The launch of PUBG Mobile, later redeveloped into Battlegrounds Mobile India after it was banned by the government, was a turning point for that nation’s games industry.
Still one of the nation’s most popular games, BGMI is handled by Krafton India – the Korean publisher’s subsidiary dedicated to this region – and continues to drive the company’s strategy in the area.
During my time at India Game Developer Conference, I caught up with Krafton India CEO Sean (Hyunil) Sohn, who is also in charge of operations in MENA and previously worked at the company’s headquarters.
Our conversation explored how the PUBG firm approaches this market, the opportunities that lie ahead, and how India fits into Krafton’s global strategy. The interview below has been edited for brevity and clarity.
How big a market is India for Krafton?
So it’s been three and a half years since we started the operation in India. The main product that we are servicing is BGMI – Battlegrounds Mobile India – which is the Indian version of PUBG Mobile. That accounts for more than 95% of our revenue from India.
We also have a corporate development team which has invested roughly $170 million into India’s startup ecosystem, including gaming, esports and also digital content platforms. So that’s a quick summary of what we are doing in India.
When it comes to global revenues, India accounts for roughly 10%, give or take. Not as big as Korea, China or the US, but the market is growing at double digits while the global gaming market – especially more mature markets like China or the US – grows only maybe 3% or 4% per year.
Compared to other global gaming companies, we made a sizable bet on the India market, and we have a sizable team based out of Bangalore.
What have been the biggest lessons you’ve learned since setting up in India?
For the publishing side, one of the lessons that we learned – I mean, we kind of knew it before, but now we know it much more clearly – is that India is still yet to develop a more [varied taste for games].
“We are very lucky that we have a good, sizable cash cow [in BGMI]”
Obviously shooter games like BGMI are super popular here, as well as card games and old board games like Ludo or Rummy – these are big in India, but other genres like strategy, MOBA, and sports, are still much smaller than in the global market. We’ve launched new strategy games, we’ve also invested in a sports game company called Nautilus Mobile [developer of Real Cricket] but it’s not very sizable. So you need to be a little patient and you need to bring something very specific for local tastes. Otherwise the ROI might not be as good as other, bigger markets.
How do you make games that specifically target the Indian market effectively?
We are very lucky that we have a good, sizable cash cow [in BGMI] which can sustain the team and also we can use those financial resources to bring more titles to the market. We have that strength. But you need to have a local team on the ground.
It’s a chicken and egg issue of whether you have big enough revenue from the market to justify your investment in setting a team or allocating a lot of your time to managing the market – but we have a chicken anyway, so we can try to lay more eggs.
How have you approached BGMI differently to PUBG Mobile?
The core gameplay is the same but there are negative perceptions towards gaming [in India] in general and also shooter games like BGMI. So we tried to bring in some safeguards or solutions to the concerns that the government or general public might have. Also, we tried to make it more localised so that people don’t feel too uncomfortable, so we tried to change or remove certain global features for the local market.
[Editor’s note: Examples include changing ‘Kills’ to ‘Finishers’, removing blood effects, and the addition of a warning before each match that this is a virtual simulation not based on the real world. There are also age restrictions, time limits for younger players, and BGMI players are only able to be matched with other users in India.]
BGMI has been credited for driving a shift in India, encouraging players to spend less time on real-money games and more on midcore titles. We’ve even seen a bunch of India-developed rivals to BGMI emerging. What is it about the game that’s making midcore more popular, and what can companies do to capitalise on this?
Indian gamers have a very sophisticated demand for good quality gaming content and there are not many local game developers who can actually make a game to satisfy that level of demand. There are quite a few good gaming studios from India, but what they are producing might not be good enough or large enough to cater to the local demands.
Indian gamers are still trying to play global games more but global game companies don’t really pay too much attention to the local taste of the market. I believe there are not many global gaming companies like us to have a local team and to do some differentiated marketing for the consumers.
And while there are more gamers who are enjoying midcore games, that doesn’t necessarily mean that there [aren’t] many more games which are actually successful today. Sports games like FC Mobile and eFootball, some of the racing games like Asphalt 9 and Need for Speed, they are actually doing better and better. So we can see that gamers are actually wanting that kind of game now.
Why is Krafton investing so much in an emerging market like India?
The emerging gaming markets, like India, Latin America and Southeast Asia, are more significant than before in terms of economy. And there are a lot of different cultural or economical backgrounds between these emerging markets and global mature gaming markets. India and MENA, or even including Latin America or some parts of Southeast Asia, have a significance in showing that there could be some different trends in the gaming industry.
I used to read GamesIndustry.biz for many, many years, but now I’m spending less time on your newsletter and site because gaming journalists from mature markets do not really look at the emerging markets with the same level of detail. I mean that’s very natural, but these markets are becoming bigger and growing faster.
We want to build a good model case for emerging markets so that we can apply a similar way of setting up an organisation and expanding the market, doing something with a more localised approach which appeals to the local taste and so on. That’s what we are trying to do in India and MENA. Hopefully, we can learn and build a case from here and apply that in other emerging markets so that Krafton’s global presence can become more universal. We are currently more centered in North America, China and Korea – those are our key core markets – but the other markets are also growing.
How does Krafton acquiring studios like Tango Gameworks benefit regional operations like Krafton India?
In general, acquiring good studios who are able to create new IPs is a big plus for Krafton. Tango Gameworks showed they have the capacity… Hi-Fi Rush may not be a blockbuster success, but there are some core fans who like the art style and the gameplay, so maybe that’s why our HQ team saw the potential and did the acquisition. That will strengthen our capacity for generating new IP.
We also have other projects which are converting IPs from PC and console to mobile. That’s another area where we see big potential.
“The emerging gaming markets, like India, Latin America and Southeast Asia, are more significant than before in terms of economy”
How does India factor into Krafton’s M&A strategy?
In India, there are a few studios that are quite good but they are now either very self sustainable or they have been acquired by a bigger European company like Stillfront. So there are not that many studios which you can or would want to acquire.
But obviously we are trying to see what’s in the market. Maybe there are very early stage companies with some experience on their team, but we are trying to help them to build something on their own with our incubation program or equity investments. We are continuously doing that.
Krafton recently signed a deal with Pocketpair to bring Palworld to mobile. Given how popular anime and some Japanese media is in India, do you expect that to perform well here?
I believe so. Pokémon might not be that big in India compared to Korea, Japan or the US, but it’s a common psychology that gamers or young people generally like to have some sort of virtual pet on their phone or in games. So it has that universal appeal for gamers. I mean, there are a lot of other reasons why Palworld on PC was so successful, but that’s also one of the core things which people liked. If you can transfer that well to a mobile platform, more customized for mobile gameplay, then obviously that will work.