Japanese mobile game developer gumi Inc. reported its revenue plummeted by more than half in the first quarter as the company shed unprofitable titles and divested a key subsidiary, though cryptocurrency holdings delivered a windfall that boosted overall profitability.
Revenue fell 52.5% to ¥1.35 billion ($9.1 million) in the three months through July compared with the same period last year, the Tokyo-based company said Thursday. Net profit surged to ¥1.25 billion ($8.4 million) from a ¥167 million loss a year earlier.
The dramatic profit turnaround stemmed largely from cryptocurrency valuation gains of ¥1.09 billion recorded as non-operating income. The gaming company has been building a digital asset portfolio, purchasing ¥1 billion worth of Bitcoin in June and announcing plans to acquire ¥2.5 billion in XRP tokens through February 2026.
gumi’s mobile gaming business bore the brunt of the revenue decline, with sales dropping 66.5% to ¥763 million as the company executed early exits from money-losing titles and transferred operations of some games to other firms. The segment posted an operating loss of ¥93 million, reversing from a ¥5 million profit previously.
The company also completed the sale of subsidiary Alim during the period, further reducing traditional gaming revenue streams.
Its blockchain and entertainment division provided a bright spot, with revenue rising 4% to ¥590 million. Operating profit in the segment jumped 177.5% to ¥165 million, driven by the launch of “Phantom of Kill – Alternative Imitation” under its OSHI3 blockchain gaming project and income from cryptocurrency holdings.
The results reflect gumi’s strategic pivot toward blockchain gaming and digital assets as traditional mobile gaming faces intensifying competition in Japan. Mobile gaming continues to dominate Japan’s gaming market, accounting for approximately 60% of total revenue, though growth has slowed.
Japan’s blockchain gaming market is projected to grow at a 61.2% compound annual growth rate through 2033, according to industry research, as developers seek new monetization models through player-owned digital assets.
gumi maintained its practice of withholding full-year guidance, citing rapidly changing market conditions in both gaming and blockchain businesses that make accurate forecasting difficult.
Despite the revenue pressure, operating profit rose 11% to ¥72 million as cost-cutting measures, including reduced outsourcing and advertising expenses, partially offset the sales decline.
