GungHo made $118m in April alone, market cap exceeds Nintendo
Puzzle & Dragons earning $3.75m a day, stock jumps 28.8 per cent
The incredible growth of Puzzle & Dragons developer GungHo Entertainment continues apace, as strong revenue in April pushed its market cap past Nintendo.
According to the company's latest financial report, translated by the prominent Japanese analyst Dr. Serkan Toto, GungHo made ¥12 billion ($118m/£76m) in revenue in April alone - that's a year-on-year increase of 1,142 per cent.
And the vast majority of that money came from a single game: Puzzle & Dragons, the company's mobile smash hit, earned $113 million in April - more than $3.75 million a day. The game now has 13 million players in Japan alone, which is 10 per cent of the country's population.
In the quarter ended March 31, 2013, GungHo posted revenue of ¥30.9 billion, up 800 per cent year-on-year. Operating profit for the period was ¥18.6 billion ($183m/£119m), an increase of 7,400 per cent over the prior year quarter.
The impact of these results on the company's stock has been immediate and huge. According to Dr. Serkan Toto, GungHo's share price increased by 28.8 per cent in "just a few minutes" of trading on the Osaka Stock Exchange today until it was bid-only, finally settling on ¥1,342 million per share.
This puts GungHo's market cap at ¥1.54 trillion, the equivalent of $15.1 billion - just above Nintendo's $15 billion market cap and closing in on Activision Blizzard's $16.7 billion.
The new Electronic Arts, Activision and Ubisoft?
Some of you need to realize that we have a finite number of people on Earth. Eventually, mobile and tablet acquisition rates will hit a saturation point and the rate of increase quarter to quarter and year to year will drop.
Granted that still gives you a huge market to work with but much of these valuations are based on growth potential rather than sustainability. Once that saturation point starts to show itself, values will drop and drop hard.
With approaching 2 billion smartphones already in use as we head for a 7 billion total we can now reach vastly more people with our entertainment than ever before. Instant global digital distribution is a revelation. User metrics and games as a service give clever people the opportunity to make a game that just keeps on earning and entertaining.
It is eminently possible, with the right people, to go from zero to a billion+ dollar valued company in less than 12 months. We live in exciting times.