KRAFTON FY2024 Q4 Earnings Release

FY2024 & 4Q24 Earnings Results
February 11, 2025

Financial statements included in this document are consolidated results of KRAFTON, Inc. (the “Company”) and its subsidiariesand have been prepared in
accordance with K -IFRS.
Financial results and operational performance included herein have been prepared for investors’ convenience only and have not been audited by an
independent auditor; as such, certain part (s) of this presentation are subject to change, upon completion of the audit revie w.
Company makes no representations as to the accuracy or completeness of the information herein, nor does the Company assume any d uty to update any
information, given that this presentation has been prepared based on currently available data.
Company shall not have any liability for any loss arising from any use of this presentation or its contents or otherwise arising in connection with this
presentation, as this should not be construed to be related to any investment decision making and shall not be used for any l egal proceedings.
Disclaimer

The next 5 years of krafton:
Franchise IP
CEO CH Kim

4
Part 1.The growth and future of PUBG IP Franchise
4

5
Looking Back on 2024
Value of PUBG IP Franchise Proven through Stable Growth and Sustainability
Key Achievements of 2024 2024 Message Recap: PUBG IP
• Strengthening SustainableService for Stepwise Growth
– Continuous service enhancement and content updates
– Long-term service of BGMI as India’s national game
• Evolving to $10B IP 1) through investments in Franchise IP
– Realigning the organization around the PUBG IP Franchise
– Transition of PUBG PC as a gameplay platform
– Multi-Product strategy expanding into Console & Mobile
• Annual Growth Across All Core Services
– Record -high PUBG PC revenue since 2018, Steam Platinum for 8 consecutive years 2)
– Annual growth for Mobile, BGMI achieving record -high traffic and revenue
• Establishing the foundation for PUBG IP Franchise growth
– Close collaboration across the Franchise Teams and external partners
– Experiments and productions for PUBG PC gameplay platforms
– Three new games under development after Project Black Budget
1) Gross Revenue across all PUBG IP Franchise titles (USD 10 Billion)
2) G ames to achieve Steam Platinum for 8 consecutive years (2017~2024) in revenue and traffic: PUBG, CS:GO, DOTA2 5

6
Localized Content and Marketing Campaigns
Growth Drivers of PUBG PC
Growth through Continuous Updates and Enhanced Premium Content after F2P 1)
Value-centered Premium Content
Collaboration -driven Cultural Experiences
Proactive Community Care
Expanding beyond In- game Content to Deliver Comprehensive Service
Driving Traffic and Revenue Growth Through Structural Changes and Rigorous Execution
6 1) Free-to -Play transition on January 12 th, 2022

7
Direction of PUBG IP Franchise
Investing in Content and Services for a Broader Fan Experience
Committing to Bold Investments as an IP Holder to Build a Beloved Evergreen Franchise
Providing Enjoyable Experiences for Fans Across PUBG PC, Console, and Mobile
Evolving PUBG PC as a gameplay platform
Creating a sustainable service ecosystem to engage fans for over a decade,
Delivering fresh gameplay experiences aligned with PUBG IP’s core value
Investing and Sharing Content for Core Services 1)
&
Collaboration
(Music, Car, Fashion, etc.)
Core-content
(Map, Mode, etc.)
Making strategic investments to share across the Franchise,
Delivering cultural experiences beyond gaming and high -quality core content
Targeting Updates Sequentially from Late 2025
Gameplay
platform PUBG Pc
Core Enhancement (UE5 Updates)
Gameplay Diversification (Well -made Modes)
Community Engagement (UGC Beta Service)
1) PUBG PC/Console, PUBGM, BGMI 7

8
Direction of PUBG IP Franchise
Developing New Titles to Attract Potential Fans Across Multiple Platforms and Generations
Focusing on Core Gameplay Validation and Team Building with a Long -term Perspective
Black Budget
Inheriting PUBG’s iconic gunplay
Immersive experience of Extraction
PC
Extraction Shooter
18+ 1)
Blin dspot (ARC)
Fresh tactical shooter experience
Expanding the PUBG Universe
PC
Top -down Tactical Shooter
15+
Valor
Action experience for console fans
with PUBG’s core competence
Console
Battle Royale
18+
Unannounced Project
Experimenting reduced violence and
explicitness aimed for the next generation
Mobile
Hybrid Casual
12+
8 1) Target age group

