GungHo: growth has slowed down, are losses ahead?

The financial growth of GungHo has significantly decreased, as it became clear from the published financial statements for 2014. Does this mean that difficult times are coming for the Japanese industry giant?

During the fiscal year, which for GungHo ended simultaneously with the calendar year, the company earned $1.45 billion. Operating income amounted to $792 million. This is only 6% and 3.3%, respectively, more than last year and significantly differs from the indicators that the company issued at the peak of the popularity of its hit Puzzle & Dragons.

GungHo is still a “one-game company”, no matter how strange it may sound in relation to a corporation whose revenue is estimated in billions of dollars. Unlike King, which was in a similar situation not so long ago, GungHo has not yet appeared a project to replace Puzzle & Dragons. Moreover, the 33 million audience of the game is almost two-thirds Japanese: the company made attempts to enter the world market with the help of Supercell, but it did not bring significant changes.

It is impossible to ignore the fact that the game on which GungHo relies in its development is still a success in Japan. So, in Google Japan, the Puzzle & Dragons query is the seventh most popular. However, this is not enough to be sure of a cloudless future.

Investors seem to be of the same opinion. The value of GungHo shares decreased by 45% from June 2014 to February 2015 – from ¥766 to ¥417.

So, what are GungHo’s options? Apparently, the only way out is to create a new IP.

A source: http://www.gamesindustry.biz

Other materials on the topic:

• Half of the revenue of the Japanese mobile games market is accounted for by GungHoGungHo earns not only on Puzzle & Dragons
• GungHo sells Supercell shares and promises to focus on Asian market
• GungHo (also known as GungHo Online Entertainment) is a Japanese gaming company founded in 1998 by one of the largest Japanese telecommunications companies SoftBank and retailer onSale Inc.

Before the release of Puzzle & Dragons, it was mainly known for hosting Ragnarok Online servers