Krafton Acquires Eleventh Hour Games: What’s Happening?

On July 25, 2025, Krafton announced the 100% acquisition of US game development studio Eleventh Hour Games. The acquisition, valued at ₩132.4 billion, aims to strengthen Krafton’s game development capabilities and enhance its global market competitiveness.

Why This Acquisition?

Krafton’s recent Q1 2025 earnings disappointment highlighted the need for new growth drivers. The acquisition of Eleventh Hour Games offers potential benefits such as new IP, expansion of existing IP (PUBG), and stronger penetration into the US market.

How Will This Impact Krafton?

Potential Upsides

  • Enhanced Game Development Capabilities: Expands development into various genres and potential new revenue streams.
  • Stronger Global Market Competitiveness: Provides a foothold in the US market and potential for global synergies.
  • New IP Development and Existing IP Expansion: Leverages Eleventh Hour Games’ development experience.

Potential Downsides

  • Short-term Financial Burden: The ₩132.4 billion acquisition cost could strain Krafton’s finances.
  • Uncertainty about Post-Acquisition Synergies: Integration challenges and cultural differences could hinder success.
  • Increased Exchange Rate Risk: Fluctuations in the KRW/USD exchange rate could impact performance.

What Should Investors Do?

Investors should be prepared for potential short-term volatility and focus on analyzing the long-term impact of the acquisition and the realization of synergies. The performance of 1nJoy and the recovery of Unknown Worlds Entertainment are also key factors to watch. Careful consideration of exchange rate risks and financial risk management is essential.