Krafton founder: Robotics, deep learning should be S.Korea’s future

Krafton Inc. founder and chairman Chang Byung-gyu is a rare example of a serial entrepreneur in South Korea – a country dominated by family-owned conglomerates called chaebol. 

Chang founded a gamut of different internet startups, from online chatting platform Say Club by Neowiz to search engine platform 1noon.com.

In 2007, he launched game developer Bluehole Studio, a predecessor to Krafton, as well as BonAngels Venture Partners, Inc., an accelerator and venture capital firm. 

Chang is chairman of Krafton with a 14.4% stake in the company and currently serves as an advisor to BonAngels. Of all the startups he has built, he has spent the longest time building Krafton. 

ROBOTICS & DEEP LEARNING

During an interview with The Korea Economic Daily, the computer scientist by training weighed in on which sectors South Korea should zero in on in the fourth industrial revolution. 

The term refers to the rapid advances in artificial intelligence (AI), robotics, the internet of things (IoT), genetic engineering, quantum computing and more.

Chang is bullish on robotics and deep learning, a subset of AI machine learning that imitates the way humans gain knowledge. 

In terms of cloud computing, he stressed that Amazon Web Services, Inc. and Microsoft Azure Cloud are already way ahead of their competitors. 

“What makes a good cloud service is not the size of data centers but how good their software is and that depends on the ability of software engineers,” explained Chang. He added the two US tech behemoths are the best at that. 

The robotics sector, on the other hand, could create synergy with the manufacturing industry, in which South Korea boasts world-class sophistication.

But aren’t global tech giants based in California already dominating the deep learning category?

“Deep learning is still in its nascent stage and growing at lightning speed,” answered Chang. “You may think that it’s too late to compete in the industry if you are looking at the source technology only but its applications are boundless.” 

Krafton is reportedly using text-to-speech (TTS) technology in building a new project. 

“The TTS application is where a lot of South Korean companies can shine, not just Krafton,” he said, adding that the technology could be useful for a number of services. 

GAME DEVELOPER FIRST 

Although Chang is now one of the seven gaming billionaires in South Korea according to data compiled by Forbes magazine last year, the journey has not been always smooth.

Until PUBG: Battlegrounds, a battle royale game developed and published by Krafton subsidiary PUBG Studios, became an international hit in 2016, Krafton had been suffering financially for nearly a decade. 

Chang revealed the Krafton leadership’s fundamental belief is that there is room for further growth, judging by the company’s ability and the overall growth potential of the gaming industry. 

“More than 90% of our investment goes to developing games and 100% of our revenue comes from distributing games,” said the founder. “If we are diligent about creating good games, then we are bound to make a hit product once in a while.”

Even though the gaming industry is similar to that of film in that it is dependent on box office or App Store hits, the consumption spans differ greatly.

Chang stressed that although PUBG: Battlegrounds has been out for six years, it is still popular among players. 

This is how he explains the industry: “Game as a Service (GaaS) has now established itself as a solid business. Instead of ending as a one-hit-wonder in a given period, the hit games continue to build up the company.” 

The founder named League of Legends by Riot Games and Lineage by NCSOFT as examples by competitors. 

FROM OFFLINE TO ONLINE 

Krafton is planning to create a dedicated cultural center in Seoul, including an e-sports theater. 

Last year, the game developer bought retail giant E-Mart’s headquarters in Seongsu-dong, valued at around 1.2 trillion won ($923 million).

The Seongsu E-Mart headquarters has 20 above-ground floors and three basement levels and spans 99,000 square meters.

“There is no other company in the battle royale genre that invests as consistently as we do,” said Chang proudly. “We forecast the battleground e-sports business to have a strong foothold after about 10 years of investment.”

The visionary explained that the longevity of e-sports will extend, once it is categorized as sports rather than a game. 

GENERAL ART

Looking back on his career, Chang said he did not think he’d be running an online game developer for this long. 

“Since I spent the last 15 years acquiring the industry know-how, I will run a game company for the rest of my life without a doubt,” the 49-year-old said.

When he started Krafton, he was taken aback by how different the gaming sector is from the other internet-tech businesses he had been involved in. 

“In essence, an online game encompasses all aspects of art,” he said. “You have to understand all the sides of the human race – from the logical and rational to the emotional and instinctive.”

Write to Il-Hun Cho, Seung-Woo Lee at leeswoo@hankyung.com
Jee Abbey Lee edited this article.