All data are based on the daily closing price as of October 9, 2024

GungHo Online Reports Mixed Q2 Results as Sales Rise but Profits Decline

Strong performance of core game boosts sales, but increased advertising costs impact profits
Japan
g 3765.TSE Mid and Small Cap 2000 Games 75 Tech 350 Entertainment 100
Share this on

GungHo Online Entertainment announced its consolidated financial results for the second quarter of the fiscal year ending December 2024, revealing a mixed performance. The company reported sales of 27,918 million yen (US$194 million), representing an 8.5% increase from the previous quarter but a 24.4% decline compared to the same period last year.

The core game, “Puzzle & Dragons,” was a bright spot, contributing significantly to the quarter’s sales growth. Excluding the consolidated contribution from subsidiary Gravity, sales increased by 11.4% quarter-over-quarter, reflecting a substantial 16.0% recovery compared to the same period last year. This recovery highlights the game’s resilience despite an overall sales decline of 30.8% last year due to Gravity’s outsized contribution.

However, the company’s profits did not mirror the sales growth. Operating profit decreased by 5.2% quarter-over-quarter to 5,941 million yen (US$41.3 million), with ordinary and net profits also falling by 5.3% and 4.5%, respectively. The decline in profits is primarily attributed to increased advertising expenses associated with the release of new Ragnarok-related titles by Gravity.

As the company continues to invest in these new titles, particularly “Ragnarok: Rebirth,” which launched in Southeast Asia in June, the potential impact on future quarters remains uncertain. The success of “Ragnarok Origin” in the previous quarter sets high expectations for these new releases to contribute positively to future consolidated results.

Share this on
Jakota Newsletter

Stay ahead in the JAKOTA stock markets with our roundup of vital insights

Icon scroll to top