Key facts
- Sony Music Entertainment will acquire approximately 22.9% of GungHo Online Entertainment's outstanding shares.
- The acquisition is valued at approximately ¥28.6 billion.
- Sony Music will become the largest shareholder of GungHo.
- The alliance aims to combine GungHo's IP and game development with Sony Music's entertainment expertise.
- The partnership may involve joint game development and media expansions of GungHo titles.
Sony Music Entertainment (Japan) is set to become the largest shareholder of GungHo Online Entertainment, a major Japanese smartphone game developer. The Sony Group subsidiary announced it will acquire approximately 22.9% of GungHo's outstanding shares for about ¥28.6 billion, with the transaction expected to be completed by the end of 2026.
The capital and business alliance is designed to synergize GungHo's intellectual property, including the popular game "Puzzle & Dragons," and its development capabilities with Sony Music's established expertise in the entertainment sector. Potential collaborations include joint game development, the creation of new projects, and media expansions such as film adaptations of GungHo titles. Sony Music also reportedly is considering featuring its own intellectual property within GungHo's games.
For Sony Music, this move addresses a long-standing challenge in expanding its portfolio of proprietary game intellectual property, as many of its current projects involve rights held by other publishers. This investment offers a pathway to greater control over IP for media mix development.
This alliance comes as GungHo seeks to revitalize its business performance, which has been flagging since the peak popularity of "Puzzle & Dragons." Despite management reforms, including the termination of unprofitable titles, the company has struggled to produce new hits, leading to a significant decline in net profit. GungHo has not yet disclosed its consolidated earnings forecast for the fiscal year ending December 2026, citing difficulties in calculating reasonable figures. The company's stock price has experienced a prolonged slump due to its heavy reliance on "Puzzle & Dragons."