Krafton Acquires Controlling Stake in Indian Gaming Studio Nautilus Mobile
South Korean gaming giant Krafton, the company behind popular titles like PUBG: Battlegrounds and Battlegrounds Mobile India (BGMI), has strengthened its presence in the Indian market by acquiring a controlling stake in Nautilus Mobile. The Indian gaming studio, known for its Real Cricket franchise, was acquired for $14 million in an all-cash transaction.
Acquisition Details and Future Operations
The acquisition, confirmed by Krafton to TechCrunch on Friday, secures the South Korean firm a stake “north of 75%” in Nautilus Mobile. Nautilus Mobile, established 12 years ago, is renowned for its cricket-themed mobile games, particularly the widely acclaimed Real Cricket series.
Despite the acquisition, the Pune-based studio will maintain independent operations. All 45 current employees of Nautilus will remain on the payroll, ensuring continuity and leveraging existing talent. The deal is anticipated to be finalized by the end of the current month.
Nautilus Mobile’s Success and Real Cricket Franchise
Nautilus Mobile, founded in 2013, has achieved significant success with its Real Cricket franchise, amassing millions of downloads. The franchise currently comprises five titles, including the latest iterations, Real Cricket 24 and Real Cricket Premier League.
Real Cricket 24
Strategic Rationale Behind Krafton’s Investment
Enhancing Mobile Cricket Gaming and Exploring New Genres
Krafton aims to utilize Nautilus Mobile‘s expertise to fortify its position in the mobile cricket gaming sector, particularly in India, a market with substantial demand for cricket-based games. Sean Hyunil Sohn, CEO of Krafton India, stated in an interview that the strategy involves refining existing Real Cricket titles in the near term while exploring opportunities in new gaming genres for long-term growth.
Synergies and Expansion Opportunities
Anuj Mankar, CEO of Nautilus Mobile, highlighted the synergistic potential of the acquisition. He stated that Nautilus‘s development capabilities will bolster Krafton‘s India gaming strategy, paving the way for the creation of more games across diverse genres, targeting both the Indian and global markets.
Nautilus CEO Anuj Mankar
Krafton also intends to expand Nautilus‘s reach to new geographical markets in the future, leveraging the studio’s strengths on a global scale.
India’s Burgeoning Mobile Gaming Market
The Indian mobile gaming market is experiencing consistent growth, driven by a large and youthful smartphone user base. Mobile games dominate India‘s overall gaming industry in terms of spending, accounting for 77.9% of total revenue, according to market intelligence firm Niko Partners. The firm projects that India‘s mobile gaming revenue will increase from $640 million in 2023 to $1.1 billion by 2028.
Krafton’s India Strategy and Performance
Building Beyond BGMI’s Success
Krafton has identified India as a crucial market for its continued success, evidenced by its 119.3% year-over-year net profit growth last year, reaching approximately $889 million (KRW 1.3 trillion). Much of this growth in India has been attributed to Battlegrounds Mobile India (BGMI), its flagship title tailored for the local audience. BGMI achieved record sales last year and surpassed 200 million downloads.
While Krafton has other titles like Bullet Echo India, Road To Valor, and CookieRun, none have replicated the immense success of BGMI, the localized version of PUBG.
The Nautilus Mobile deal presents Krafton with an opportunity to diversify its portfolio beyond BGMI and explore new avenues for growth, particularly in cricket and other sports-based games, attracting a broader spectrum of gamers.
Sean Hyunil Sohn, CEO, Krafton India
Past Investments and Enhanced Collaboration
In 2020, Indian digital entertainment and technology company JetSynthesys acquired 100% of Nautilus Mobile. This was followed by Krafton‘s initial strategic investment of $5.4 million in 2022.
Sohn explained that while Nautilus‘s potential prompted the initial investment, Krafton found its minority stakeholder position limited its ability to effectively support the studio’s content development. Securing a controlling stake will enable deeper collaboration and greater involvement in core development initiatives with Nautilus.
Focus on Cricket Gaming Potential
Nihansh Bhat, Corporate Lead Development at Krafton India, emphasized the significant potential of cricket games. He stated Krafton‘s commitment to working closely with Nautilus to fully realize this market potential, not only in India but also in other cricket-playing nations and emerging cricket markets globally.
JetSynthesys’ Continued Involvement
JetSynthesys will remain a “significant minority” investor in Nautilus Mobile and will continue its collaboration with the studio, particularly in areas like eSports. JetSynthesys has previously partnered with Nautilus to integrate its Real Cricket game with cricket teams, including those associated with the Indian Premier League (IPL), the world’s most lucrative cricket tournament.
Measuring Success and Future Outlook
Bhat outlined Krafton‘s key metrics for evaluating the deal’s success post-completion, including increased revenue, user base expansion, improved user retention, and the acquisition of new partnerships.
Prior to the Nautilus Mobile acquisition, Krafton had already invested over $200 million in India.
Krafton’s Broader Investment Strategy in India
Krafton‘s investments in India have primarily focused on gaming and gaming-related companies. However, the company has also diversified its portfolio by investing in Indian startups across various sectors, including payments platform Cashfree, audio platform Kuku FM, and influencer marketing platform One Impression. Furthermore, Krafton has supported investment funds like gaming-focused Lumikai and IMM Investment’s first India fund.
Sohn indicated Krafton‘s ongoing interest in India, stating that they are actively exploring opportunities for further acquisitions, strategic investments, and business collaborations with key players in the country.
Nautilus Mobile Joins Krafton’s Global Network
Nautilus Mobile will become part of Krafton‘s extensive network of 14 game studios operating in diverse markets worldwide, further expanding Krafton‘s global reach and development capabilities.
