Krafton belatedly realises making every game PUBG-related may not be a great strategy

Krafton, the South Korean mega-publisher that owns PUBG: Battlegrounds and most recently released The Callisto Protocol, has published a strategy note about 2023 (spotted by Eurogamer) that's based on a talk livestreamed to its employees.

The company says the key items were "sustainable growth" and expanding publishing operations globally, which it helpfully summarises as "more games, new publish[ing] strategies."

"We remain steadfast in our ultimate vision to secure and expand powerful game-based IPs," said CH Kim, Krafton CEO. "To achieve this, now is the time to concentrate our capabilities in 2023 and emphasize our need to innovate and focus organizational capabilities, strengthen our publishing capabilities and systems, and continue investing in the future."

The important bit being games: Krafton is clearly not happy with how few games it has been publishing and how quickly, and slightly mixes its metaphors in vowing that it will be "nurturing a robust and compelling pipeline of new games." It's going to have an internal restructuring as well as stepping up efforts to work with second parties (ie, publishing other companies' games), and is actively looking for external developers to invest in.

It's hard not to see this in the context of one recent story, and a wider theme of the last few years. First of all The Callisto Protocol underperformed Krafton's rather excessive projections, by 'only' selling two million rather than five million, and showed that big bets don't always come off. Krafton only published one other game last year, Moonbreaker, which is not going to make up that kind of shortfall, so it wants a broader slate with more games.

The wider theme here is that Krafton has also bet enormously big on the PUBG brand and, following its IPO in 2021, made a core part of its strategy "expanding media and platforms centered on the PUBG IP." The Callisto Protocol, almost unbelievably, began as a PUBG game, while there's PUBG Mobile and New State Mobile (originally released as PUBG: New State), but the simple fact remains that this particular game and setting has never seemed an especially good fit for any kind of extended universe of spinoffs: With the greatest of respect to PUBG, Lord of the Rings it ain't.

It seems like the suits at Krafton are beginning to come to the same realisation. "While PUBG will continue to be a major priority for Krafton, the company’s efforts in 2023 [will be] to develop a deeper catalogue of titles." That does seem wise, and Krafton's already got non-PUBG stuff on the way, like an extremely expensive-looking game based on popular Korean novel The Bird That Drinks Tears.

More worryingly, Krafto has drunk the web3 Kool-Aid. It will be continuing to invest in "web3 and deep learning" technology which it believes will reshape gaming (no doubt noting that PUBG creator Brendan Greene is considering using the blockchain in his next game). "Growth in these areas cannot be guaranteed without investment," said Kim, "and it is worth advancing into these technology verticals as they are closely related to game production technology, which is one of Krafton’s core competencies."

You'd hope that game production would be a core competency of a game production company, but I digress. No-one can doubt the enormous and ongoing success of PUBG but, beyond a direct sequel, the game never seemed a good fit for the kind of ambitions Krafton had for it.