Korea National Pension Service sells its Krafton shares

Key information

• The Korean National Pension Service sold part of its Krafton shares due to concerns about the company’s future growth.
• Krafton’s over-reliance on PUBG for revenue raises questions about its ability to generate new revenue streams.
• Krafton must diversify by successfully launching new games in order to ensure its long-term sustainability in the highly competitive video game market.

The National Pension Service of Korea (NPS) recently sold a significant portion of its Krafton shares, reducing its stake from 7.1 percent to 6.1 percent. The transaction, worth around 110 billion won (72.6 million euros), comes as the market speculates about Krafton’s future growth prospects. Although Krafton posted record revenue and operating profit in 2022, driven primarily by the continued success of PUBG: Battlegrounds, concerns persist over its over-reliance on this single title.

Concerns About Over-Reliance

Krafton’s stock price has fallen since its IPO in 2021, suggesting that investors may be questioning the company’s ability to generate new revenue streams beyond PUBG. The lack of a clear successor title capable of matching PUBG’s success is seen as a potential risk factor for Krafton’s long-term valuation.

Analysts stress need for diversification

Analysts emphasize the importance for Krafton to develop and launch new successful games in order to ensure sustainable growth. The company announced plans to release 12 new titles over the next two years, including Subnautica 2 and Palworld Mobile. However, the market will closely monitor these releases to determine whether they will effectively diversify Krafton’s revenue streams and consolidate its position in the highly competitive video game sector.

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