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Crafton, the brand behind the world’s most popular video games, said it has invested $100 million in the South Asian country, which it launched two years ago in the Indian market, and is preparing to launch several new titles in the country.
The four-year-old South Korean company, which went public last year, rose to fame with its shooter game Unknown’s Battlegrounds – commonly known as PUBG. The title PUBG Mobile has gathered more than 50 million monthly active users in India, becoming the most popular mobile game in the country, until New Delhi placed it on the list of apps that ordered its ban over national security concerns.
Unlike most of the organizations on the block list, Crafton has managed to launch a new title in India – called Battlegrounds Mobile India. The game, which was released in India in July last year, shares many similarities with PUBG Mobile, although the developer claims to have made several changes to address local concerns.
In November, Crafton introduced PUBG: New State as a new game based on the same last-man-standing game called Battle Royale among players, available on BGMI and PUBG Mobile. That new offering was rebranded in January as a new state of mobile — as a strategy to avoid getting into trouble for the problems previously raised in the PUBG title.
In a wide-ranging interview with TechCrunch, Crafton India CEO Shen Hyunl Son said the new state mobile did not grow as fast as BGMI and its retention was not as strong. In addition, BGMI complies with environmental regulations in India, where the company employs about three dozen people, 70% of whom manage the printing business.
The company has a lot in store for the country, including investments in local startups.
Krafton’s investments in India so far
- $22.5 million in Nodwin game by March 2021
- 9 million dollars per loco in June 2021
- Multiplying 48 million dollars in July
- 6.5 million dollars in December 2021 in Frnd
- 5.4 million dollars in Nautilus Mobile in February 2022
- 7 million dollars by Kuku FM in March 2022
- An undisclosed amount of investment in Lila Games in March 2022
Crafton India Team (Image Credits: Crafton India)
Excerpts from the interview below have been edited.
How much did Crafton get out of its announced $100 million investment in India in 2020?
We have reached our target and raised $100 million from our initial investment plan. We are working on two to three deals that will help us invest about $140 million in August. In the last one or one and a half years, there have been about eight investments in total. We will continue to invest in gaming, gaming-related and technology startups in the country. In the year By 2022, we can invest a total of $100 million or more in the Indian market. We are investing from our account even though we have not set up a fund for the Indian market. We were a profitable company, especially following the IPO, and we have $2.5 billion on our balance sheet. We are investing in different markets, and India is part of this global investment strategy. However, in India, we have a slightly wider scope as the market is growing rapidly with several promising industries.
What key factors do you consider when making an investment decision in India?
The product and the location of the company is the main concern. He must work in gaming, gaming-related or in the media and entertainment sector or in the digital space – these are the three pillars we focus on. For example, Nodwin and Loco are not game studios, but part of the gaming ecosystem we want. Pratilipi and Kuku FM are not related to gaming but they host interesting and original ideas or content for users. Other companies we have invested in include Nautilus Mobile and Lila Games, both India-based game developers. We are also interested in original IPs created in India.
So you’re not limited to companies making things that align with Crafton’s goals or complement your games?
We want to be more than a game company. Basically we want to bring gaming-based experiences, but we want people to enjoy content and enjoy it on different platforms. We have pilot projects in development, which are new projects and not really games. We have some fringe projects based on Web 3 where creators can work and experiment with our platform and tools. This season is at a very new level.
Are these malicious projects aimed at gamers or content creators?
We must understand that these platforms are suitable for professional creators or young people who are just starting to create. If you look at games like Minecraft, it can be used there, and the level of development can be very different. It may expand in the future, but we haven’t seen it yet.
We see many startups in the Metaverse space in India. But many of them use “metaverse”, “NFT” and “web 3” as buzzwords in their audio notes – perhaps to attract investors or to achieve short-term success in the market. How do you see that trend?
Crafton has a few investments, and we just announced one for Web 3 in India. We are in the process of closing other small investments. Outside of India we have invested in Web 3 but in other markets they have again been small investments. We need to learn more to see what works and what doesn’t, and we want to be part of this experiment, which is why we invested a small amount. Having NFT elements in a game doesn’t necessarily make it fun. It should develop an enjoyable experience for players. While it’s possible to explore new gameplay elements, we’re still seeing this develop and not keeping development as our main focus. Web 3 alone cannot make a fun game, so one must know how to make a good game and incorporate the technology to maximize the gaming experience.
