Krafton believes in a tailored M&A approach

Michael Metzger, a partner at Drake Star Partners, sat down with Krafton’s Damian Lee at GamesBeat Summit 2022. They talked about the company’s IPO, M&A (mergers and acquisitions) and the future.

Following the success of PlayerUnknown’s Battleground, Bluehole Studio formed Krafton as a holding company. In 2021, Krafton conducted an IPO that ended up raising the company $3.8 billion. With these new funds available, Krafton set about acquiring studios. One of the latest acquisitions is Unknown Worlds.

“Unknown Worlds is a phenomenal team,” said Lee. “It’s been around for a long time, more than 20 years. They are a very tight knit team that created Subnautica which is very popular and a huge success. They’ve been financially stable, so they don’t need an investment, and they have concerns that anyone would have if they were taken over. “Will we have glitches in our creative process? Is someone going to come in and try to fire people on day one?’”

How do you convince a company to sell in this position? Lee believes you must tailor any approach to the team in question.

“We’ve taken a lot of time to understand what they’re looking for,” Lee continued. “Among other things, we were able to convince that the executive producers of the independent studios in Krafton have enormous power. It’s one of the most creator-friendly environments of any affiliate game studio. That goes all the way to the top. Our CEO didn’t have a business background, he was the Executive Producer on PUBG.”

Krafton’s approach seems to be working. Unknown Worlds will be releasing a new IP this summer, and Subnautica 3 is also on the horizon. More information on this interview can be found at GamesBeat Summit 2022.