Krafton sees full-year sales, profit dip
In wake of disappointments, the Callisto Protocol publisher will impose more oversight over its development studios' work
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Krafton announced its fourth quarter and full-year earnings today, showing declines for 2023 overall and mixed results for the fourth quarter, including the company's first quarterly net loss since it began trading publicly in 2021.
The numbers
- Full-year sales: KRW1.85 trillion ($1.47 billion), down 1.7% year-on-year
- Full-year profit: KRW500 billion ($397 million), down 3.8% year-on-year
- Q4 sales: KRW474 billion ($376 million), up 6.8% year-on-year
- Q4 loss: KRW165 billion ($131 million), compared to a KRW6.24 billion ($4.95 million) profit in the year-ago quarter
Krafton's 2023 marked the beginning of a major push beyond PUBG for the publisher, with the company pushing into new genres and platforms, most notably with the arrival of its AAA console and PC horror title The Callisto Protocol.
In a post-earning conference call, Krafton CEO CH Kim did not specifically address The Callisto Protocol's reportedly disappointing performance in his prepared remarks, but acknowledged the company's expansion efforts hadn't gone as planned and still saw value in the experience.
"Although the outcome of these challenges fell short of market expectations, it left behind core values for Krafton," Kim said.
He noted that in addition to the PUBG studio, the company currently has nine studios working on their own titles around the world. And while they had been left to their own devices to this point, Kim suggested the parent company would take a more hands-on role going forward.
"Our philosophy had been to give creative studios their own autonomy in production until now, but to live up to customer expectations, we decided to strengthen Krafton HQ's production management role," he said.
"This does not alter our belief that new creative can only be borne from the aspiration of creators. It's just that HQ will take on the role of managing expectations as those of the creators and the customers may differ."
Kim also covered a slate of new titles Krafton has in the works, including a new installment in Unknown Worlds' Subnautica series, and the adaptation of The Bird that Drinks Tears that is underway at Krafton's new Montreal studio.
"AI transformation has truly begun and will change our work and life as we know it"CH Kim
In addition to those titles, Kim discussed the open-world extraction shooter Project BlackBudget (with a team made of core members from PUBG Studio) and Project GoldRush, a joint project from Krafton's Czech and Korean teams that will be an action-adventure sandbox game designed with seasonal updates in mind.
Finally, he talked about a new open-world user-generated content platform that will be set up to allow creators to earn money from their work and take advantage of new AI and machine learning technology.
"Deep learning is no longer at a demo or test lab stage," Kim said. "AI transformation has truly begun and will change our work and life as we know it.
Specific to the user-generated content project, he added, "Once AI becomes more widespread, it will become easy for a small group of developers or even a single person to create high quality games."
Krafton expects the user-generated content platform to begin testing in the first half of the year and launch by the end of 2023.
[Correction]: In a Q&A section at the end of the call, Kim said The Callisto Protocol sales volume was was "on par with market expectations," or marginally higher.