Financial Results Briefing FY2025

GungHo Online Entertainment is currently undergoing a fundamental strategic pivot, transitioning from a primary focus on the domestic Japanese mobile market toward a global, multi-platform distribution model. This evolution targets North America and Europe specifically through the development of action-oriented intellectual properties for console and PC. The success of this shift is evidenced by the dramatic rise in the overseas net sales ratio, which is projected to reach 66% in fiscal year 2025, up from just 11.4% in 2016. Key drivers for this international expansion include the upcoming launch of Let It Die: Inferno and the continued global scaling of the Ragnarok and Puzzle & Dragons franchises across more than 150 countries.

Despite this aggressive geographic expansion, the company faces immediate financial headwinds characterized by a contraction in consolidated net sales and operating profit. Quarterly performance data reveals a downward trajectory over a four-year period, with peak values declining from over 16,000 to approximately 7,750 in the most recent quarter. This downturn is largely attributed to softening sales of legacy mobile titles and a reactional decrease in revenue from the subsidiary Gravity. To stabilize these core assets, the company is utilizing high-profile collaborations with major brands such as Sanrio and Digimon to maintain domestic user engagement while simultaneously preparing for the launch of Ragnarok Online 3 in major Asian markets.

The long-term outlook centers on a diversified portfolio that balances established mobile revenue with new, high-scale global releases. While current financial indicators reflect a period of contraction and volatility, the commitment to 100-player raid mechanics in upcoming titles and the expansion of Ragnarok X: Next Generation into EMEA markets signal a move toward more technologically ambitious projects. Ultimately, the transition toward a global-first strategy represents a necessary adaptation to the maturing domestic mobile landscape, aiming to replace declining legacy revenue with sustainable growth from international console and PC audiences.