Date & Time: Tuesday, November 10, 2026, 16:00
Attendees: Changhan Kim (CEO), Dongkeun Bae (CFO)
Agenda: Q3 2026 Financial Results and Future Strategy
■ Summary of KRAFTON Q3 2026 Financial Results and Business Overview
▣ Q3 2026 Revenue Summary
- Revenue: 971.4 billion won (+11.6% YoY, -24.7% QoQ)
↳ PC Q3: 238.9 billion won (-32.5% YoY, -57.4% QoQ)
↳ Mobile: 504.3 billion won (+3.2% YoY, +11.8% QoQ)
↳ Console: 8.6 billion won (-15.9% YoY, -64.0% QoQ)
- Operating profit: 225.0 billion won (-35.5% YoY, -45.2% QoQ)
↳ Decreased due to drop in PC revenue
- Net loss: 68.4 billion won (Turned to deficit YoY, continued deficit QoQ)
↳ Non-operating loss due to exchange rate impact
▣ Q3 2026 Expense Summary
- Operating expenses: 746.4 billion won (+43.0% YoY, -15.1% QoQ)
↳ Increased 43% YoY due to ADK impact; decreased 15.1% QoQ due to lower commissions paid
▣ Q3 2026 Achievements and Strategic Direction
- PUBG Franchise
↳ Continued platformization of gameplay in Q3, strengthening growth foundations
↳ Achieved record-high cumulative revenue through Q3
↳ Plans to expand user base in Q4 by broadening cultural content and enhancing mobile accessibility, specifically strengthening accessibility for mobile users in emerging markets through a low-spec PUBG service
↳ Netflix TV series production confirmed
- Subnautica
↳ Focusing on the successful official launch of Subnautica 2
↳ Enhancing game polish toward full launch through major EA 2.0 update
↳ Jointly exploring IP expansion opportunities both inside and outside the game
- PUBG: DED.NET
↳ Delivering a new PUBG experience for Western console shooter fans
↳ Targeting console shooter players to broaden user base across platforms and regions
↳ Confirmed potential via 2026 tests; focusing on gameplay refinement and community snowballing
- Raon: KRAFTON's Proprietary LLM
↳ Securing AI self-reliance through independent development capabilities
↳ Model development capabilities supporting games and future new business ventures
↳ Strengthening competitiveness starting with Raon-1 mini preview, achieving top-tier performance among domestic models of the same class
■ Q&A Session
Are there any plans being prepared for PUBG's 10th anniversary?
Dongkeun Bae, CFO = As 2027 marks the 10th anniversary of PUBG, we are preparing our largest-ever lineup of content. We are also planning major content in March to mark the 10th anniversary of launch. Basically, starting next year, major collaborations as well as seasonal events and collabs, both large and small, will continue almost every month. We want to make it a year to celebrate the 10th anniversary together with players.
What specific competitive edges does the Raon-1 mini preview have?
Changhan Kim, CEO = It is the first model released by KRAFTON that was developed from scratch. Because it is our first release, we unveiled a relatively smaller model. Raon-1 achieved top-tier benchmark scores across most domains among domestic models in its class. Based on feedback received during the preview phase, we are currently preparing to release the official full version of Raon-1 mini rather than keeping it as a preview.
We created the Raon LLM because, through developing AI for games, we assessed that our accumulated capabilities reached top-tier domestic research levels. Starting this year, as part of our efforts to expand AI business domains beyond gaming, we began building our own models. We are building models that excel in Korean and feature optimized inference costs, resulting in lower costs and faster speeds.
Going forward, we are building capabilities to create and supply low-cost, specialized models to meet the demand for various LLMs within Korea. While the initial model released is small-scale, the subsequent Raon-1 models will be larger models that we plan to unveil.
Is there a possibility that the scale of shareholder returns will be adjusted in the future?
Dongkeun Bae, CFO = The core objective of the new shareholder return policy announced early this year was to heighten predictability for market participants and build market trust. The execution appears rapid this year because we judged our stock price level to be in a significantly undervalued range, so we executed it first for consistency in policy execution to enhance shareholder value. The 700 billion won treasury stock figure we mentioned was not a cap, but a minimum floor. Moving forward, additional treasury stock repurchases and cancellations will be flexibly decided based on a comprehensive consideration of market conditions, stock price levels, and strategic priorities.
Is there a specific strategy regarding ADK?
Dongkeun Bae, CFO = Regarding ADK's top line, ADK's animation business is performing inline and even exceeding expectations, but the advertising business is currently underperforming relative to original plans. Fundamentally, part of this is due to the traditional advertising market contracting in Japan, and it is taking longer than expected for KRAFTON, a Korean company, to align and build mutual understanding after acquiring a legacy Japanese advertising agency. However, we are organizing our problem awareness and solutions internally. Once that is settled, we expect to share more detailed plans and transformed direction early next year.
Is growth possible for second-half combined revenue compared to the same period last year?
Dongkeun Bae, CFO = On an annual basis including Q4, we naturally expect multi-digit growth. Traffic has recovered to a healthy state, and while the number of content releases in Q3 was slightly lower than previous years, we expect solid performance in Q4 as there is a substantial amount of planned content. While Q4 is important, next year marks the 10th anniversary of PUBG, so we are preparing content for Q4 and early next year with that in mind. Fundamentally, our goal remains continuous growth, and we believe we can achieve it.
What is the approximate timing of game launches next year, and which title is expected to make the largest financial contribution?
Changhan Kim, CEO = In addition to the five titles shown at Gamescom, next year's launch lineup includes inZOI's official full release and PlayStation version, with Palworld Mobile and Waltz and Jam also scheduled for release next year. Based on responses during Gamescom, the titles with strong player reactions were PUBG: DED.NET and NO LAW. Since post-launch momentum is crucial, timings may shift, making it difficult to give exact release dates at this moment.
When will ongoing investments begin monetization, and what are the key milestones for investment recovery?
Changhan Kim, CEO = We are well aware of concerns that the return cycle on AI investments could be prolonged. While we take a long-term approach for certain businesses, we are striving to focus on initiatives that can generate tangible revenue quickly, even if modest at first. As for KRAFTON's overall AI business strategy, internal alignment is taking shape, and we plan to announce it officially on another occasion.