What are the key things you look for in a founder and team before signing the deal?
We have been investing in game studios for the past 10-12 years. In the beginning there was only one studio – Bluehole, but now we have eight to nine game studios. Not all were successes, but we learned from them all. We believe in our potential as a team, and we want to share our collective experience to achieve more successes. While investing in India, we look at the team’s previous experience and time spent in game development. There are few companies in India who have made games and made good money to maintain their team. We work on local strengths, for example, Nautilus Mobile and the cricket sports games developed by them. While they are not yet globally popular, we feel that with funding and support we can drive further growth.
You talked about the new games you plan to introduce in India. Are those from the battle royale genre or are they based on another format?
We have prepared various games on India. We can bring one of the games that started in Germany to the country with the environment. Our studios RisingWings and Dreamotion are developing games that could be suitable for the Indian market. Similarly, Striking Distance, a subsidiary of Crafton, is making PC games, which may be relevant to Indian consumers but not as big as BGMI.
Sean Hyunil Sohn, CEO, Crafton India (Image Credits: Crafton India)
What was the total time and money spent on BGMI?
As a company we do not announce specific KPI numbers for India. The game was very successful last year, and registration and income have been constantly improving. We recently announced the number of registered users on BGMI which has crossed 100 million users.
What was your greatest season in the game so far?
BGMI is a free to play game. We want to keep the game alive as much as possible, so we introduce new content, updates and in-game features to keep the game fresh. Some Royal Passes work better than others. The most recent was an Egyptian theme called Isles of Skye, which was great.
Can you share some details about Crafton’s investment in Leela Games?
Leela Games has three founders, two from the US and one from India. The creative director and CEO are from the US but their engineering talent is local. We believe that this combination of global and local learning can lead to a successful career. They have been making cricket matches for the last seven-eight years. And then they showed some good parameters. Interestingly, they are making shooter games – maybe battle royale games – for casual users. That can be an interesting approach.
How can you make sure that Lila Games isn’t working on something that could potentially cause a conflict of interest because it’s working on something that belongs to the Battle Royale category?
The gaming market in India is a big place, and unless something very similar is done with BGMI, it is not a conflict of interest. We see new, better quality products growing as an added thrill to the market. Also, given that the target audience is different, we don’t see any conflicts yet.
Aneesh Aravind, who was leading the BGMI team, left Crafton in February. Who is leading the team now?
Aneesh left a few months ago, although all other team members are still with Crafton. Minu Lee is Head of Publishing for BGMI at Crafton. He supported the local team to launch BGMI in India and knows every aspect of the game and the team. Currently, Mini acts as a bridge between international and local groups and can help launch new products and games in the country.
What is the status of New State Mobile in India?
New State Mobile is not as big as BGMI. In its initial launch, it had huge numbers, but its retention is not as strong as BGMI’s. However, we will continue to add new content to New State Mobile. India may not be the main target of New State Mobile due to hardware limitations, but it has great graphics, and we will continue to serve the game.
Some reports claim that parents have lost millions of rupees when their children made in-app purchases on BGMI using their credit and debit cards. Some reports also state that some people have been killed due to excessive addiction to the game. These issues eventually led to the banning of PUBG Mobile in India. So how is Crafton dealing with all these issues at this point?
Crafton has launched a ‘Responsible Gaming’ campaign, and we are the only major gaming company in India to take these steps. We have game time limits, spending limits and login protections built into the game. The game is extremely popular, and these issues come with the territory. We don’t know the details of the fraud and how it was committed, but these are serious matters. We are constantly working to provide users with a safe gaming experience.
Months after the government banned PUBG Mobile, there were some concerns about how Crafton got a license for BGMI, as both games have a lot in common. A lawmaker also questioned in Parliament last week whether PUBG Mobile would make a comeback in India. How do you respond to these concerns?
The government doesn’t interfere with which apps can work and which can’t. They address digital security and privacy issues, and BGMI complies with all guidelines. MEIT (Ministry of Electronics and Information Technology) also observed that PUBG and BGMI are different games. We understand that the government is concerned about players’ playing habits and that is where BGMI has put safeguards in place.
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