Krafton is expected to achieve a sharp improvement in results in the second quarter this year. PUBG: Battlegrounds on PC has maintained growth through new modes and intellectual property collaborations. Subnautica 2, released in early access in May, also gained traction faster than expected.

According to financial data firm F&Guide on July 14, Krafton's second-quarter consolidated consensus is revenue of 1.19 trillion won and operating profit of 367.1 billion won. The figures are forecast to rise 80.2 percent and 49.2 percent, respectively, from a year earlier.

Drivers of the improvement include Subnautica 2 initial sales exceeding earlier expectations and PUBG PC traffic and revenue keeping a steady trend.

PUBG and Subnautica 2 rose together

Brokerages cite PUBG PC growth as the first factor behind the second-quarter improvement. In the quarter, Krafton introduced collaboration modes with Genopoint and Payday and carried out collaborations with external IP including Stella Blade and Harley-Davidson. It also ran monetisation content such as resale of aespa items and a Black Market update.

According to Daol Investment & Securities, PUBG's average Steam sales ranking in the second quarter rose to 7th from 10th a year earlier. KB Securities tallied average daily concurrent users on Steam at 792,680 in the quarter, up about 60,000 from a year earlier and about 110,000 from the previous quarter. New modes are also assessed positively because they did not eat into time spent in the existing battle royale and instead created additional demand. That analysis says a strategy to expand PUBG from a battle royale-focused title into a game platform with diverse ways to play is leading to higher traffic and revenue.

Yoo Sung-man (유성만), an analyst at Leading Investment & Securities, evaluated that well-made modes and user-generated content updates are a key variable in expanding PUBG from a battle royale-focused game into a shooting-based game platform. He said Genopoint is being confirmed as adding separate demand rather than encroaching on existing users' play time.

Ahn Jae-min (안재민), an analyst at NH Investment & Securities, also said PUBG's revenue growth continued in the second quarter after the first quarter and strong sales of Subnautica 2 released in May were positive. He forecast second-quarter operating profit would exceed the market consensus.

Subnautica 2 also appears to have driven the second-quarter increase. It sold more than 4 million copies within 5 days of its May 15 early-access release, and Krafton said cumulative sales surpassed 5 million as of early June. Brokerages estimated its second-quarter revenue contribution at about 198.0 billion won to 230.0 billion won. Mirae Asset Securities expected sales of 5.1 million copies and revenue of 230.0 billion won, while KB Securities estimated about 5 million copies and 225.0 billion won. Kyobo Securities put the revenue contribution at 215.0 billion won.

The early success of Subnautica 2 is significant in that it showed the possibility that Krafton can generate meaningful revenue from IP other than PUBG. PUBG has accounted for a high share of the company's total revenue, and new-title performance and IP diversification have been cited as key tasks. Lee Ji-eun (이지은), an analyst at KB Securities, analysed that Subnautica 2's success was a factor that drove the second-quarter results above the consensus.

Krafton and Unknown Worlds are running Subnautica 2 under an open development approach that reflects user feedback in the development process. On July 9, they carried out the first update, adding a new biome mode and exploration content and improving co-op play and base-management convenience.

Costs rise amid top-line growth; lawsuit uncertainty cleared

Based on the forecasts, the second-quarter operating margin is around 30 percent. Operating profit growth of 49.2 percent coming in below revenue growth of 80.2 percent largely reflects changes in the revenue and cost mix after ADK, which runs advertising and content businesses, was consolidated.

Jung Ho-yoon (정호윤), an analyst at Korea Investment & Securities, said he judged there were no major unusual items aside from cost increases from the ADK consolidation. Daol Investment & Securities estimated second-quarter operating costs at 880.9 billion won, up 111.8 percent from a year earlier and up 8.8 percent from the previous quarter. It said rising platform fees differ in nature from a general increase in fixed costs because they are linked to strong Subnautica 2 sales.

The mobile segment is expected to be affected by a seasonal off-peak. Daol Investment & Securities estimated mobile revenue at 459.7 billion won. That would be up 7.5 percent from a year earlier but down 34.6 percent from the previous quarter. It said revenue trends held for China's Peace Elite, global PUBG Mobile and India's Battlegrounds Mobile India, but base effects reflected that the first quarter was the biggest peak season of the year.

A lawsuit that lasted about 1 year involving the former management of Subnautica 2 developer Unknown Worlds ended with a settlement between the parties, easing uncertainty. The former management had filed suit claiming Krafton wrongfully dismissed them to avoid paying a conditional performance-based payout worth $250 million related to Subnautica 2. The settlement terms and payout amount were not disclosed.

Lim Hee-seok (임희석), an analyst at Mirae Asset Securities, said it was positive that long-running uncertainty had been resolved. He evaluated that the early end to the lawsuit also reduced potential legal cost burdens.

The next hurdle is Gamescom

After the second-quarter earnings release, market attention is expected to shift to Gamescom 2026, to be held in Cologne, Germany from Aug. 26 to 30. Krafton will unveil 5 titles at the event, including an unannounced new title from PUBG Studios, as well as NO LAW, Project Zeta, Age Twister and Taray: Unbound. The PUBG Studios title is based on the PUBG IP but is being developed to provide a different game experience from the existing battle royale. The other works comprise an open-world FPS, a multi-team tactical arena, a co-op adventure and an action RPG. Krafton plans to detail its strategy to expand its new-title portfolio by showcasing in-house titles together with second-party publishing titles.

Lim Hee-seok said it is encouraging that PUBG growth is still continuing, but that releases of anticipated titles are needed for a re-rating. He pointed to the 5 new titles unveiled at Gamescom as a near-term point to watch.

Krafton's full-year consensus compiled by F&Guide is revenue of 4.85 trillion won and operating profit of 1.48 trillion won. The figures are forecast to rise 45.7 percent and 40.5 percent, respectively, from a year earlier. Krafton plans to apply additional well-made modes and large-scale user-generated content updates to PUBG PC in the second half as well.

Yoo Sung-man said that as a structure is forming in which PUBG handles cash generation and new titles lift valuation, game shows and test schedules in the second half will be a key checkpoint for IP diversification.