Chang Byung-gyu, founder and chairman of Krafton.
Jean Chung/Bloomberg
South Korean billionaire Chang Byung-gyu’s online gaming giant Krafton has agreed to acquire Japanese advertising and animation production company ADK Holdings for 75 billion yen ($517 million).
Krafton, the developer of the mega-hit PlayerUnknown’s Battlegrounds (PUBG) online game, said in a statement on Tuesday it’s acquiring ADK from Bain Capital Japan.
ADK was founded in 1956 as an advertising agency in Tokyo. Since then, the company has expanded into digital marketing and animation production. ADK has participated in more than 300 animation productions for intellectual properties including Crayon Shin-chan and Doraemon.
Krafton said in the statement that it seeks to expand its gaming IPs into animation. “ADK is a partner with deep understanding and strong execution capabilities across Japan’s content industry,” said Krafton CEO Kim Chang-han. “Through our collaboration, we aim to continuously discover new intersections between games and animation, and create new opportunities in the global content business.”
Krafton’s deal to buy ADK comes as the online gaming giant is trying to diversify its revenue stream after years of dependence on its battle royale game PUBG. In March, Krafton released inZOI, a life-simulation game similar to Electronic Arts’ the Sims. The company said it sold more than a million copies of inZOI in its first week, which helped boost Krafton’s first-quarter sales to a record-high of 874.2 billion won ($641 million). inZOI’s concurrent players, however, have dropped more than 98% since its launch as of Tuesday, according to gaming data tracker SteamDB.
While inZOI appears to be losing steam, Krafton is going on a spending spree to expand its portfolio. In February, the company led a $53 million funding round in Indian payments startup Cashfree Payments. The investment was part of Krafton’s strategy to strengthen its presence in India, a key market to Krafton where its Battlegrounds Mobile India (BGMI) is among the country’s most popular mobile games. It came after Krafton injected $90 million in Spoon Labs, a Seoul-based company that operates a short-form K-drama streaming platform, last September.
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