Top 50 Developer List for 2016

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By admin on March 29, 2016

#9: GungHo Online Entertainment

HQ: Tokyo, Japan
Sales: $1.3 billion (2015)
Headcount: c. 500
Key staff: Kazuki Morishita (CEO)
Key games: Puzzle & Dragons
Structure: Floated on the Tokyo stock exchange (TYO:3765)
M&A: Biggest recent deal was with gaming social network PlayPhone

It's now four years since the then little known GungHo Online released Puzzle & Dragons onto an unsuspecting Japanese public.

At first glance, the match-3 game provided the sort of simple mobile experience that stressed salarymen could enjoy during their daily commute. But before too long, the heritage of Japanese mobile game developers when it comes to deep, deep RPG mechanics and strong monetisation came to the fore.

For the past three years, the game - originally developed by four staff members - has generated over $1 billion annually, the vast majority of this revenue from Japan.

2015 saw GungHo working hard to expand the audience, however, with the US, South Korea and south east Asia all providing fertile if secondary markets.

Yet just as the game accounted for 89% of GungHo's $1.3 billion revenue in 2015, so Japan remains the bedrock of Puzzle & Dragons profitability.

Of course, four years on, the game is now in decline in terms of absolute player numbers and revenue, but it will remain a highly profitable platform for years to come, both in terms of versions on other consoles such as 3DS, spin-off mobile games, and for the new mobile games GungHo is launching.

Most recently, it reported new game Summons Board had done 4 million downloads in Japan, while RPG Divine Gate had done 5 million downloads.

Neither are likely to match Puzzle & Dragons' financials, of course, but the game will finally get its official release in China through market leader Tencent in 2016; and that's a market that really has the potential to reinvigorate.