Japanese gaming company Gumi Inc. returned to profitability after a costly restructuring that involved shuttering loss-making mobile game titles and doubling down on blockchain ventures.
The Tokyo-based developer reported net income of ¥2.06 billion ($13.9 million) for the year ended April, compared with a ¥5.93 billion loss a year earlier. Revenue declined 26% to ¥8.94 billion as the company exited unprofitable games early and transferred operations of some titles to other companies.
The turnaround came at a steep cost to Gumi’s core mobile gaming business, where revenue plummeted 40% to ¥6.45 billion ($43.6 million). Operating losses in the segment narrowed significantly to ¥118 million from ¥3.49 billion as the company slashed development and advertising expenses.
Gumi’s blockchain division drove the recovery, with revenue surging 87% to ¥2.49 billion ($16.8 million) and swinging to an operating profit of ¥489 million from a ¥1.55 billion loss. The unit benefits from token sales for its OSHI3 fan platform and the launch of “Phantom of the Kill – Alternative Imitation,” a blockchain-based role-playing game.
The company has embraced cryptocurrency investments, announcing plans in February to acquire $6.6 million worth of Bitcoin and becoming the first listed Japanese firm to validate the Babylon staking protocol.
While Gumi managed to stem losses from its traditional gaming portfolio, the dramatic revenue decline underscores the challenges facing mobile game developers in an increasingly competitive market. The company’s bet on blockchain gaming and cryptocurrency investments represents a significant strategic shift as it seeks sustainable growth beyond its legacy mobile titles.
