Krafton to closely co-operate with Indian authorities to resolve BGMI ban, says CFO

Krafton will closely cooperate with the Indian authorities to find ways to reinstate the suspended battle royale game Battlegrounds Mobile India (BGMI) in the country, the South Korean video game company's CFO Bae Dong-geun said on August 11.

"We fully respect and understand the Indian government's concern and as we have been directly running the service based on stringent data security standards and monitoring. We will closely cooperate with the authorities to find ways for the users in India to keep enjoying BGMI," he said during the company's earnings conference call.

BGMI was pulled out of Google Play Store and Apple App Store on July 28 following an interim government order. The app was also removed from third-party marketplaces such as Codashop and BGMI's website.

This is the second instance that Krafton is facing a ban on a mobile game title in the country after the South Korean firm’s flagship title PlayerUnknown's Battlegrounds (PUBG) was banned in September 2020 with 117 other China-linked apps over data security concerns.

Since then, Krafton cut ties with its publishing partner Tencent, a Chinese firm, and took over all publishing responsibilities in India. It also set up a subsidiary and invested about $100 million across various local startups in areas such as video games, esports, and entertainment.

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While the government has not officially commented on this suspension, Minister of State for Information Technology Rajeev Chandrasekhar, recently told Moneycontrol that any app "sending data back in violation of our laws will be taken down. It has nothing to do with which country the app originated in".

Before the ban, Krafton had claimed that BGMI had surpassed 100 million registered users in India in July. It had clocked about $33 million in-app spend from July 2021-July 2022, according to estimates app intelligence firm Sensor Tower shared with Moneycontrol.

"In the second quarter, we broadened the user base through own and offline collaborations in the local market, and expanded monetized content offerings, providing a battle royale experience unique to BGMI", Bae Dong-geun said during the call.

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He also mentioned that BGMI Masters series, which recently became the first ever televised esports tournament, saw around 24 million viewers watching the tournament on television. The tournament was held by Nodwin Gaming between the months of June and July 2022 and was broadcast on Star Sports 2.

The tournament was also streamed live on game streaming platform Loco and mobile lockscreen content platform Glance. "Including digital viewership, close to 200 million users watched the event", he said.

Overall, Krafton saw a 3 percent increase in its revenues to 946.7 billion Korean won (around $727.7 million) for the first six months of the year, while net income grew by 31 percent to 439.2 billion Korean won ($337.6 million).

The South Korean gaming giant generates the majority of its revenues from its mobile business, which posted revenues of 715.6 billion Korean won ($550 million), accounting for 75.6 percent of its total revenues.

The company's PC business reported revenues of 194.7 billion Korean won ($149.6 million), accounting for 20.6 percent of the company's revenues. Meanwhile, its console business reported revenues of 24.6 billion won ($18.9 million), contributing for about 2.6 percent of its total revenues for the first six months.

In terms of geographies, Asia accounts for 85.3 percent of Krafton's H1 2022 revenues, followed by North, South America and Europe markets (8.4 percent) and Korea (5.6percent).