Financial

Management Policies Under New Management Structure

1 February 202611 pages1,300 words

Summary

GungHo Online Entertainment’s 2026 management policy outlines a strategic leadership transition designed to accelerate global growth and enhance capital efficiency. Under the new structure, former CEO Kazuki Morishita transitions to a role focused exclusively on game development and pipeline expansion, while Kazuya Sakai, formerly the CFO, assumes the role of Representative Director, President, and CEO. This shift aims to balance creative output with disciplined financial management and improved dialogue with the equity market. The strategy focuses on four primary pillars: realizing global hit products, optimizing company-wide costs, strengthening the collaborative relationship with subsidiary Gravity, and promoting capital market-attuned management. A key operational priority is restoring the frequency of IP collaboration events, which saw a significant decline in FY2025, to drive stable revenue. Additionally, the company is implementing a new HR system and cost-benefit analysis framework to improve resource allocation and talent development. Financially, the policy introduces aggressive shareholder return measures and a refined cash allocation strategy. GungHo has established a new dividend policy based on a 4% Dividend on Equity (DOE) ratio, targeting a minimum payout ratio of 50%. For FY2025, the company scheduled an ordinary dividend of 90 yen per share, a significant increase from 60 yen in FY2024. Furthermore, the company announced a 5 billion yen share buyback and the cancellation of approximately 23.1% of its outstanding treasury shares. The scope of this policy covers the company’s global operations with a specific emphasis on the Japanese market and its relationship with Gravity’s Ragnarok IP. Of the approximately 70 billion yen in non-consolidated cash and deposits, 50 billion yen is earmarked for development and maintenance over the next five years, with the remaining 20 billion yen split between growth investments, such as M&A, and shareholder returns. Governance is also being strengthened by increasing the proportion of independent outside directors to 50%.

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