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GungHo Worth More Than Nintendo: “Social Gaming Won!”



Japanese gamers have been stunned to learn that the market cap of Puzzle & Dragons maker GungHo now exceeds that of Nintendo, prompting both despair and incredulity and perhaps explaining about the Japanese gaming industry’s rapid decline into idolising card and puzzle games for phones.

GungHo Online Entertainment, now known almost exclusively for Puzzle & Dragons but also once famed as the creator of Ragnarok Online and perhaps not coincidentally run by the brother of SoftBank founder Masayoshi Son, recently made headlines after their stock appreciated so rapidly that the market capitalisation of the company exceeded that of Nintendo.

Nintendo narrowly has since narrowly recovered its lead with GungHo now standing at at 1.615 trillion yen to Nintendo’s 1.63, but the two appear likely to be trading places for some time (or at least until GungHo crashes or incites further speculative mania):


Social gaming competitors Gree and DeNA are worth a pathetic 0.23 and 0.33 trillion respectively, whilst Sega is still worth 0.76.

Sony currently stands at 2.1 trillion, so there is still a chance that the unthinkable will happen.

So great was the frenzy of buying that the exchange ordered a temporary halt to trading of their shares after they appreciated 28.8% to ¥1,342,000 each over the week, and presently trade at ¥1,470,000.

Puzzle & Dragons itself, a F2P “puzzle RPG” themed social game (although its creators insist it is an “online game”) for the Android and iOS platforms, has enjoyed huge success, now having racked up over 11 million downloads and, amazingly, the CEDEC Game Design Award for 2012.

The title’s ground-breaking gameplay in more detail:

GungHo’s stock has sky-rocketed an incredible 8000% in the last year on the back of this and little else:


This has prompted more sensible observers to wonder just when and how spectacularly Japan’s social gaming bubble will burst, not least with fellow Japanese social gaming giants Gree and DeNA having already suffered huge collapses in stock valuation:



The fate of Zynga also tends to suggest they may be somewhat behind the barbarian markets, but catching up fast:


Online there is near near universal loathing for social games and incomprehension over why anyone would play them, let alone spend millions of yen a month on them as the top ranked players reportedly do – along with more than a little concern at the toll a social gaming bubble could take on the already enervated Japanese gaming market:

“Are social games the only ones making money these days?”

“Yes yes. If they are still around in 20 years I’ll hand it to them.”

“What is even fun about these monthly billed games anyway?”

“It is not like they are competing with Nintendo in the first place though.”

“Hardly. The Wii and DS had all the light users, but now they have been taken by Gree, Mobage and GungHo.”

“Compared to the likes of Nintendo trust in their brand is nothing. It’ll be fun watching how far they fall when it comes.”

“Wasn’t it Gree who were bragging ‘we know how to destroy Nintendo?’ – and GungHo came along and did it before them…”

“Poor Gree…”

“GungHo is doing great even as Nintendo is on the way down! I remember when everyone was bashing RO, but it seems they knew what they were doing.”

“Remember, Nintendo’s market cap has really shrunk in the last few years.”

“Puzzle Dragon’s growth is spectacular, but with no real characters or anything it will be extremely tough maintaining its popularity a few years on. They have no Mario, Pikachu or Zelda type characters to market or create new works with.”

“Shame Nintendo didn’t buy them when their stock was worth something.”

“The whole marketing strategy is something they perfected with RO a decade ago. But back then there weren’t all these hordes of commoners and casuals ready to pile in. They just managed to hook all the commoners with smartness into the whole online gaming thing, so it’s big.”

“GungHo at present: RO is long since finished, and just mocks its remaining users now. ECO: has the best average per-user expenditure in the industry. PazuDora: Has users spending on a vast scale. Keri Hime Sweets: easy to manage if with light users.

“No, I don’t see any commoners playing a masochistic game like RO somehow…”

The only people bashing GungHo these days are bitter old RO players!”

“And yet RO2 sunk without trace.”

“I am saying there is something wrong with this whole picture. No normal investor should touch this stock unless they want to get seriously burned, it is in the throes of a massive speculative bubble. Puzzle & Dragon was made by a team of 20, is a 20 man department worth a trillion yen? Something is obviously wrong here.”

“Right, it is pretty obvious.”

“The whole stock valuation is 100% speculative at this point. I don’t want to get burned, no way would I touch it.”

“At this very moment a great many developers are getting orders from their bosses to ‘make something like Puzzle & Dragons,’ count on it.”

“SoftBank capped out at 20 trillion yen in 2000. Now they are worth 5, it’s the same pattern.”

“They got a hit with RO, then slumped, now they have a hit with PazuDora, and got pumped.”

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