GungHo Targets Overtaking Nintendo as World’s Top Game Maker

Photographer: Tomohiro Ohsumi/Bloomberg

Kazuki Morishita, chief executive officer of GungHo Online Entertainment Inc. Close

Kazuki Morishita, chief executive officer of GungHo Online Entertainment Inc.

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Photographer: Tomohiro Ohsumi/Bloomberg

Kazuki Morishita, chief executive officer of GungHo Online Entertainment Inc.

GungHo Online Entertainment Inc. (3765), maker of the most popular game for Apple Inc. (AAPL) iPhones, aims to surpass Nintendo Co. (7974) as the biggest game developer by extending the success of its “Puzzle & Dragons” to other titles.

“I want to top Nintendo’s sales by the time I retire,” Chief Executive Officer Kazuki Morishita, 39, said in an interview in Tokyo yesterday.

While GungHo’s revenue of 30.9 billion yen ($307 million) in the three months ended March was about a third of Nintendo’s, the company’s sales surged more than ninefold in the period compared with a 1 percent rise for its larger rival. That growth is underpinned by “Puzzle & Dragons,” a role-playing game that is free to play while encouraging participants to buy and collect characters.

“I want to make people think whatever GungHo does is fun,” like they do at Nintendo, Morishita said. “I respect Nintendo.”

Shares of GungHo have risen more than 13-fold in 2013, compared with a 10 percent gain in Nintendo. For two days this month, the company’s market value overtook that of Kyoto-based Nintendo.

GungHo fell 5.3 percent to 1.135 million yen on the Osaka Securities Exchange’s Jasdaq market. The stock has fallen 27 percent from a record close of 1.55 million yen on May 14.

Photographer: Tomohiro Ohsumi/Bloomberg

With the 3DS version, “we are targeting children in a bid to increase lifetime customers,” said Kazuki Morishita, chief executive officer of GungHo Online Entertainment Inc.. “We want to sell at least 1 million units just like any other titles we target.” Close

With the 3DS version, “we are targeting children in a bid to increase lifetime... Read More

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Photographer: Tomohiro Ohsumi/Bloomberg

With the 3DS version, “we are targeting children in a bid to increase lifetime customers,” said Kazuki Morishita, chief executive officer of GungHo Online Entertainment Inc.. “We want to sell at least 1 million units just like any other titles we target.”

3DS Expansion

Operating profit surged 75-fold to 18.6 billion yen in the three months ended March from 248 million yen a year earlier, Tokyo-based GungHo said May 9.

“Puzzle & Dragons,” which is also the top-seller for smartphones using Google Inc.’s Android software, was the world’s top-grossing game app for smartphones in March, according to the App Annie Index, which measures revenue and downloads.

The app was downloaded 14 million times as of May 18 since it debuted in February 2012, the company said in a statement today. It generated first-quarter sales of $3.4 million a day.

GungHo plans to introduce the game for Nintendo’s 3DS handheld player later this year, it said last month.

With the 3DS version, “we are targeting children in a bid to increase lifetime customers,” Morishita said. “We want to sell at least 1 million units just like any other titles we target.”

GungHo became a unit of SoftBank Corp. (9984) in April.

SoftBank, controlled by billionaire Masayoshi Son, is Japan’s third-largest mobile phone operator. It owns stakes in more than 900 publicly traded and closely held Internet companies, including GungHo, Yahoo Japan Corp. and Alibaba Group Holding Ltd.

GungHo Chairman Taizo Son is a brother of SoftBank’s Masayoshi Son.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Takashi Amano in Tokyo at tamano6@bloomberg.net; Grace Huang in Tokyo at xhuang66@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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