 2020 ban of the Tencent-distributed PUBG Mobile in India, Krafton took over direct publishing responsibilities. The game’s subsequent return in 2023 has led to significant investment in the Indian market, with over 100 staff dedicated to growing operations there.
Krafton’s proactive approach to identifying potential investment opportunities is noteworthy. Over the past two years, the company has evaluated over 1,000 gaming studios, a testament to its commitment to growth and innovation. Recent acquisitions include EF Games in Madrid and Tango Gameworks in Japan, further solidifying Krafton’s international footprint. Strategic stakes in studios like Ruckus Games in Texas, Wolf Haus Games in Montreal, and Day 4 Night Studios in the US demonstrate Krafton’s diverse investment portfolio.
Krafton’s ambitious investment strategy, coupled with its commitment to AI and global expansion, positions the company for continued success in the dynamic gaming industry. The company’s impressive financial performance, with shares up over 70% since the start of 2024 and a 45% operating margin in the third quarter, further underscores its strong position in the market. Krafton’s forward-thinking approach, combining strategic acquisitions with technological innovation, solidifies its position as a key player to watch in the global gaming landscape.
