GungHo Online Entertainment reported a 70% drop in net income for the nine months ended September, underscoring the challenge of sustaining growth when almost entirely dependent on a game launched in 2012. The Tokyo-based developer posted net income of ¥2.89 billion ($18.9 million) compared with ¥9.71 billion a year earlier.
Revenue declined 3.8% to ¥73.6 billion ($481 million) while operating profit collapsed 63% to ¥5.87 billion ($38.3 million) for the period. The results reflect weakening performance from Puzzle & Dragons, which still accounts for the majority of the company’s sales despite a steady erosion in user spending.
GungHo attempted to broaden its audience through promotional events including a six-city offline tour and esports competitions, but these efforts failed to reverse the game’s declining trajectory. The company launched Puzzle & Dragons Zero in May, though it provided no revenue figures for the new title.
The company announced Let It Die: Inferno at Tokyo Game Show in September for December release, while subsidiary Gravity contributed through new Ragnarok titles in Taiwan, Hong Kong, Macau and South Korea. However, these newer properties remain minor compared to Puzzle & Dragons’ historical dominance.
GungHo declined to provide full-year guidance, citing the difficulty of forecasting results in its “highly volatile” content business—a position that may frustrate investors seeking greater transparency.
