GungHo Business Report: Vol. 43

GungHo Online Entertainment’s business report for the 2025 fiscal year outlines a strategic transition toward global market expansion and console-based development in response to a maturing and saturated domestic mobile gaming market. The company acknowledges that its flagship title, Puzzle & Dragons, continues to perform at a stable level, but faces increasing competition for user attention from social media and other digital entertainment platforms. To counter these headwinds, the organization has implemented a new management structure effective February 2026, prioritizing capital efficiency and enhanced shareholder returns, including a dividend policy targeting a 4% dividend on equity (DOE) and a minimum 50% consolidated payout ratio.

The company’s growth strategy centers on four pillars: maximizing the value of existing intellectual properties, expanding into new fields, creating new value through global releases, and leveraging partner publishing. Key titles driving this international push include the LET IT DIE series and Ninjala, with the former’s latest entry, LET IT DIE: INFERNO, released in late 2025. Additionally, the company is scaling its console development pipeline, increasing the number of titles in development from five to nine as of 2025. The subsidiary Gravity Co., Ltd. remains a critical component of this strategy, particularly in Asia, where it has successfully scaled its annual sales from approximately 5 billion yen in 2008 to 50 billion yen through the expansion of the Ragnarok series.

Financial performance for the fiscal year ending December 31, 2025, reflects a challenging environment, with consolidated net sales reaching 93.2 billion yen and operating profit at 5.1 billion yen. Despite these results, the company maintains a strong financial position with a capital-to-asset ratio of 71.9%. Moving forward, management intends to accelerate the release of new titles and cultivate long-lasting game brands to deliver consistent value to global users while maintaining a disciplined approach to capital allocation, including the strategic acquisition and cancellation of treasury shares.