Highlights
- KRAFTON's nine-month financial performance reaches record levels despite declining quarterly profitability.
- PUBG's expanding ecosystem and new IPs signal a broader shift in the company's gaming strategy.
- KRAFTON's AI ambitions, shareholder returns, and India operations bring further scrutiny.
KRAFTON reported record revenue and operating profit for the first nine months of 2026, despite a 35.5% year-over-year (YoY) decline in third-quarter (Q3) operating profit. The South Korean publisher generated ₩971.4B (~$726M USD) in Q3 revenue, up 11.6%.
However, operating profit stood at ₩225B (~$168.3M), reflecting higher quarterly costs.
Between January and September, consolidated revenue reached ₩3.633T (~$2.7B), increasing 50.9% YoY. Operating profit rose 13.8% to ₩1.1975T (~$896M), already exceeding the company's full-year 2025 operating profit by 14%.
All figures are based on preliminary K-IFRS consolidated financial statements.
KRAFTON’s Q3 Revenue Breakdown
Mobile remained the largest revenue contributor, while PC sales declined. The quarterly breakdown was:
- Mobile: ₩504.3B (~$377.3M), up 3.2%.
- PC: ₩238.9B (~$178.7M), down 32.5%.
- Console: ₩8.6B (~$6.4M), down 15.9%.
- Others: ₩219.6B (~$164.3M), up 1,117.8%, including ₩198.4B (~$148.4M) from ADK Group's advertising and content operations.
Mobile revenue also increased 12% quarter-over-quarter (QoQ), supported by Naruto and Ferrari collaborations during the summer holiday period.
On PC and console, PUBG: BATTLEGROUNDS maintained double-digit monthly active user growth. Its September collaboration with JUJUTSU KAISEN received a positive player response. KRAFTON also attributed some Q3 expenses to its participation in Gamescom and other activities.
PUBG UGC and New IPs Drive Expansion
KRAFTON is developing the PUBG franchise through user-generated content (UGC).
Following its PC introduction in December 2025, PUBG: Playgrounds launched in August 2026. The company also expanded global IP content in World of Wonder (WOW) on mobile and introduced UGC monetization.
Its Q4 plans include:
- An IVE collaboration, featuring the South Korean K-pop girl group, running since November across in-game and real-world experiences.
- BGMI Air, a lightweight version for emerging markets, which crossed 14M pre-registrations ahead of its Dec 10 release.
- The franchise's largest content update for PUBG's 10th anniversary in 2027.
Meanwhile, Subnautica 2 has surpassed 5M cumulative worldwide sales, holds a 91% positive Steam review rating, and has accumulated 4.45M wishlists. KRAFTON plans an Early Access 2.0 update by year-end and is exploring expansion opportunities for the franchise inside and outside gaming.
Another PUBG-based project, PUBG: DED.NET, targets console shooter audiences in Western markets. Combining PUBG's gunplay with roguelite progression, the title completed a closed beta test in October and is scheduled for 2027.
AI Investments, Buybacks, and Market Allegations
On Oct 21, KRAFTON introduced the Raon-1 mini preview, its internally developed large language model.
The company reported competitive performance among Korean models in its class across response speed, Korean-language capabilities, and inference efficiency. It plans to develop the larger Raon-1 and a full-duplex speech model, applying its game-focused AI expertise to projects such as PUBG Ally and other business areas.
KRAFTON also continued its shareholder return program:
- Approximately ₩400B (~$299.3M) in treasury shares acquired through Q3.
- ₩99.6B (~$74.5M) distributed through a capital-reduction dividend.
- ₩517.6B (~$387.3M) in treasury shares canceled, including previously held shares worth ₩117.7B (~$88.1M). This represented 4.4% of issued shares.
- An additional ₩300B (~$224.5M) buyback was approved on Nov 3, with all acquired shares scheduled for cancellation.
The additional program takes planned 2026 shareholder returns to ₩917.2B (~$686.2M), the highest annual amount since the program began in 2023. KRAFTON indicated it would continue evaluating returns based on business performance, market conditions, and financial capacity.
Despite its record financial performance and expanding ambitions, KRAFTON continues to face allegations of using paid PR campaigns to undermine Garena's Free Fire India following its launch in the Indian market. These claims raise broader questions about whether KRAFTON India is contributing to a competitive gaming and esports ecosystem or attempting to consolidate its market position by undermining rival publishers and games.
