Krafton Reports Decline in Annual Sales and Profit

Krafton has released its earnings report for the fourth quarter and the full year, revealing a decline in overall performance for 2023, along with mixed results for the fourth quarter, including the company's first quarterly net loss since its initial public offering in 2021. The key figures include: full-year sales of KRW1.85 trillion ($1.47 billion), representing a 1.7% year-on-year decrease; full-year profit of KRW500 billion ($397 million), down 3.8% year-on-year; fourth-quarter sales of KRW474 billion ($376 million), up 6.8% year-on-year; and a fourth-quarter loss of KRW165 billion ($131 million), compared to a profit of KRW6.24 billion ($4.95 million) in the same quarter of the previous year. In 2023, Krafton expanded its portfolio beyond PUBG, venturing into new genres and platforms, notably with the launch of The Callisto Protocol, a AAA console and PC horror title. During a post-earnings conference call, Krafton CEO CH Kim acknowledged that the company's expansion efforts had not yielded the expected results but still saw value in the experience. Kim stated, 'Although the outcome of these challenges fell short of market expectations, it left behind core values for Krafton.' He mentioned that the company currently has nine studios worldwide working on their own titles, and while they had previously been granted autonomy, Krafton HQ would take on a more active role in production management going forward. This shift is intended to ensure that customer expectations are met, without stifling the creativity of the development teams. Kim also discussed several upcoming titles, including a new Subnautica installment, an adaptation of The Bird that Drinks Tears, Project BlackBudget, an open-world extraction shooter, and Project GoldRush, an action-adventure sandbox game. Additionally, he announced a new open-world user-generated content platform, leveraging AI and machine learning technology, which will enable creators to monetize their work. The platform is expected to begin testing in the first half of the year and launch by the end of 2023. In a correction, Kim noted that The Callisto Protocol's sales volume was in line with market expectations, or slightly higher.