Puzzle & Dragons

GungHo Online Entertainment: Consolidated Financial Results for FY 2018 Supplementary Material

GungHo Online Entertainment’s fiscal year 2018 financial results demonstrate a stabilization of the company’s performance, effectively halting a multi-year downward trend in sales.

• GungHo Online Entertainment stabilized its financial performance in FY 2018, with net sales remaining nearly flat at 92,101 million yen, a marginal 0.2% year-on-year decline.
• Operating income dropped 22.7% to 26,577 million yen, causing the operating income margin to contract from 37.3% to 28.9%.
• The decline in profitability was driven by a 19.2% increase in the cost of goods, largely due to the higher cost structure of the subsidiary GRAVITY and its title Ragnarok M: Eternal Love.

GungHo Online Entertainment FY2018 Q3 Financial Results Briefing

The GungHo Online Entertainment FY2018 Q3 financial results briefing outlines the company’s strategic focus on maximizing the value of existing intellectual property while expanding its portfolio through new titles and business ventures.

• GungHo’s core revenue remains stable due to consistent performance from its flagship title, Puzzle & Dragons, which continues to rely on event-based engagement and e-sports initiatives to maintain active user counts.
• The company experienced a moderate decline in Q3 revenue and operating income, driven by the stabilization of Ragnarok M sales and increased marketing spend for new product launches.
• Yo-kai Watch World achieved significant early traction, surpassing 2 million downloads by September 2018.

GungHo Online Entertainment Consolidated Financial Results for the 1st Quarter of FY 2018

GungHo Online Entertainment’s consolidated financial results for the first quarter of the fiscal year ending December 31, 2018, indicate a period of stable, flat performance.

• GungHo reported stable Q1 2018 results with net sales of 21,899 million yen, a minor decrease of 410 million yen from the previous quarter.
• Operating income increased to 6,461 million yen, up 252 million yen due to lower salary and allowance expenses following the end of a bonus cycle.
• Flagship title Puzzle & Dragons remains the primary revenue driver, reaching over 48 million downloads in Japan by March 2018.

GungHo Online Entertainment FY2018 Q1 Financial Results

GungHo Online Entertainment’s financial results for the first quarter of the fiscal year ending December 31, 2018, reflect a period of contraction in both revenue and profit.

• GungHo Online Entertainment experienced a significant financial contraction in Q1 2018, with net sales falling 14.9% year-over-year to 21.899 billion yen.
• Operating profit declined by 36.2% to 6.461 billion yen, while ordinary profit and net income attributable to owners of the parent dropped by 37.4% and 33.3%, respectively.
• The primary cause of the revenue downturn was a decline in performance from the company's flagship title, Puzzle & Dragons.

GungHo Online Entertainment FY2017 Financial Results

GungHo Online Entertainment’s financial results for the fiscal year ending December 31, 2017, reflect a period of contraction for the company.

• GungHo Online Entertainment experienced a significant financial contraction in FY2017, primarily driven by declining revenue from its flagship title, Puzzle & Dragons.
• Consolidated net sales for the fiscal year ending December 31, 2017, fell 17.9% year-over-year to 92.3 billion yen.
• Operating profit decreased by 25.4% to 34.4 billion yen, while net profit attributable to owners of the parent company dropped 19.8% to 22.4 billion yen.

GungHo Online Entertainment FY2017 Q3 Financial Results Briefing

GungHo Online Entertainment’s fiscal year 2017 third-quarter financial results reflect a strategic pivot toward global expansion and the revitalization of long-standing intellectual properties.

• GungHo reported Q3 2017 net sales of 20.8 billion yen and an operating income of 8.7 billion yen, reflecting a decline due to softening performance of its flagship title, Puzzle & Dragons.
• The company is shifting from a Japan-centric model to a global distribution strategy, highlighted by the international release of LET IT DIE, which reached 3 million downloads by mid-2017.
• To combat declining engagement, GungHo is extending the lifecycle of Puzzle & Dragons by adding real-time competitive play and expanding the Puzzle & Dragons Radar ecosystem.

GungHo Online Entertainment FY2017 Q2 Financial Results

GungHo Online Entertainment’s financial results for the second quarter of the fiscal year ending December 31, 2017, reflect a period of contraction in both revenue and profit.

• GungHo Online Entertainment reported a 20.0% year-over-year decline in net sales to 49.16 billion yen for Q2 2017.
• Operating profit fell by 27.1% to 19.44 billion yen, while net profit attributable to owners of the parent dropped 28.4% to 12.03 billion yen.
• The primary driver for the company's financial contraction was a decrease in revenue from its flagship title, Puzzle & Dragons.

GungHo Online Entertainment: Year-end Closing of Accounts for Fiscal Year Ended December 31, 2016

GungHo Online Entertainment’s fiscal year-end report for 2016 outlines a strategic pivot from a Japan-centric development model toward a global distribution strategy.

• GungHo reported 2016 annual sales of 112.4 billion JPY and an operating profit of 46.0 billion JPY, reflecting a decline driven by the softening performance of its flagship title, Puzzle & Dragons.
• The company is executing a strategic pivot from a Japan-centric model to a global distribution strategy to counter the maturation of the domestic smartphone game market.
• The survival action game LET IT DIE, released for PlayStation 4 in December 2016, reached one million downloads in North America and Europe within 26 days, validating the company's entry into the global free-to-play console market.

GungHo Online Entertainment FY2016 Financial Results

GungHo Online Entertainment experienced a period of significant financial contraction during the 2016 fiscal year, characterized by a 27.1 percent decline in net sales to 112.5 billion yen and a 36.4 percent drop in operating profit to 46.1 billion yen.

GungHo Online Entertainment FY2016 Q3 Financial Results Briefing

GungHo Online Entertainment’s third-quarter fiscal 2016 financial results outline a strategic pivot toward global market expansion and the diversification of its product portfolio.

• GungHo Online Entertainment reported Q3 2016 financial results of 25.9 billion JPY in sales and 9.8 billion JPY in operating profit, reflecting a decline in revenue compared to previous periods.
• The company is shifting its development philosophy from a domestic-first model to a universal design approach to streamline international distribution and reduce localization delays.
• Partner publishing is a core growth pillar, highlighted by the October 2016 launch of Disney Magic Kingdoms, which surpassed one million downloads within weeks.

GungHo Online Entertainment Q2 2016 Financial Results

GungHo Online Entertainment’s financial results for the second quarter of 2016 reflect a period of contraction within a highly competitive and rapidly evolving global smartphone gaming market.

GungHo Online Entertainment FY2015 Financial Results

GungHo Online Entertainment experienced a period of contraction during the 2015 fiscal year, as net sales declined by 10.8 percent to 154.3 billion yen and net income fell by 30.0 percent to 43.4 billion yen.

• GungHo Online Entertainment faced a significant downturn in FY2015, with net sales falling 10.8% to 154.3 billion yen and net income dropping 30.0% to 43.4 billion yen.
• The company remains heavily dependent on its flagship title, Puzzle & Dragons, which accounted for 88.6% of total revenue during the fiscal year.
• Management declined to provide earnings forecasts for the upcoming year, citing the volatility of the digital content sector and the maturation of the Japanese smartphone gaming market.