Business of Esports TV: PUBG Billions

(Livestream 136)

In this segment, we discuss Krafton raising $5B in public offering.

The Business Of Esports brings you news, debates, and all the information you need to know about the gaming sector, the world’s fastest-growing market. With Paul “The Profit” Dawalibi leading the charge, and a variety of special guests, BoE TV is the only place to find insider information on the esports industry!

Check out the full livestream here:

Paul Dawalibi 18:49
Alright, let’s, let’s talk about let’s start with something serious guys. Let’s start with a bit of serious news. Hardcore business news here. Okay. And this is an article that we didn’t get to on the podcast, but I think is gonna have some good discussion here. This is PUBG maker Krafton raising $5 billion in a public offering. You know, they make PUBG it’s a South Korea based company. They’re going to sell a bunch of shares to raise this money and the public offering would value Krafton this is the interesting part here at 25 billion. Fortnite and Unreal, right Epic Games is currently valued at 28 billion based on their last private round. Does anyone think Krafton is worth the same as an as an Epic Games. Does anyone put these two companies on the same playing field here at the end? should be worth the same.

Jeff Cohen 20:02
No, but when when when Epic goes to go public, I mean, they’re going to be worth 75 million billion. So, you know, I don’t think they are on the same plane. Yeah, literally not even a joke. Like I think that’s actually probably accurate

Paul Dawalibi 20:15
probably

Jeff Cohen 20:16
But even still 25 and I, I didn’t. I tried to find the filing and it because they filed in South Korea was really hard to find. And then everything’s in like, whatever their currency is, which it was too hard to figure out translating it was like, Yeah, like, you won. I’m like, Okay. I can’t do that. To me, it’s in one, it shows the impressive reach of PUBG. Right? Like, I think people, the narrative, like the prevailing narrative a little bit is that PUBG kind of went away once Fortnite overtook it. And obviously, that didn’t happen clearly. Particularly on mobile, I think pubsey Mobile, yeah, as cared for them. But it’s still pretty wild to have a $25 billion valuation with effectively one game. You know, it makes you wonder why like someone like EA is only worth 40 billion in that in that paradigm when EA has way more franchises, way more robust franchises, and significantly higher earning. So one of them

Paul Dawalibi 21:18
Is EA worth less than two PUBG’s.

Jeff Cohen 21:21
No, I don’t I don’t think so.

William Collis 21:24
Is it? Is it PUBG is overvalued, or EA is undervalued?

Jeff Cohen 21:28
I think here, it’s a little bit of both.

Jimmy Mondal 21:29
I also have a question. Is it just PUBG? Or like, does that group because I know the engine that PUBG is built on is a really popular MMO engine, which lots of MMOs are built on. So I’m not sure if they also own those other games. But does anyone know?

Paul Dawalibi 21:44
I don’t know how much Krafton has. They have other studios, I think, but I’m pretty sure. PUBG is by far their biggest like PUBG. In India last year had 175 million downloads Jesus Christ, which

Lindsay Poss 22:05
overall is a massive,

Paul Dawalibi 22:07
a massive number and Krafton was if you guys remember Bluehole. Right. That’s what came Krafton.

William Collis 22:13
Let me make the conterpoint here though. Like if you think that winning on mobile is the most important thing here, which you can argue about. But just take that as a premise that having a game that wins on mobile is one of the most important ingredients to a major publisher, at least for a revenue generating publisher today. Right? If you take that as a premise, then why isn’t PUBG worth more than Epic? Or because Epic’s having mobile woes? Right? Like they have to sort that out? These guys are crushing it in, you know, big emerge. I mean, I’m not saying this is like a airtight argument. I don’t really believe but like, yeah, there is a world where you can look at this as an investor and say, if you believe certain things, a parody valuation here isn’t crazy. And by the way, I kind of take a little bit, I get your point that Epic is going to go public twice as big as whatever, but these guys will go public twice as big, like, at some point, you know what I mean? Like if you’re raising 5 million in a private round now,

Jeff Cohen 23:07
they’re they’re going public. This is

William Collis 23:08
Oh, this is the they’re going public at this price. Sad point in our mind, let me

Jeff Cohen 23:12
know. So I wasn’t trying to like dunk on you those?