Pixel P&L: PUBG's Creator is Betting its Future on User-Generated Content

Krafton's latest earnings call revealed the gaming giant enjoyed a staggering 47% profit jump while plotting to transform its aging shooter into the next great user-generated platform. In today’s Pixel P&L we decipher the company’s latest earnings call.

Also in today's email: 

• VALORANT Challengers South Asia tournament records over 10M views but shows room for growth in the region.

• Russia seizes former Wargaming studio on controversial "extremist" claims.

• Esports World Cup launches musical identity initiative with Abbey Road Studios collaboration.

• Nexon reportedly securing rights to publish Overwatch Mobile and develop a new StarCraft game.

Krafton Reports Record Q1 Profit, Plans PUBG Expansion and New Games

South Korean video game maker Krafton reported a 47% jump in first-quarter operating profit on Tuesday, driven by its PUBG franchise and early success of new title Inzoi. Operating profit rose to 457.3 billion won ($320.1 million) for the January-March quarter, while revenue increased 31% to 874.2 billion won ($612 million), both record highs since the company's founding.

The mobile gaming segment was Krafton's largest revenue source at 532.4 billion won ($372.7 million), up 32% year-on-year, while PC platform revenue rose 33% to 323.5 billion won ($226.5 million). Console revenue reached 13.1 billion won ($9.17 million), increasing 14% year-on-year.

The company said it is developing PUBG 2.0, which will transform the eight-year-old battle royale game into a broader platform with user-generated content and Unreal Engine 5 updates planned for rollout beginning in the second half of 2025.

Inzoi, Krafton's new single-player game released in early access on March 28, sold one million copies in its first week, with 95% of sales coming from markets outside Korea.

India remains a key growth market, with Battlegrounds Mobile India (BGMI) seeing increased monetization through local partnerships with brands like Mahindra. Krafton also highlighted its acquisition of Nautilus Mobile, developer of Real Cricket, to strengthen its position in the Indian market.

The company outlined several titles in development, including Project Black Budget, an extraction shooter entering open beta this year, and Project Valor, a console battle royale game. Subnautica 2, sequel to an underwater survival game, is also preparing for early access launch within 2025.

Krafton said it has approximately 30 titles in development or publishing pipeline, part of a five-year strategy targeting 7 trillion won ($4.9 billion) in revenue by 2029.

"We are placing our effort behind securing teams with original creativity from around the world," Krafton's CFO said, adding that expansion involves attracting development teams and strategic investments through M&A activity.

⚡Quick Bytes

VALORANT Challengers South Asia 2025: Split 1 Records Over 10M Views

VALORANT Challengers South Asia 2025: Split 1 generated modest engagement metrics according to Escharts, with 10 million total views and 25,974 peak concurrent viewers during its March 4-21 run. The tournament accumulated 347,051 hours watched, reflecting a developing but not yet mature viewership market for VALORANT esports in South Asia. Tournament organizers will aim to build upon these metrics when Split 2 launches on May 16, 2025.

Russia Seizes Former Wargaming Studio on 'Extremist' Claims

Russia's government has seized Lesta Studios, the former Moscow-based subsidiary of World of Tanks creator Wargaming. Court documents obtained by RIA reveal the takeover occurred April 17, citing "extremist activities" and Wargaming's support for Ukraine following Russia's 2022 invasion. In a statement to VGC, Wargaming maintains that it completely divested from Russian markets three years ago. Lesta Studios is challenging the decision.

Esports World Cup Launches Musical Identity Initiative

The Esports World Cup Foundation has unveiled "Music of EWC," creating an original soundscape for its 2025 competition in Riyadh. The initiative includes tracks recorded at Abbey Road Studios and an open competition on Audiotool for global music creators. The seven-week, $70 million prize pool event runs July 7-August 24, funded by Saudi Arabia's Public Investment Fund.

Nexon to Publish Overwatch Mobile, New StarCraft Game

Nexon has reportedly secured rights to publish Blizzard's Overwatch Mobile in Korea and Japan, while also gaining development rights for a new StarCraft title. According to MTN, Blizzard packaged these opportunities together in negotiations with Korean game companies. Industry reports suggest the StarCraft project may be an open-world shooter, following previous cancelled attempts at expanding the franchise.

⚔️Side Quest

📺 Watch: Discover how Steam's Chinese version forces ID verification, censors blood green, and bizarrely doubles as a dating app!

🎮 Play: Prince of Persia: The Lost Crown bends time itself in this stunning metroidvania where fluid combat meets mythological Persian wonders, letting you journey through ingeniously designed levels while manipulating the fabric of reality to overcome ancient curses in the most thrilling platformer you'll play this year!

📚 Read: How the games industry is 'deprofessionalizing' as major studios crumble while indie developers earn millions, revealing both the collapse of traditional gaming careers and the unexpected opportunities emerging from the rubble.

💡Did You Know

Joseph D. Kucan, who portrayed the iconic villain Kane in the Command & Conquer series, holds the Guinness World Record for "longest recurring actor in any video game franchise" – but he was never supposed to be an actor at all!

Originally hired as Westwood Studios' FMV (Full Motion Video) director, Kucan was simply testing a new video compression technique when he stepped in front of the camera for a test shot as a one-time villain. The executives were so impressed by his commanding performance that the character of Kane was born, launching one of gaming's most memorable antagonists and a career spanning decades of Command & Conquer titles.

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