Krafton Subnautica 2 launch on AAA game track, earn-out payout concerns emerged; Reiterate OW

Research evidence excerpt

Krafton Subnautica 2 launch on AAA game track, earn-out payout concerns emerged; Reiterate OW

J P M O R G A N Asia Pacific Equity Research

15 May 2026

Krafton Overweight

259960.KS, 259960 KS

Subnautica 2 launch on AAA game track, earn-out Price (15 May 26):W278,500

payout concerns emerged; Reiterate OW Price Target (Dec-26):W410,000

Subnautica 2 sold 2M copies within 12 hours of its early access launch and reached Internet and Telco

AC651K PCU (inc. 468K at Steam). We view the initial sell-through and engagement Stanley Yang

as consistent with an AAA-scale launch trajectory, and we see a path to ~5-8m (82-2) 758-5712

units in 2026E. However, the share price reaction was muted (down 4.6%, vs stanley.yang@jpmorgan.com

KOSPI’s -6.1%), which we attribute to investor concerns on the maximum earn- Benjamin Kim

out payment of $250M (JPMe: 4.7M copy sales + Xbox game pass revenue). The (82-2) 758-5580

earn-out could be triggered in a way that is earnings-dilutive on a full-year basis, benjamin.kim@jpmorgan.com

J.P. Morgan Securities (Far East) Limited, Seoul

creating near-term uncertainty around the quality of the outcome. We think the Branch

earn-out structure deserves investors’ criticism on inorganic growth strategy and

can justify a valuation discount. Nevertheless, we also highlight an offsetting

positive: The IP rights/value ultimately belong to Krafton, which should help

reduce the company’s single IP discount over time. We maintain our OW rating on

the expectation of a strong PUBG IP growth cycle and undemanding valuation

(8.4x 2027 P/E).

• Subnautica 2 launched with 2M copy sales on Day 1. According to Inven

(link), Subnautica 2 reached 2 million cumulative units sold within just 12

hours of its early access launch. The game recorded 651K PCU (peak