Krafton freezes hiring to focus on AI strategy

Krafton, the South Korean company behind PUBG, is temporarily halting recruitment as it shifts to an “AI-first” development strategy.

The company reported a 7.5% rise in Q3 operating income, below analyst expectations, despite a 21% revenue increase.

Krafton has announced plans to invest over 100 billion won (US$70 million) in AI and expand its game portfolio.

Its share price has dropped about 10% in 2025 amid broader volatility in the US$178 billion gaming sector, driven by changing consumer habits and online streaming.

Krafton demonstrated AI technology at CES 2025 in partnership with Nvidia, featuring non-player characters with more complex behaviors.

Executives said new games are expected in 2026 and 2027, and identified India as a key market, with ongoing development of cricket-themed titles.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Krafton puts 100 billion-plus won into AI as profits climb

The planned AI spend tops 100 billion won, about 3.7% of 2.7098 trillion won in 2024 revenue 1. Profits rose 54% in 2024, and average sales grew 20% a year over five years 1.
A hiring freeze, a temporary recruitment pause, sits alongside record profit 1. Krafton is building inZOI, an in-development title, with Smart Zoi autonomous agents and PUBG’s Co-Playable Character PUBG Ally using NVIDIA Avatar Cloud Engine (ACE) 2. These efforts need AI specialists more than traditional game developers.
New games are slated for 2026 to 2027, with PC and console sales nearing 1 trillion won 1. Krafton is repositioning while finances are solid, unlike studios pivoting under falling revenue.

Infra firms can serve AAA studios adding real-time AI NPCs

NVIDIA ACE enables on-device inference with low latency through the NVIDIA Inference Graph Interface (NVIGI) software development kit (SDK), which schedules AI inference alongside graphics workloads 3. This opens room for middleware vendors offering inference tuning and memory tools across hardware.
Krafton’s CPC (Co-Playable Character) tech uses small language models for cognition plus multimodal models that handle text plus images plus audio for vision plus audio 2. This pushes demand for voice synthesis and behavior modeling. Vendors with game training data, custom Audio2Face models, and Retrieval-Augmented Generation systems can serve studios beyond Krafton’s named partners 3.
PUBG’s CPC, inZOI’s Smart Zoi, and MIR5’s adaptive AI bosses are live in demos 2. Tool makers can earn near term by helping teams fine-tune foundation models for game language, loot rules, and tactical behavior without starting from scratch.