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Part 2. New growth drivers
9

10
Progress and Developments
Implementing ‘Scale-up the Creative’ Strategy and Redefining Long -term Growth
2024 Message Recap: Scale -up the Creative
• Evolving from ‘Original Creative’ to ‘Scale- up the Creative’
• Seeking Various Expansion Opportunities and
Restructuring Internal Execution Processes
• Sustainability of Existing IP + Stepwise Growth of New IP
• Ongoing Development of New Titles
– inZOI, Dark & Darker Mobile, Subnautica2, etc.
• Discovery New Creatives to Scale- up
– Tango Gameworks , Palworld Mobile
• Redefining Strategy for Long -term Growth
Key Achievements of 2024
10

11
Growth Drivers of KRAFTON
Securing Big Franchise IP: Large-Scale Investments for More Attempts
11

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Potential IP for Investment
Resource Allocation Focused on Four Areas for Securing Franchise IP
“ Penetrating New Markets and Outperforming Successful
Conventional Titles to Secure Market Dominance ”
“ Expanding Beyond Genres and Discovering
New Opportunities in Games Through Originality”
Marketability-Driven Original Creative-Driven
Emerging
Long -term growth in an area without an ‘Ultimate Game’
Infant market with high potentials
Genre Champions
Becoming an ‘Ultimate Game’ in markets various in size Delivering deep gameplay to a loyal fanbase
Challengers
Aiming next-gen leadership with unique gameplayMature market dominated by successful titles
Pioneers
Creating unprecedented original gameplay
Pioneering new genres and gameplay experiences
12

13
Strategic Direction
13
Step-by -Step Assessment and Optimized Resource Allocation for Franchise IP
Concept/
Prototype Vertical Slice Production Launching
C
H AL
L
E
N G E
1PP
2PP
Revenue Active User
Increase in Production & Publishing, while Enhancing Quality and Management System
Secure Additional Production Leadership + Enhance Management System + Specialized Studio Production Capabilities
Development Costs 1) Increase to KRW 300bn/Year
for the Next 5 Years
Self Production: Increase in Quantity and Quality Publishing:
Increased Volume of New Titles
1) Development costs will include personnel, outsourcing, rent, and other related costs

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Strategic Titles for 2025
• Publishing rights of the original game (Dinkum)
transferred to KRAFTON in Feb 2025, official
launch on PC/Nintendo Switch within 2025
• Spin-off title Dinkum Together to be launched in 2026
• Frontier life simulation inspired by the
Australian Outback
• The solo -developed original game sold 1M+
copies in Early Access with English support only
• PC Early Access in March 2025
• Differentiating from traditional games with
realistic graphics and advanced simulation
• SLM 1)- based ‘Smart Zoi’ beta in partnership
with NVIDIA to be revealed during Early Access
• Early Access on PC and Xbox Game Pass in 2025
• Expanding the series with co -op gameplay and
enhanced deep -sea exploration
• 5.5M+ trailer views on official YT channel, and
ranked #8 most Wishlistedon Steam (Feb 5 th)
• Soft Launch for US/Canada in February 2025
• Extraction RPG combining the elements of
battle royale, dungeon crawler, and RPG
• Aim to popularize Extraction RPG genre
through gameplay, graphics, optimization
targeted for the global market
Genre
Platform Life Simulation
PC/Console
Genre
PlatformExtraction RPG
Mobile Genre

Platform Underwater Survival Adventure
PC/Console
Genre

Platform Frontier Life Simulation
Multi -platform
The All -out Challenges to Secure Big Franchise IP
1) SLM: Small Language Model 14

