Krafton Sets Record First-Half Results Driven by PUBG and Subnautica 2 Success (Comprehensive)

'Subnautica 2' Sells 5 Million Copies in Just 22 Days

First-Half Operating Profit Reaches 92% of Last Year’s Annual Result

Treasury Shares Worth 100 Billion Won to Be Acquired and Retired in Q3

Krafton set a new record for the highest-ever half-yearly performance based on consolidated preliminary earnings for the first half of this year, with sales reaching 2.6616 trillion won and operating profit at 972.5 billion won. The strong numbers were propelled by the success of its leading IPs, 'PUBG: Battlegrounds' and 'Subnautica 2'.

Subnautica 2. Provided by Krafton

On July 29, Krafton announced that its sales had increased by 73.3% and operating profit by 38.3% year-on-year. Notably, the operating profit for the first half already accounts for 92% of last year’s annual total. Looking at just the second quarter, sales reached 1.2902 trillion won and operating profit was 410.9 billion won, both marking the best quarterly results to date.

Krafton explained that the first-half sales of PUBG intellectual property (IP) franchises rose by 25% year-on-year, further boosted by the success of 'Subnautica 2', resulting in record sales. Launched in early access in May, 'Subnautica 2' sold over five million copies within just 22 days. Sales attributed to the 'Subnautica' IP in the first half amounted to 232.5 billion won.

Breaking down the earnings by business segment, mobile posted the highest sales at 1.1537 trillion won, followed by PC at 924.2 billion won, others at 546 billion won, and console at 37.7 billion won. Krafton highlighted that PC platform sales surpassed 500 billion won for the first time, which was attributed not only to 'PUBG: Battlegrounds' but also to 'Eve Contender' (developed in collaboration with Stellar Blade), 'Black Market', and 'Subnautica 2' achieving strong responses. The console platform also benefited from the success of 'Subnautica 2', with console sales in the second quarter increasing by 143% year-on-year.

However, Krafton reported that net profit for the second quarter shifted from 15.5 billion won last year to a net loss of 29.9 billion won this year, attributing the decline to a temporary rise in expenses.

During the earnings call, Krafton CFO Bae Dongkeun said, "Operating expenses related to Unknown Worlds resulted in a non-operating loss of 316.7 billion won in the second quarter." Krafton recently settled a lawsuit in a U.S. court regarding earn-outs (conditional performance-based payments) promised to executives at the time of the Unknown Worlds acquisition. The company explained that costs were incurred as these earn-outs were paid during the settlement process.

Provided by Krafton

Krafton plans to continue broadening the PUBG IP franchise's collaborations into areas such as automobiles, K-pop, and now global animation, in addition to consistently introducing highly polished new game modes. The company previously confirmed that new modes such as Genopoint and Payday on the PC platform led to user engagement and sales growth, underscoring the value of content competitiveness.

On mobile, Krafton will further expand its already established user-generated content (UGC) ecosystem. Since the introduction of 'World of Wonder' in 2023, user-created maps and participation in gameplay on PUBG Mobile have continued to increase. Krafton plans to enhance creation tools and expand UGC by leveraging global IPs such as Naruto and Spider-Man. The company is also widening opportunities for in-app purchases and creator rewards through a new in-game currency called Woo Tokens. With these measures, it aims to establish a virtuous cycle where growth in the creator base leads to more content and gameplay.

The 'Subnautica' IP will also be developed into a franchise. For now, Krafton will ensure a stable service for 'Subnautica 2,' which was rated 'Very Positive' on Steam and is among the world's top-selling releases of the year, until its official launch. Krafton CEO Kim Changhan said about the 'Subnautica 2' development plan, "Although we cannot confirm the official release timeline, we plan to expand the fan base through content updates over the next two years. 'Subnautica 1' sold more than twelve million copies, and it turns out that half of the current 'Subnautica 2' users did not play the first installment."

The company plans to unveil five new titles scheduled for release by next year at the world's largest game show, Gamescom 2026, set to take place next month in Germany. Krafton will present a new PUBG IP-based project for the first time and reveal projects such as 'NO LAW,' 'Project Zeta,' 'Age Twister,' and 'Tara: Unbound,' initiating full-scale market validation for next-generation franchise IPs.

Krafton Corporate Image (CI). Provided by Krafton

Additionally, CEO Kim emphasized Krafton's leading artificial intelligence (AI) capabilities in Korea, stating, "We are expanding our reach by developing multimodal large language models (LLMs) for use in both games and physical AI." He added, "It is becoming evident that game development companies are well-positioned for world model development—an area gaining attention for physical AI since early this year—and we are seeking external investment to fuel further growth."

Meanwhile, in the first half of the year, Krafton acquired treasury shares worth 300 billion won and completed a 99.6 billion won capital reduction dividend. By combining newly acquired and previously held shares, the company retired treasury shares worth 336.2 billion won and has decided to retire additional treasury shares acquired in the second quarter. The total value of treasury shares scheduled for cancellation is 431.5 billion won. Furthermore, Krafton plans to acquire another 100 billion won worth of treasury shares in the third quarter and retire them all. The company remains committed to faithfully executing its shareholder return policy, reinforcing its strong will to enhance shareholder value going forward.

This content was produced with the assistance of AI translation services.