SEOUL, July 1 (Reuters) - South Korea"s Krafton, the company behind blockbuster video game "PlayerUnknown"s Battlegrounds" (PUBG), cut its IPO target by nearly a quarter on Thursday after a regulator warned it needed to revise its filings. The company, which counts Tencent Holdings Ltd (0700.HK) as its second-biggest shareholder, has revised the indicative price range for its 8.7 million share offering to 400,000-498,000 won per share. At the top end of the range, the offering would raise 4.3 trillion won ($3.8 billion). That compares to its previous target of as much as 5.6 trillion won which if it had been reached would have been a record for South Korean IPOs. South Korea"s Financial Supervisory Service had told Krafton last week to resubmit its paperwork though it did not disclose the reasons behind the order. Krafton, which derives 97% of its operating profit from its online multiplayer war-fighting game, said in a statement that it had discussed the matter with its advisers "so that we could receive a reasonable market evaluation." "Krafton"s initial IPO pricing was too high considering the fact that most of the company"s revenue comes from a single game," said Hwang Hyun-jun, an analyst at DB Financial Investment. "There were also some concerns about the royalties it receives from China, which led authorities to advise the company to revise down the IPO price," he said. Krafton is planning to release two PUBG-related games this year - a mobile game "PUBG: New State" and "Battlegrounds Mobile India". The company is also expanding to areas such as web-based cartoons, movies and animation. It reported 1.67 trillion won in revenue in 2020, up 54% from a year earlier and its operating profit more than doubled to 774 billion won. ($1 = 1,131.4000 won)