Consolidated Financial Results for FY 2021: Supplementary Material

Key insights

6 takeaways

01
GungHo Online Entertainment reported FY 2021 net sales of 104,626 million yen, a 5.8% year-over-year increase.See it on page 1
02
Operating profit grew by 8.8% to 32,802 million yen, resulting in an improved operating profit margin of 31.4%.See it on page 1
03
The company successfully offset a 12.1% increase in selling, general, and administrative expenses, driven by higher advertising and personnel costs.See it on page 6
04
Flagship title Puzzle & Dragons maintained a stable monthly active user base throughout 2021, nearly a decade after its initial launch.See it on page 7
05
Revenue diversification was bolstered by the global distribution of Ragnarok-related titles, specifically Ragnarok Origin and Ragnarok X: Next Generation, in Southeast Asian and North American markets.See it on page 1
06
The Nintendo Switch title Ninjala surpassed 8 million global downloads as of October 2021, supported by cross-media strategies including TV anime and merchandise.See it on page 8

Summary

GungHo Online Entertainment’s financial results for the 2021 fiscal year demonstrate a period of growth driven by the sustained performance of its flagship title, Puzzle & Dragons, and the successful expansion of its Ragnarok-related franchise. The company reported net sales of 104,626 million yen, representing a 5.8% increase over the previous year. Operating profit rose by 8.8% to 32,802 million yen, with the operating profit margin improving to 31.4%. This financial growth was achieved despite a 12.1% increase in selling, general, and administrative expenses, which were primarily attributed to higher advertising and personnel costs.

The company’s strategy centers on maximizing the lifecycle of its existing mobile titles through consistent updates, collaboration events, and community engagement. Puzzle & Dragons remains a cornerstone of the business, maintaining a firm monthly active user base nearly a decade after its initial launch. Simultaneously, the company successfully diversified its revenue streams through the global distribution of Ragnarok-related titles, including Ragnarok Origin and Ragnarok X: Next Generation, which saw strong adoption in Southeast Asian and North American markets.

Ninjala, a competitive battle action game for the Nintendo Switch, also contributed to the company’s performance by surpassing 8 million global downloads in October 2021. The company continues to leverage cross-media strategies, such as TV anime broadcasts and merchandise sales, to expand the user base for its titles. By focusing on long-term game development and responsive event management, the company has successfully mitigated the typical volatility associated with the mobile gaming market, ensuring stable, high-profit operations across its global portfolio.