Why Krafton Made a Significant Investment in India

The introduction of PUBG Mobile, which was later redeveloped into Battlegrounds Mobile India after being banned by the government, marked a significant turning point for India's gaming industry. BGMI, one of the country's most popular games, is managed by Krafton India, the Korean publisher's subsidiary dedicated to this region, and continues to drive the company's strategy in the area. During the India Game Developer Conference, I had the opportunity to speak with Krafton India CEO Sean Sohn, who is also responsible for operations in the Middle East and North Africa and previously worked at the company's headquarters. Our conversation explored how the PUBG firm approaches the Indian market, the opportunities that lie ahead, and how India fits into Krafton's global strategy. The interview has been edited for brevity and clarity. What is the significance of the Indian market for Krafton? It has been three and a half years since we began operations in India. Our primary product is BGMI, which is exclusive to India and has replaced PUBG Mobile, accounting for over 95% of our revenue in the country. We also have a corporate development team that has invested approximately $170 million in India's startup ecosystem, including gaming, esports, and digital content platforms. In terms of global revenue, India accounts for around 10%. While it is not as large as markets like Korea, China, or the US, the Indian market is growing at a double-digit rate, whereas the global gaming market, particularly in more mature markets, is growing at a slower rate of 3-4% per year. Compared to other global gaming companies, we have made a significant investment in the Indian market and have a sizable team based in Bangalore. What have been the most important lessons you've learned since establishing a presence in India? One of the key lessons we've learned is that India still needs to develop a more diverse taste for games. While shooter games like BGMI are extremely popular, as are card games and traditional board games like Ludo and Rummy, other genres such as strategy, MOBA, and sports are still smaller compared to the global market. We've launched new strategy games and invested in a sports game company called Nautilus Mobile, but it's not very large. Therefore, it's essential to be patient and bring something specific to the local taste; otherwise, the return on investment might not be as good as in other, larger markets. How do you create games that effectively target the Indian market? We are fortunate to have a successful game like BGMI, which can sustain our team and provide the financial resources to bring more titles to the market. Having a local team on the ground is crucial. It's a challenge to determine whether you have sufficient revenue to justify investing in a team or allocating time to manage the market, but we have a solid foundation, and we can try to expand our offerings. How has your approach to BGMI differed from PUBG Mobile? The core gameplay remains the same, but we've introduced safeguards to address concerns about gaming in general and shooter games like BGMI. We've also made the game more localized to make players feel more comfortable. For example, we've changed the term 'Kills' to 'Finishers,' removed blood effects, and added a warning before each match. There are also age restrictions, time limits for younger players, and BGMI players can only be matched with other users in India. BGMI has been credited with driving a shift in India, encouraging players to spend less time on real-money games and more on midcore titles. We've seen several India-developed rivals to BGMI emerge. What makes midcore games popular, and how can companies capitalize on this trend? Indian gamers have a sophisticated demand for high-quality gaming content, but there are not many local game developers who can meet this demand. While some Indian gaming studios produce good games, they might not be sufficient or large enough to cater to local demands. Indian gamers still prefer to play global games, but global game companies often don't pay enough attention to local tastes. We believe that having a local team and conducting differentiated marketing for consumers is essential. Although midcore games are gaining popularity, other genres like sports and racing games are also performing well. Why is Krafton investing heavily in emerging markets like India? Emerging gaming markets like India, Latin America, and Southeast Asia are becoming more significant in terms of economy and have distinct cultural and economic backgrounds compared to mature gaming markets. India and other emerging markets can demonstrate different trends in the gaming industry. We aim to create a model case for emerging markets that can be applied to other regions, allowing Krafton to expand its global presence. Currently, our key core markets are North America, China, and Korea, but other markets are also growing. How does Krafton's acquisition of studios like Tango Gameworks benefit regional operations like Krafton India? Acquiring good studios that can create new IPs is a significant advantage for Krafton. Tango Gameworks has shown potential, and their acquisition will strengthen our capacity for generating new IPs. We also have projects that involve converting IPs from PC and console to mobile, which has big potential. How does India factor into Krafton's M&A strategy? In India, there are a few good studios, but they are either self-sufficient or have been acquired by larger European companies. We are continuously looking for opportunities to support early-stage companies with our incubation program or equity investments. Krafton recently signed a deal with Pocketpair to bring Palworld to mobile. Given the popularity of anime and Japanese media in India, do you expect Palworld to perform well in the country? Yes, I believe it will. While Pokémon might not be as popular in India as it is in other countries, the concept of virtual pets has universal appeal. If we can successfully transfer Palworld to a mobile platform, customized for mobile gameplay, it will likely be well-received.