Brave Frontier publisher Gumi cuts 11% of staff following IPO
Gumi hasn't had as much success outside of Japan as it expected, CEO not to receive pay for six months
With Brave Frontier driving tons of revenue for Gumi in Japan, this past December the company held an IPO worth 45 billion yen ($377 million), making it one of Japan's largest IPOs during 2014. Now just three months later, the publisher is laying off 11 percent of its workforce, according to Reuters. About 100 employees will be leaving next month; in January Gumi had 901 employees.
Apart from a workforce reduction, Gumi is planning to sell some assets to help it recover from losses it expects this financial year. Specifically, Gumi said it was offering buyouts to employees and selling assets related to a couple games for older mobile phones, as well as for two of its browser-based games, including Dragon Genesis.
The company recently surprised its shareholders by forecasting an operating loss for the 12 months ending on April 30. Gumi is expecting an operating loss of 400 million yen ($3.4 million) compared to a previous forecast of a 1.3 billion yen profit. The bad news had an immediate impact on Gumi's shares, as they plummeted to a low of 1,282 yen, which is less than half of its listing price of 3,300 yen at the time of the IPO.
One of the big problems for Gumi is that Brave Frontier hasn't performed as well outside of Japan, and the overseas performance of other titles did got well either. According to Tech In Asia, Gumi will be looking to strengthen its cross-border publishing operation. It's also going to be examining new monetization strategies for Brave Frontier in Japan and then try to export those strategies for the title overseas.
Importantly, Gumi founder and CEO Hironano Kunimitsu is taking responsibility for the disappointing results and has said that he will not receive a salary for the next six months.