Why Krafton Acquired Tango Gameworks? CEO Shares Unexpected Insights

Last month, Krafton, the developer behind PUBG, surprised the gaming world by acquiring Tango Gameworks from Microsoft. While many saw this as Krafton’s first major step into the Japanese market, CEO Changhan “CH” Kim shared a different perspective.

In an interview with Game Developer, Kim revealed that the primary motivation for the acquisition was to “preserve Tango Gameworks’ legacy and foster creativity” in the gaming industry.

Tango Gameworks, known for titles like The Evil Within, Ghostwire: Tokyo, and Hi-Fi Rush, hadn’t found major commercial success. Yet, Krafton recognized the studio’s creative potential. “Even though their games haven’t been huge hits, we saw a lot of creative ideas worth exploring, and that’s why we wanted to partner with them,” Kim explained.

Hi-Fi Rush: A Key Factor in the Deal

In addition to acquiring Tango’s talented team, Krafton secured the rights to Hi-Fi Rush, a rhythm-action game that became a major hit for Microsoft. Xbox executive Aaron Greenberg described it as a “breakout hit,” after the game attracted 2 million players in its first month.

“Because fans are eager for more Hi-Fi Rush, we negotiated with Tango’s parent company to acquire the IP,” Kim said.

Interestingly, Krafton didn’t acquire Tango’s entire catalog of IP, including The Evil Within and Ghostwire: Tokyo. Kim explained, “If we had acquired all the IPs, it would have made the deal too complicated.” Instead, the focus remained on Hi-Fi Rush, which Krafton believed was most important to the fanbase.

Krafton also retained around 50 of Tango’s 100 employees to keep the studio alive, with Kim expressing the company’s commitment to expanding the team. “Our goal is to scale the team back up to around 100 people,” he noted, hinting at future growth for the studio.

Behind the Scenes: The Financials and Urgency of the Deal

Kim described the acquisition as a “last-minute deal” triggered by the sudden closure of Tango Gameworks by Microsoft in May, which left employees in limbo. Krafton acted quickly to finalize the purchase and minimize career disruption for the team.

“We wanted to make sure the deal happened fast to prevent a gap in their careers,” Kim said.

While financial details remain under wraps as the deal is finalized, Kim remarked that it wasn’t too costly. “It wasn’t too expensive or too cheap,” he said, adding that the deal’s significance far outweighed its monetary value. “It’s more about what it represents than the price.”

Krafton’s Long-Term Strategy: A Broader Vision

The acquisition of Tango Gameworks aligns with Krafton’s broader strategy of diversifying its portfolio. “We’re looking to expand our lineup, and Tango fits perfectly into that plan,” Kim said.

In a refreshingly honest comment, Kim admitted, “We don’t expect Hi-Fi Rush 2 to make us a lot of money, to be frank.” However, the CEO emphasized that taking creative risks is vital in the hit-or-miss gaming industry.

This risk-taking approach is already evident in Krafton’s recent ventures, including the KIGI incubator program in India and recent investments in non-gaming sectors like Spoon Labs, a short-form content platform.

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