Krafton founder and Chairman Chang Byung-gyu speaks during a press conference on July 26, 2021. Courtesy of Krafton

By Baek Byung-yeul

Krafton, best known for its online shooting game "PlayerUnknown's Battlegrounds" (PUBG), is facing increasing criticism from its shareholders and employees for its inability to revive its plunged share prices, according to game industry analysts, Monday.

The company made its debut on the KOSPI on Aug. 10, 2021, with its offering price set at 498,000 won ($409.60) per share, but its stock price plunged by 45 percent to 276,000 won as of Monday.

The analysts said the decline in Krafton's stock price stems from the stagnant growth of?"PUBG." Pointing out that the company has shown heavy reliance on "PUBG," they added that its future games must be successful in the market to recover the stock price.

The decline in the company's stock price is causing financial losses not only for shareholders but also its employees who joined the IPO through an employee stock ownership program.

The stock ownership association of the company holds 351,525 shares, and each of its 1,330 employees own 264 shares on average. Given their initial officering price was at 498,000, it is estimated the employees have seen a fall of more than 40 percent through the stock ownership program.

To assuage employee anger, the company's founder and Chairman Chang Byung-gyu posted a message on the company website in January, saying "It is each person's personal decision as to whether to participate in the stock ownership association, and neither I nor the company can hold unlimited responsibility. However, as a member of management, I feel a heavy responsibility."

Chang purchased 105,600 shares of the company for 30 billion won this month. But that amount is only 0.2 percent of all issued shares, and questions have been raised among shareholders about the effectiveness of stock purchasing.

In the online space, retail investors are mainly criticizing Chairman Chang due to falling stock prices. "Chairman Chang spent his own money to buy shares of the company, but it is not enough to boost stock prices. The company needs to purchase its own shares and report it to the financial regulator to increase value," a user wrote on an online stock market message board.

In regard to the stock plunge, Krafton said the company is trying to diversify its business model and provide constant updates for its latest mobile game "PUBG: New State," so that beginners can join in the fun from the beginning.

"The company is developing new games and continues to tackle new businesses such as non-fungible tokens (NFTs). Through these activities, we are doing our best to recognize the value of the company in the market," a Krafton spokesperson said.

As the official mentioned, Krafton is striving to enhance its corporate value. For the constant popularity of its shooting game, the company is working hard to revitalize esports based on "PUBG," as esports not only help with intellectual property but also contribute to expanding the number of users. Krafton also announced a plan to support the creation of an esports team.

As part of the plan to diversify its business portfolio, the company has been actively engaged in new businesses such as deep learning, virtual humans, virtual reality (VR) and NFTs. It is also betting big on its upcoming horror game "The Callisto Protocol," which will be released for PC and gaming consoles in the second half of this year.

It remains to be seen what kind of fresh vision the company will come up with at its shareholders meeting on March 31. The industry view is that the company's stock price will rebound only when the company presents a new vision and a reasonable shareholder return policy.