15
Deep Learning
1) CPC (Co-Playable Character): An AI companion that interacts with users, equipped with the ability to interact and cooperate w ith users, and respond to game situations in a human-like manner
Advancement in Technology through Joint R&D with NVIDIA
CPC 1)
Technology
X
New
Gameplay
Discovering New Gameplay through CPC, Investmentto Drive Game Innovations
PUBG IP Franchise: PUBG Ally inZOI: Smart Zoi
Smart Zoi is a CPC simulation technology allowing
interaction between Zoisand to form a society
Realistic life simulation experience through
autonomous Zoi actions and relationship -building
→ Released during Early Access in March 2025 PUBG Ally applies CPC technology to make
decisions and strategically cooperate with players
Customized game experience by providing immersive gameplay and team dynamics
→ Considering Application in PUBG IP Franchise
15

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India
Sustaining Long-term Growth and Business Expansion of BGMI
Broadening BGMI Userbase through Content Updates and Localized Strategies
Expanding Publishing Titles for Games with High Potential in India
Continued Investment and Exploring New Opportunities
16

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Conclusion
Aggressive Investment in Production to Secure Key Big Franchise
IPs
Targeting KRW 7tn Revenue & 2X Corporate Value within 5 Years
through Long -term Stepwise Growth
17

FY2024 & 4Q24
Financial Performance
CFO Dongkeun Bae

2024
Results
at a
Glance
Revenue KRW 2.7 tn
Operating
Profit
5-Year CAGR
5 Year Compound Annual Growth Rate (2019 –2024)
Revenue 20%
Record -high Revenue and 41.8% YoY Growth
driven by Strong PUBG IP Performance
Exceeding Annual OP of KRW 1 trillion and
54.0% YoY Growth due to Strong Revenue Growth
5 Year Revenue CAGR of 20% through Various
Initiatives for Sustainable Growth of PUBG IP
KRW 1.2 tn
19

17.6%22.2%30.7%
33.5%
36.4%
264.9 398.5
465.0 583.9 941.9
29.5 19.6 104.1
55.7 44.3
2020
2021202220232024
PC 콘솔
1,670.4 1,885.4
1,854.0 1,910.6
2,709.8
2020
2021202220232024
167.1 243.7
191.3 274.3
232.6
342.7
402.3
499.9 425.4
362.2
17.4 11.5
8.8
11.8
12.3
7.4 8.5
7.0
7.8
10.5
4Q23 1Q242Q243Q244Q24
PC 모바일 콘솔 기타
Revenue Breakdown
(KRW bn) 4Q 20233Q 20244Q 2024 QoQYoYFY2023FY2024 YoY
Revenue
534.6 719.3 617.6 – 14.1% 15.5% 1,910.6 2,709.8 41.8%
PC 167.1274.3232.6-15.2% 39.2%
583.9 941.9 61.3%
Mobile 342.7425.4362.2-14.8% 5.7%
1,244.8 1,689.8 35.7%
Console
17.4 11.8 12.3 3.8% – 29.4% 55.7 44.3 -20.4%
Others
7.4 7.8 10.5 34.2% 41.8% 26.2 33.8 28.8%
Revenue
Quarterly Revenue Breakdown (Platform)
2024 KRW 2,709.8bn (YoY 41.8%↑)
PC/Console Combined Revenue Proportion (Annual)
20
534.6 665.9
719.3
707.0
617.6
4Q24 KRW 617.6bn (QoQ 14.1%↓, YoY 15.5%↑)
Revenue (Annual)
(KRW bn)
(KRW bn) (KRW
bn)
294.4 418.1 639.6
569.1
986.2

