Krafton, the South Korean developer of the PUBG battle royale franchise, said on Tuesday that its third-quarter operating profit fell 35.5% from a year earlier to 225 billion won, even as sales rose 11.6% to 971.4 billion won. The company also swung to a net loss of 68.4 billion won, against a profit of 369.4 billion won in the same quarter of 2025, according to its preliminary filing with Korea's financial regulator.

For investors who have treated Krafton as one of the steadier earners among Asian game stocks, the quarter breaks a pattern. It was the second consecutive quarterly net loss: the filing shows Krafton lost 29.9 billion won in the second quarter as well. Operating profit also fell 45.2% from the second quarter, when it stood at 410.9 billion won, and sales dropped 24.7% quarter on quarter from 1.29 trillion won.

The filing does not break out the items below the operating line. Krafton reported a pretax loss of 80.8 billion won for the quarter, compared with a pretax profit of 486.7 billion won a year earlier. Net income attributable to owners of the parent was a loss of 64.1 billion won.

Krafton's sales mix shifts to mobile and advertising

The year-on-year sales gain came largely from outside games. In its results release, Krafton said its "others" segment brought in 219.6 billion won, more than 12 times the year-earlier figure, including 198.4 billion won of advertising and content revenue from ADK Group, an advertising business it now consolidates.

The core game businesses were mixed. Mobile revenue rose 3.2% from a year earlier to 504.3 billion won, helped by in-game collaborations with the Naruto and Ferrari brands, the company said. PC revenue fell 32.5% to 238.9 billion won and console revenue slipped 15.9% to 8.6 billion won. Krafton attributed part of the quarter's costs to its presence at gamescom, the games trade fair.

The nine-month picture looks stronger. Cumulative sales through September reached 3.63 trillion won, up 50.9%, and operating profit rose 13.8% to 1.1975 trillion won, both records for the period, according to the company. That nine-month operating profit already equals 114% of Krafton's operating profit for all of 2025. Cumulative net income, however, fell 45% to 415.8 billion won, the regulatory filing shows.

The results land in a busy week for Korean game makers. A day later, rival NC reported that Aion 2 nearly doubled its quarterly sales and returned it to an operating profit.

PUBG pipeline, India and buybacks

Krafton is leaning on its existing franchise and a new release slate. The company said PUBG intellectual property revenue rose 11% in the first nine months, and that PUBG: Battlegrounds posted double-digit growth in monthly active users on PC and console. Subnautica 2, its underwater survival game in early access, has sold more than 5 million units, with a larger update planned for the end of the year. PUBG: DED.NET, a console shooter aimed at Western players, held a closed beta in October and is targeted for 2027.

India remains the main emerging-market bet. Krafton said Battlegrounds Mobile India has passed 200 million downloads, and that BGMI Air, a lighter version for lower-end phones, has drawn more than 14 million pre-registrations ahead of its Dec. 10 launch. The company said it has invested more than $200 million in Indian startups since 2021.

The franchise is also moving beyond games. The Korea Herald reported on Oct. 30 that a live-action PUBG series is being developed for Netflix, with Donald Glover set to write, direct and star.

Shareholder returns were left intact despite the weaker quarter. Krafton's board approved an additional 300 billion won share buyback on Nov. 3, according to a regulatory filing, and the company said those shares will be canceled in full. Through the third quarter it had bought back about 400 billion won of its own stock, paid a 99.6 billion won capital-reduction dividend and canceled 517.6 billion won of treasury shares, equal to 4.4% of shares issued. Krafton said total shareholder returns for 2026 will reach 917.2 billion won, its largest annual payout since it began the program in 2023.

The next test comes on Dec. 10, when BGMI Air goes live in India, followed by the Subnautica 2 update at year-end.