[Edaily Reporter An Yu-ri ] Krafton ( KRAFTON(259960)) is expanding its in-house developed large language model (LLM), “Raon,” into an artificial intelligence (AI) model specialized not only for games but also for future new business ventures. While acknowledging the nature of the AI business, which requires long-term investment, the company plans to seek business opportunities that can generate revenue quickly. It is also accelerating the platformization of its flagship title, “PUBG: Battlegrounds,” and the expansion of new intellectual property (IP).

Kim Chang-han, CEO of KRAFTON, stated during the third-quarter earnings call on the 10th, “KRAFTON is securing self-sustaining capabilities in AI based on the model development expertise we’ve accumulated by developing ‘Raon’ entirely in-house from scratch.”

The company’s proprietary large language model (LLM), “Raon 1 Mini Preview,” unveiled on the 22nd of last month, is a model that prioritizes Korean language processing and inference efficiency. The company explained that it recorded the fastest token generation speed compared to other domestic models in its class.

CEO Kim stated, “For games, we developed a specialized model that incorporates the unique grammar of games—which existing AI struggles to fully understand—from the very beginning of the training process,” adding, “We will also continue to strengthen our capability to develop domain-specific specialized models necessary for future new businesses by applying the same training pipeline to each field.” The plan is to enhance the competitiveness of game AI while expanding the scope of technology utilization through specialized models tailored to various fields required for non-gaming businesses.

He also outlined future plans for AI model development. CEO Kim said, “Starting with this, we will expand our lineup to include ‘Raon 1,’ a scaled-up model, and a full-duplex voice model capable of listening to users and responding naturally at the same time.”

However, as the models are still in the preview stage, the company plans to continue refining their performance in actual service by incorporating user feedback.

During the conference call, a question was raised regarding when the returns on AI investments would begin to appear in the company’s financial results. CEO Kim responded, “We are well aware of concerns that the return cycle for AI investments is likely to become longer.”

He continued, “While there are certain businesses where we invest with a long-term perspective, we are prioritizing businesses—even if they are small—that can generate tangible revenue more quickly.”

The overall strategy for the AI business will be disclosed at a later date. CEO Kim added, “We are currently finalizing KRAFTON’s overall AI business strategy internally and plan to make an official announcement at a later opportunity.”

PUBG IP, Approaching Its 10th Anniversary, Expands into UGC and Shinhung Markets

The expansion of the PUBG franchise continues. On PC, “PUBG Playgrounds,” a feature allowing players to discover and enjoy a variety of user-generated content (UGC), was introduced last August. On mobile, external content was added to the UGC mode “World of Wonders.” The strategy is to expand the battle royale game into a platform that supports diverse playstyles.

The IP is also expanding beyond gaming. CEO Kim stated, “Through the Netflix series announced on October 30, we will expand into media and grow the IP into one that is loved by even more fans.”

The company is also targeting users in Shinhung with “PUBG Mobile Flash” and “BGMI Air,” which reduce storage space and data usage requirements. It plans to unveil a major content update next year to mark the 10th anniversary of PUBG’s launch.

Additionally, Subnautica 2 has sold over 5 million copies cumulatively since its Early Access launch on May 15 and maintains a 91% positive rating on Steam. The game is preparing for its official release following the Early Access 2.0 update scheduled for the end of the year. “DED . NET,” a Western console shooter based on the PUBG IP, is slated for release in 2027.

KRAFTON posted its best-ever financial results on a cumulative basis through the third quarter of this year. KRAFTON’s revenue for the first through third quarters totaled 3.633 trillion won, and operating profit reached 1.1975 trillion won, representing year-over-year increases of 51% and 14%, respectively. However, third-quarter revenue alone was 971.4 billion won, and operating profit was 225 billion won, marking a 36% year-over-year decline in operating profit. This reflected marketing and production costs associated with the company’s participation in Gamescom. Non-operating losses of 305.8 billion won, driven by foreign exchange losses resulting from the weak U.S. dollar, led to a net loss of 68.4 billion won for the period.

The company is also expanding its shareholder returns. KRAFTON’s board of directors decided to acquire an additional 300 billion won worth of treasury stock and cancel the entire amount. Bae Dong-geun, Chief Financial Officer (CFO), stated, “KRAFTON believes the current stock price is undervalued, so the board decided to acquire an additional 300 billion won worth of treasury stock and cancel the entire amount.” The total shareholder returns for this year, including previously executed measures and the additional plan, amount to 917.2 billion won.