PUBG developer bets big on AI and global gaming domination

Krafton Inc., the creator of PUBG: Battlegrounds, is planning to invest more than 200 billion won ($136 million) this year into more than a dozen game studios. It’s the latest step in a push to become a global publishing powerhouse.

According to a Bloomberg report, CEO Kim Changhan said that South Korean gaming giants are broadening their lineup of original content and continuing some of their years of work in artificial intelligence. Since Kim took over, the company’s AI team has hired 80 engineers and is looking to add another 35 this year.

The 50-year-old engineer and executive, Kim, said, “We have ambitious plans to scale our business.”

He said Krafton has spent about $680 million in the past two years investing in minority stakes in game studios and startups in Texas and Tokyo.

The company’s shares in Seol have soared over 70% since the start of 2024 after it reached record-breaking revenue in the first nine months of the year.

Also a partner of Tencent Holdings Ltd, it produces and operates one of the world’s most successful gaming franchises and derives almost all its income from outside of Korea. In the third quarter, the company achieved an operating margin of 45%.

Krafton’s future is built on AI

Krafton and Nvidia Corp. revealed a new AI feature for making non-player characters (NPCs) more realistic at CES in Las Vegas last week. Known as a “co-play character,” NPCs will change the way they behave depending on a player’s attributes and situation.

The feature, based on Nvidia’s small language model, will launch in Krafton’s Inzoi life simulation game in early access form for PC in March.

Krafton is trying to bring similar AI features to the PUBG franchise. While the game can be playable on systems without advanced graphics cards that can accommodate AI, Krafton is still working to avoid any pesky compromises.

The PUBG developer plans to expand in India

Both Kim and Krafton founder Chang Byung-gyu, graduates of two of Korea’s best schools of engineering, said they have increased investments in India.

PUBG was banned from the country in 2020, and Krafton stepped in to take over publishing responsibilities. The game returned in 2023.

Now, the PUBG developer has 100+ people dedicated to growing its business in India.

More than 1,000 gaming studios have been evaluated and met with Krafton. It has acquired EF Games, based in Madrid; Tango Gameworks, located in Japan; Ruckus Games, located in Texas; Wolf Haus Games, located in Montreal; and Day 4 Night Studios, based in the United States.

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