Who Really Owns PUBG – Tencent or Krafton?
As an avid PUBG gamer myself, this burning question around the game‘s actual ownership has stirred up controversy ever since Tencent entered the picture back in 2017. While they‘ve definitely left their mark through publishing partnerships and the mobile version, I‘m here to cut through the confusion and set the record straight once-and-for-all.
The Complex Tencent-Krafton Relationship
Krafton and Tencent‘s ties trace back to June 2017, when the Chinese tech giant bought a 1.5% stake in Bluehole Studio for $46.1 million – the South Korean developer which would soon rebrand as Krafton. This seemingly small investment kicked off a snowballing partnership.
By August, Tencent led a $100 million funding round to ramp up Krafton‘s marketing and esports ambitions for their runaway hit game PUBG. In exchange, Tencent received exclusive rights to publish PUBG in China. Then in November, through subsidiary Image Frames Tencent boosted their ownership to 13.6% during a $500 million Krafton funding round.
This table summarizes the mounting relationship over 2017:
| Date | Deal Details | Tencent Ownership % |
|---|---|---|
| June 2017 | $46.1M Investment | 1.5% |
| August 2017 | $100M Funding Round | 11.5% |
| November 2017 | $500M Funding Round | 13.6% |
But the tides shifted in 2022. Facing regulatory crackdowns in China around gaming addiction among youth, Tencent made the hard call to sell 14.8% of their total Krafton shares for around $430 million. Their ownership sharply dropped from over 13% down to just under 3% in January 2022.
So what motivated Tencent to step away as an investor, while retaining some remaining stake? Analysts suggest focusing funds towards domestic China titles better suits their revised growth strategy. While they originally hoped to use Krafton titles like PUBG to expand globally, China‘s strict content rules have restricted that potential.
PUBG Mobile Drove Major Tencent Involvement
Despite massively scaling back ownership, Tencent in fact still directly develops and publishes PUBG Mobile worldwide through their LightSpeed & Quantum studio arm. As China‘s largest company, Tencent strategically targeted the mobile domain realizing PUBG‘s breakout potential to dominate globally.
And the gamble paid off big. As just one slice of PUBG‘s total pie, PUBG Mobile has amassed an awe-inspiring $5 billion lifetime player spending across App Store and Google Play as of June 2021. For perspective the #2 top earner Honor of Kings and #3 Monster Strike Mobile have only reached around $3 billion in comparison!
However Krafton retains full control over the core PC and console versions of PUBG, which make up 58.7% of total lifetime revenue according to market intelligence firm Newzoo. So Tencent‘s influence stays concentrated in the mobile arena.
India Ban Fallout Accelerated Tencent Breakup
Tensions surrounding PUBG Mobile escalated in 2020 when India straight-up banned and blocked over 100 China-linked apps over cybersecurity and privacy concerns, including PUBG. As backlash grew against Tencent with echoes of anti-China sentiment, Krafton responded by announcing the dramatic decision to terminate its publishing partnership in India exclusively with Tencent while retaining rights.
This marked a major shift by Krafton to distance itself from Tencent‘s troubles in the Indian market, which had contributed a huge 30% of PUBG Mobile downloads at the time per analytics firm App Annie. They began developing a special India-only version called "Battlegrounds India" powered by local cloud services to resolve data security worries, which successfully relaunched in 2021 and quickly rebounded to regain over 100 million registered users.
Krafton Reclaims Control Post-Tencent
After wisely locking in massive funding rounds in previous years, Krafton seems equipped to steer it‘s flagship PUBG property fully independently without heavy Tencent promotion moving forward.
In fact analysts project Q3 2022 quarterly profits have already risen 17% year-over-year even after the monumental setback of India‘s ban, signaling strong growth runways ahead.
How does Krafton plan to stay competitive? By doubling down on innovation within the core PUBG series itself rather than solely relying on the mobile goldmine. Their next big move as owner of PUBG hinges on the recent release of PUBG: New State on mobile – a forward-thinking revamp complete with futuristic weapons, vehicles and drone deliveries.
In an interview with The Esports Observer about staying true to PUBG‘s roots, Krafton CEO Changhan Kim explained: "We want to expand beyond the battle royale genre by building numerous ips based on our expertise in the multiplayer shooter genre, while also expanding the pugb ip into areas like esports and multimedia content.”
So rest assured, Krafton clearly has an ambitious long-term vision to evolve the PUBG brand far beyond it‘s breakout battle royale origin story. Tencent may have been an invaluable launching pad, but they seem confident in controlling their own destiny henceforth.
To conclude this saga once and for all:
Krafton undoubtedly retains full ownership rights and creative direction over the core PUBG property including PC, console and sequels like New State.
Yet Tencent is also correct to boast PUBG Mobile as practically their own offspring at this point, after cultivating and enriching the mobile child to overshadow it‘s parent‘s commercial performance.
And while turbulence around India regulations sparked a messy custody battle between the two gaming giants, Krafton convincingly reestablished their dominance over PUBG‘s identity.
Though who knows – down the road reconciliation for a Tencent and Krafton joint future can never be ruled out! But for now in 2024 and beyond, long live Krafton as the one true king behind PlayerUnknown‘s Battlegrounds.
