Puzzle & Dragons developer Gung Ho has come under fire from its shareholders, who have complained about the extremely high salary of its president and poor returns on their investments.
Strategic Capital, an investment advisory firm, has submitted a report on behalf of company shareholders requesting Gung Ho “up its game” as it highlights a number of issues (thanks Automaton).
The biggest is the salary of president Kazuki Morishita, who received 340m yen (£1.77m) in 2023. That’s similar to the total remuneration of Nintendo president Shuntaro Furukawa (360m yen), and above similar figures at Square Enix, Sony, Capcom, Konami, and Bandai Namco.
Puzzle & Dragons Official Trailer
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That’s despite Gung Ho relying on mobile gacha game Puzzle & Dragons – its biggest hit – for revenue since its release in 2012, despite its revenue declining since 2014. Indeed, the report states Gung Ho has made less than a 10th of Nintendo’s profits, despite their presidents having similar salaries.
While the company has released 20 games since 2012, including based on popular IPs from Disney and Yo-kai Watch, the company has reportedly not been able to shake its dependence on Puzzle & Dragons.
The report estimates Gung Ho has spent over 100bn yen developing new titles, but these have collectively earned less than 10bn yen.
Image credit: Strategic Capital
To summarise, then, Gung Ho has a single but gradually fading hit game, has struggled to release another success, and is led by a president taking home an extortionate salary that far exceeds company profits. And now there’s friction between company leaders and shareholders.
Gung Ho did see huge success with Puzzle & Dragons, a free-to-play match-three puzzle game that was the first mobile game to gross $1bn in revenue. In Japan, Nintendo even licensed a Mario-themed version of the game for 3DS.
Strategic Capital’s report suggests reform by going private and a review of the remuneration system. It also states the company has “excessive” cash reserves, which (unlike Nintendo) is viewed negatively due to low value.
