Beyond Battle Royales: Inside Krafton’s India investment playbook

Krafton’s presence in India extends far beyond battle royales. With investments totalling over $170 million across various startups, the Battlegrounds Mobile India (BGMI) maker has positioned itself as a venture capitalist, backing sectors that complement its long-term vision.

With over 20 million active players logging into BGMI every month, the game’s success in India has been driven by the rapid growth of mobile internet access and affordable smartphones—trends that have not only reshaped the gaming industry, but also given rise to new startups and investment opportunities across the country.

Over the past few years, the South Korean gaming giant has played a dual role in India's rapidly-growing internet ecosystem, both as a market player and a strategic investor.

Since making its first investment of $22.5 million in NODWIN Gaming in March 2021, the gaming firm has made strategic investments in over ten Indian startups and game studios.

“We don’t have a specific sector focus,” says Nihansh Bhat, Lead at Corporate Development, in an interaction with YourStory.

“As strategic investors, we invest where we see alignment with our core business or our growing portfolio of media and entertainment assets,” he adds.

Unlike traditional investors, Krafton does not operate with a fixed exit horizon. The company sees itself as patient capital, willing to hold investments for extended periods. “Our objective is to work together and realise long-term value. We will only look at exits if synergies don’t materialise or if founders wish to exit,” he says.

This approach stands in stark contrast to traditional VCs, who typically look for exit routes within a few funding cycles. Instead, Krafton is willing to wait until its portfolio companies reach critical milestones—whether it is an IPO or a late-stage funding round.

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Fintech foray

Krafton’s recent investment in Indian payments firm Cashfree, where it led a $53 million round, marked its foray into the fintech sector. 

Payments, according to Krafton, are central to media and entertainment businesses. “A seamless payment experience is imperative to not destroy the customer experience,” he says.  The company has worked with several payment providers, but chose Cashfree because “we believe it is one of the few companies that can create the best kind of customized solutions for different industries,” says Bhat.

Regulatory compliance was another major factor. “From a regulatory perspective, they are one of the few companies that are fully licensed. They were among the first to receive a full license, not just an in-principle approval,” he notes.

Krafton believes Cashfree’s solutions can benefit its portfolio firms as well. “We see significant synergy here. This investment helps us put our best foot forward in making this partnership successful,” Bhat says. 

Beyond fintech, Krafton has aggressively backed Indian gaming studios, including Devtouch, Lila Games, and Nautilus Mobile. It has also set up the KIGI program, an incubator for early-stage game developers, with investments as small as $150,000. 

The programme’s inaugural cohort includes ReDimension Games from Nagaland, developing the action-adventure game ‘Sojourn Past’, and Bengaluru-based Shura Games, creators of the mobile puzzle game ‘Spice Secrets’.

AAA gaming scene in India

The absence of a robust AAA gaming ecosystem in India has often been a topic of debate, especially when compared to China’s global success with titles like Black Myth: Wukong. 

Krafton believes this is not necessarily the right benchmark for Indian studios. “India’s strength might not lie in AAA development, and that’s okay,” Bhat explains. 

“Other markets, like Turkey, have become global gaming powerhouses without relying on AAA titles. Instead, they have built strong casual and mid-core segments catering to global audiences,” he adds.

Building a AAA game requires massive capital investment, large development teams, and years of iteration—challenges that many Indian studios are not yet equipped to handle. Instead, Krafton sees an opportunity in developing world-class mobile and mid-core games tailored for global audiences.

“There are many ways to dominate gaming,” says Bhat. “AAA development is just one path. We believe India has strong potential in mobile-first gaming, especially given its developer talent and understanding of global trends.”

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Beyond AAA: Mobile and mid-core gaming

According to Nihansh, Indian game developers should prioritise originality over imitation. “Many developers attempt to replicate GTA or shooter games, but true success comes from fresh ideas and innovative mechanics,” he says. 

He emphasises that engaging gameplay and unique concepts are crucial for retaining players. Bhat also stresses the importance of early testing rather than striving for perfection before release. 

“Gaming is iterative—developers need to embrace failure, learn fast, and refine their games through soft launches,” he notes. Early testing allows for valuable feedback that can optimize mechanics and improve engagement before scaling globally.

Bhat believes industry mentorship is as valuable as funding. “The right mentors provide crucial insights, helping developers avoid common mistakes,” he says. 

Engaging with gaming communities, attending industry events, and participating in local meetups, especially in hubs like Bangalore, can help developers gain exposure, secure collaborations, and stay updated on industry trends.

While India is yet to produce a global AAA title, Bhat sees immense potential in mobile and mid-core gaming. “The next decade will see Indian studios creating global hits, even if they’re not AAA console games,” he says.

Driving growth

In a bid to attract more Korean investors to India, Krafton has anchored India-focused investment vehicles like the IMM India Fund. Through these initiatives, the firm aims to play an active role in bridging the gap between the two markets, helping Korean investors warm up to India’s rapidly-evolving startup ecosystem.

The company has also made investments in funds like 3 one 4 Capital and Lumikai, with the latter focused on gaming and interactive entertainment.

These investments not only provide Krafton with access to a broader pipeline of deals but also offer valuable insights into emerging trends, identify high-potential startups early on, and collaborate with other investors to shape the industry’s future.

The firm still has significant dry powder left from its $150 million India investment corpus, which is expected to be deployed over the next two to three years.

While gaming and startup have been key focus areas, Krafton is also evaluating deeptech and AI investments.

“India is emerging as a great deeptech market,” says Bhat. “We haven’t found the right candidate yet, but we’re actively exploring opportunities.”