The game developer -KRAFTON, INC. ANNOUNCES RECORD REVENUE OF $405.7 MILLION FOR Q1 2022

The steady growth of PUBG IP and the continued success of PUBG MOBILE have helped drive growth as KRAFTON plans to release a new IP later in 2022.

KRAFTON, Inc.the South Korea-the creators of the game PUBG: BATTLEGROUNDS battle royale, today shared the preliminary announcement of their results for the first quarter of 2022. KRAFTON post US$405.7 million in quarterly revenue according to consolidated financial statements in accordance with Korea International Financial Reporting Standard (K-IFRS). This is a record quarterly turnover for KRAFTON, which increased 17.8% quarter-over-quarter and 13.5% year-over-year. See below for more details on the first quarter 2022 results:

SUMMARY OF Q1 2022 RESULTS DETAILS

Revenue: US$405.7 million (+17.8% quarter-on-quarter and +13.5% year-on-year)

Operating profit: US$241.9 million (+628% QOQ and +37% YoY)

Net profit: US$190.2 million

The surge in operating profit quarter over quarter and year over year was driven by the reduction of operating costs (e.g. marketing costs) and the elimination of one-time costs related to share compensation in 2021.

FACTORS THAT CONTRIBUTED TO QUARTERLY GROWTH

During the first quarter of 2022, the PUBG IP showed balanced growth across each platform. While a large number of former users returned to the game after PUBG: BATTLEGROUNDS transitioned to free-to-play (F2P) in January 2022, average monthly active users (MAUs) nearly tripled compared to the fourth quarter of 2021. The number of paid users more than doubled, contributing significantly to the increase in quarterly sales. As a result, sales of PUBG: BATTLEGROUNDS PC reached US$82.3 million, up 61% year-on-year. PUBG: BATTLEGROUNDS console sales increased 124% quarter-on-quarter and 274% year-on-year.

PUBG: MOBILE records a turnover of US$307.1 million during the first quarter of 2022, which increased by 30% over one quarter and 5% over one year. These increases were driven by a number of in-game IP collaborations and strong live service systems.

International markets (excluding South Korea) drove 95% of from Krafton Revenue for the 1st quarter of 2022. The company has contributed to the development of the local gaming industry by India by strategically investing in the country’s IT and media ecosystems. Accordingly, BATTLEGROUNDS MOBILE INDIA maintained an upward trend in market share and sales.

NEW GAMES AND EXPANDED ACTIVITIES IN 2022

KRAFTON is set to release new titles, such as the codenamed “Project M” and The Callisto Protocol this year. Unknown Worlds, the creators of the Subnautica series that KRAFTON acquired in 2021, create a new game, codenamed “Project M”, which is due for early access later this year. “Project M” is a very unique turn-based strategy game set in a sci-fi world. The Callisto Protocol, an original survival-horror developed by Studios within striking distanceAlso slated to launch in 2022. Additionally, internal project incubation teams developed games based on deep learning and conducted public testing on Steam.

In addition, the company has been working on strengthening the Web 3.0 business and establishing a joint venture with NAVER Z. A team consisting of members who are dedicated to NFT research and have experience in game R&D has designed a Sandbox editor tool that can be used to develop games and implement the metaverse. The team aims to perform an alpha test in the first quarter of 2023. Thus, KRAFTON plans to put considerable effort into building the Create to Earn (C2E) ecosystem.

BREAKDOWN OF PERFORMANCE IN Q1 2022 COMPARED TO PREVIOUS PERIODS

Earnings

(Q1 2022) 	Earnings
(Q1 2021) 	Variance
(YoY %) 	Earnings
(Q4 2021) 	Variance

(T/T%)

Revenue 	5,230 	4,610 	13.5% 	4,440 	17.8%
Operating Profit 	3,119 	2,272 	37.3% 	430 	625. 5%
Net Profit 	2,452 	1,940 	26% 	62 	3,830%

?Table: from Krafton 1Q22 results (preliminary) on a consolidated basis (unit: KRW100M)

For the latest information on KRAFTON, please visit www.krafton.com. Assets and other press releases can be found on the official website KRAFTON Press room.

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On KRAFTON, Inc.

KRAFTON, Inc. is a collective of independent game development studios united to create innovative and engaging entertainment experiences for gamers around the world. The company consists of PUBG studios, Bluehole Studio, Studios within striking distanceRisingWings, Dreamotion and Unknown Worlds, each with their own unique expertise.

KRAFTON is responsible for leading entertainment properties including PUBG: BATTLEGROUNDS, NEW STATE MOBILE, The Callisto Protocol, TERA and ELYON. As a technology-driven company with world-class capabilities, KRAFTON seeks to expand its business areas beyond games, into multimedia entertainment and deep learning. For more information on KRAFTONplease visit www.krafton.com.

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