South Korean gaming giant Krafton Inc., the creator behind the global phenomenon PlayerUnknown's Battlegrounds (PUBG), is charting an ambitious new course beyond its core gaming business. According to a recent report from South Korea's Kookmin Ilbo, the company is actively investigating the potential to transfer artificial intelligence systems developed within its virtual gaming environments into the realm of humanoid robotics. Krafton has framed this initiative as "physical AI," representing artificial intelligence capable of performing actions and making decisions in the physical world.
The company's strategic rationale hinges on the immense value of the data generated by in-game player interactions. Krafton asserts that this data constitutes a high-quality, rich training resource for developing sophisticated AI models. This exploration into robotics and advanced AI comes at a pivotal moment for South Korea's major game publishers, as they conclude their annual financial reporting and investors actively search for the next significant growth drivers to supplement their established, long-running franchises.
Financial Performance and Shareholder Returns
Krafton's financial results for 2025 underscore its current strength while highlighting areas of strategic investment. The company announced record annual revenue of 3.3266 trillion won, marking a substantial 22.8% year-over-year increase and crossing the 3 trillion won threshold for the first time. Operating profit for the period was reported at 1.0544 trillion won. However, net profit experienced a significant decline of 43.7%, settling at 733.7 billion won. Management attributed this drop partly to continued investment in the PUBG franchise and funding provided to external development studios.
In a major shift in capital allocation policy, Krafton's board has approved a comprehensive three-year shareholder return plan valued at over 1 trillion won (approximately $1 billion). This initiative, covering 2026 through 2028, will include the company's first-ever cash dividend alongside a substantial share buyback program. Chief Executive Kim Chang-han emphasized that this plan reflects the firm's robust commitment to enhancing shareholder value. Furthermore, the company intends to cancel the repurchased shares, thereby reducing the total share count and increasing ownership stakes for remaining investors.
Core Business and Future Pipeline
Despite its futuristic ambitions, Krafton's present financial engine remains firmly hit-driven and reliant on its flagship intellectual property. The company, alongside domestic rivals Nexon and Netmarble, continues to depend on long-running franchises to sustain cash flow. Revenue breakdown for 2025 showed mobile platforms contributing approximately 1.7 trillion won, PC gaming generating 1.2 trillion won, and console revenue at 42.8 billion won.
Analysts note that while PUBG provides a solid foundation, its capacity to drive further valuation growth is limited. The key to near-term success, according to Kim So-hye, an analyst at Hanwha Investment & Securities, lies in "clarifying" the launch timeline for the highly anticipated sequel, Subnautica 2. Krafton has confirmed that its development teams are actively working on a pipeline of 15 new games. To extend the lifecycle and profitability of PUBG, the company is executing a strategy to upgrade the game to Unreal Engine 5 and significantly expand user-generated content (UGC) capabilities.
The company's internal AI roadmap, as detailed in investor presentations, describes a dual-path approach. The immediate focus is "AI for Games," leveraging automation to overhaul internal development processes. The longer-term, more speculative vision is "Game for AI," where the AI expertise honed in virtual worlds is exported into new domains like humanoid robotics. Krafton is also scouting for mergers and acquisitions (M&A) opportunities to secure new franchise properties and fuel growth.
Market reaction to these announcements has been measured. Krafton's share price closed a recent trading session at 258,000 won, down 0.39%, following a 5.7% gain over the preceding five sessions. The robotics initiative is explicitly characterized as a long-term endeavor with no established product timeline. Consequently, investor focus in the immediate future is likely to remain fixed on concrete release dates and the commercial performance of the company's next wave of games, particularly Subnautica 2, rather than speculative valuations for non-gaming ventures. The core challenge persists: PUBG reliably funds operations, but sustainable, high-margin growth requires cultivating another blockbuster success.
