GungHo Business Report Vol. 29

GungHo Online Entertainment’s business strategy focuses on four core pillars: maximizing the value of existing titles, creating new intellectual properties, expanding into new fields, and leveraging subsidiary business operations. The company’s primary objective is to cultivate long-term engagement for its flagship titles, most notably the Puzzle & Dragons series, which reached 51 million downloads in Japan and over 80 million worldwide as of early 2019. By implementing consistent updates, collaboration events, and e-sports initiatives, the company successfully reversed a downward sales trend, culminating in a significant performance increase during the fourth quarter of 2018.

The company’s growth strategy extends beyond its core mobile titles into diversified sectors. This includes the development of new games like the Nintendo Switch title Ninjala and the expansion of the Yo-Kai Watch World location-based game. Furthermore, GungHo has entered the e-sports sector through the establishment of mspo, a joint venture providing a one-stop system for mobile game tournaments. Subsidiary operations, particularly those of GRAVITY Co., Ltd., have also contributed to global growth, with the successful international rollout of Ragnarok M: Eternal Love across Asia, North America, South America, and Oceania.

Financial performance for the 2018 fiscal year reflected a stabilization of net sales, which remained consistent with the previous year at 92.1 billion yen. While operating income saw a decline to 26.6 billion yen compared to 34.4 billion yen in 2017, the fourth quarter of 2018 signaled a positive shift in revenue and income. To enhance capital efficiency and shareholder value, the company has proposed a share consolidation of one share for every ten, alongside plans for treasury share acquisitions. These measures are designed to align the company’s share structure with market standards and improve overall returns for investors.