Gacha Game Controversy: Japanese Developer Faces Backlash Over Sky-High Salaries Amidst Puzzle & Dragons’ Rapid Decline
By The creators of Puzzle & Dragons, Gung Ho, have come under scrutiny from their shareholders, who have raised concerns about the excessively high salary of the company president and poor returns on their investments.
Strategic Capital, an investment advisory agency, has filed a report on behalf of shareholders urging Gung Ho to “improve its performance” while highlighting a range of issues (thanks to Automaton).
Most notably is the salary of president Kazuki Morishita, who received 340 million yen (£1.77 million) in 2023. This figure is quite similar to that of Nintendo’s president Shuntaro Furukawa (360 million yen) and exceeds comparable amounts at Square Enix, Sony, Capcom, Konami, and Bandai Namco.
This is despite Gung Ho depending on the mobile gacha game Puzzle & Dragons – its top performer – for revenue since its release in 2012, even with a revenue decline starting in 2014. In fact, the report indicates that Gung Ho’s profits have been less than a tenth of Nintendo’s, even though their presidents share similar wages.
Although the company has launched 20 games since 2012, including titles based on popular intellectual properties from Disney and Yo-kai Watch, it appears that Gung Ho has not managed to break free from its reliance on Puzzle & Dragons.
The report estimates that Gung Ho has invested over 100 billion yen in developing new titles, but these collectively generated under 10 billion yen in return.
In summary, Gung Ho continues to rely on a single, slowly waning popular game, has faced difficulties in launching another hit, and is headed by a president receiving an exorbitant salary that greatly surpasses company earnings. Tensions are now arising between the company executives and shareholders.
Gung Ho did achieve significant success with Puzzle & Dragons, a free-to-play match-three puzzle game that was the first mobile title to surpass $1 billion in revenue. In Japan, Nintendo even signed off on a Mario-themed version of the game for 3DS.
Strategic Capital’s report suggests