773.9 650.6 751.6
768.0
1,182.5
2020
2021202220232024
164.3 310.5
332.1
324.4 215.5
4Q23 1Q242Q243Q244Q24
370.2
355.4 374.9 394.9 402.1
4Q23
1Q242Q243Q244Q24
Operating Expenses & Profit
Operating Expenses
Operating Profit (Quarterly)
2024 KRW 1,527.3bn (YoY 33.7%↑)
(KRW bn) 4Q 20233Q 20244Q 2024 QoQYoY 20232024 YoY
Operating Costs
370.2 394.9 402.1 1.8% 8.6% 1,142.6 1,527.3 33.7%
Personnel
120.9 133.1 132.7 – 0.3% 9.7% 427.3 516.8 20.9%
Platform fees/Cost of Revenue
1) 87.9 101.1 84.8 – 16.0% -3.5% 226.8 349.3 54.0%
Paid Commissions
61.9 80.4 97.9 21.7% 58.1% 258.9 316.1 22.1%
Marketing
34.2 29.9 37.9 26.7% 10.6% 66.1 101.4 53.6%
Share -based Payment Expenses
28.3 14.5 10.5 -27.2% -62.7% 27.6 102.4 270.5%
Others
37.0 35.9 38.3 6.7% 3.5% 135.9 141.3 4.0%
Operating Profit
164.3 324.4 215.5 – 33.6% 31.1% 768.0 1,182.5 54.0%
% Margin 30.7% 45.1% 34.9% -10.2%p 4.2%p 40.2% 43.6% 3.4%p
Adj. EBITDA 2) 219.7 365.4 253.4 – 30.6% 15.4% 903.7 1,391.3 54.0%
% Margin 41.1% 50.8% 41.0% -9.8%p -0.1%p 47.3% 51.3% 4.0%p
Operating Profit (Annual)
1) Platform fees / Cost of Revenue consist of Steam, market commissions, etc
2) Adj. EBITDA = EBITDA + Share -based payment expenses
Operating Profit
21
Operating Expenses (Quarterly)
(KRW bn) (KRW
bn)
(KRW bn)
4Q24 KRW 402.1bn (QoQ 1.8%↑, YoY 8.6%↑)
2024 KRW 1,182.5bn (YoY 54.0%↑)
4Q24 KRW 215.5bn (QoQ 33.6%↓, YoY 31.1%↑)

556.3 519.9 500.2 594.1
1,302.6
2020
2021202220232024
(13.2)348.6
341.4
121.4
491.2
4Q23 1Q24 2Q243Q24 4Q24
26.3 465.3
458.1
196.7
602.6
4Q23 1Q242Q243Q244Q24
Net Profit
Net Profit
Net Profit (Quarterly)
2024 KRW 1,302.6bn (YoY 119.3%↑)
(KRW bn) 4Q 20233Q 20244Q 2024 QoQYoY 20232024 YoY
Non -Operating Profit
(138.0) (127.7) 387.1 T/P 1 ) T/P 1) 60.6 540.2 791.8%
Non -Operating Income
190.6 (21.5) 417.3 T/P 1 ) 119.0% 521.0 729.6 40.0%
Other Income
182.8 (28.3) 409.9 T/P 1 ) 124.2% 483.5 697.1 44.2%
Finance Income
7.8 6.8 7.4 9.2% – 4.1% 37.5 32.5 -13.3%
Non -Operating Expense
328.6 106.2 30.2 -71.5% -90.8% 460.4 189.4 -58.9%
Other Expenses
326.3 103.9 27.8 – 73.2% -91.5% 451.5 180.0 -60.1%
Finance Expenses
2.3 2.3 2.4 0.7% 1.3% 8.9 9.4 5.9%
Profit Before Income Tax
26.3 196.7 602.6 206.3% 2,193.1% 828.6 1,722.7 107.9%
Income Tax
39.5 75.3 111.4 47.8% 181.9% 234.5 420.1 79.1%
Net Profit
(13.2) 121.4 491.2 304.7% T/P 1 ) 594.1 1,302.6 119.3%
% Margin -2.5% 16.9% 79.5% 62.6%p n/m 31.1% 48.1% 17.0%p
Net Profit (Annual)
22
Profit Before Tax (Quarterly)
(KRW bn)
(KRW bn) (KRW bn)
4Q24 KRW 491.2bn (QoQ 304.7% ↑, YoY T/P 1 ))
1) T/P: Turned to Profit

23
CEO
김창한
CFO
배동근
CH Kim Dongkeun Bae