Krafton, a South Korean gamemaker known for its smash-hit title PUBG: Battlegrounds, said on Thursday its third-quarter net profit tumbled due to foreign exchange losses.

The company posted 121.4 billion won ($86.9 million) in net profit for the July-September period, down 42.6 per cent from a year earlier, according to a regulatory filing.

Its operating income rose 71.4 per cent year-on-year to 324.4 billion won and sales expanded 59.7 per cent to 719.3 billion won.

The earnings failed to meet market expectations. The average estimate of net profit by analysts stood at 239.2 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Krafton attributed the sharp decline in net profit to non-operating losses from currency fluctuations.

But the constant popularity of its flagship Battlegrounds contributed to a stellar performance in sales and operating profit in the third quarter.

For the first three quarters of the year, Krafton’s cumulative sales reached 2 trillion won and operating profit totalled 967 billion won, both of which exceeded last year’s full-year revenue and operating profit.

The company said it has made 13 investments in game studios in the first nine months of this year to discover new game sources or intellectual properties.

“Various services based on the PUBG: Battlegrounds (hereinafter referred to as PUBG) IP are showing remarkable growth in all areas, including sales and traffic,” said Krafton CFO DK Bae in a statement.

“The AI technology that we have developed through continuous investment and research has entered the implementation stage and is ready to have a full-scale roll out through various services,” Bae added.

In the Indian market, traffic continues to rise for Battlegrounds Mobile India (hereinafter referred to as BGMI) due to successfully expanding new users and providing localised content, said the company.

BGMI is enhancing accessibility for the Indian users by expanding local languages for non-Hindi speakers and hosting large-scale Esports tournaments, which further increases traffic in India, it added.