The head of a Japanese development studio is facing criticism for paying himself a multimillion-dollar salary while his studio is steadily declining. Its only major game is struggling.
How is the studio doing? Since the steady decline of the mobile gacha game Puzzle & Dragons, the Japanese studio Gung Ho has been in a crisis. A report from an investment consulting firm presented on behalf of the studio’s shareholders highlights the problematic situation of Gung Ho. It states:
Gung Ho relies on Puzzle & Dragons (P&D), which was released in 2012 and is responsible for the majority of its revenue. However, even P&D revenues are gradually declining. Despite the release of around 20 games since P&D, including titles with popular IPs like Disney and Yo-Kai Watch, revenues have not materialized, and the company has been unable to break free from its dependency on P&D.
While the studio continues to decline due to its lack of successes, the boss of Gung Ho seems to continue living as if it were still the best of times.
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Boss earns like a Nintendo president
How much does the head of Gung Ho earn? While the studio’s revenues continue to decline, the boss still receives a salary that exceeds the company’s profits. In fact, the salary of the Gung Ho boss (340 million yen in 2023, approximately 2.15 million euros) is nearly the same as that of Nintendo president Shuntaro Furukawa (360 million yen, approximately 2.28 million euros).
The report points out: “Considering that the presidents of Gung Ho and Nintendo receive similar salaries, but Gung Ho’s profit is less than one-tenth of Nintendo’s profit, we would say that Gung Ho is not in the same league.”
How is this salary justified? The quickest and simplest answer is: Not at all – There is even more evidence that the studio is doing worse. As already mentioned, Gung Ho has not been able to achieve further major successes since Puzzle & Dragons, despite having strong IPs. The report estimates that the studio has spent over 100 billion yen developing new titles, which have collectively earned less than 10 billion yen.
In summary, Gung Ho has a single, but steadily dying hit game, struggles to develop new successful projects, and has a president who pays himself a salary as if the studio were not in trouble.
What’s next for Gung Ho? The shareholders did not commission the report without reason. It suggests a reform through privatization and a thorough revision of the compensation system. Unlike new successes of the studio, the boss’s salary is not untouchable. However, if he continues to insist on his multimillion salary, he could learn from the experience of another person: A 59-year-old earns 1.27 million euros a year from a side job and works only 1 hour a day: A “mathematical formula” makes that possible
