Puzzle & Dragons

FY2019 Financial Results Briefing

GungHo Online Entertainment, Inc. 2020.2.13 (Tokyo Stock Exchange First Section-3765) Table of Contents

1 Creation of New Values

2 Partner Publishing

3 Maximization of Existing Values

4 Subsidiary’s Business

5 Summary of Results for FY2019

1 Creation of New Values

2 Partner Publishing

3 Maximization of Existing Values

4 Subsidiary’s Business

5 Summary of Results for FY2019

© GungHo© GungHo Online Online Entertainment, Entertainment, Inc. Inc. All AllRights Rights Reserved. Reserved. © GungHo Online Entertainment, Inc. / Puzzle & Dragons Project 2019, TV Tokyo © ガンホー・オンライン・エンターテイメント/パズドラプロジェクト2019・テレビ東京 The Nintendo Switch logo and Nintendo Switch are trademark of Nintendo. Nintendo Switchのロゴ・Nintendo Switchは任天堂の商標です。

Exhilarating puzzle action Spectacular 3D characters

Title : Puzzle & Dragons GOLD Release date : January 15, 2020 Category : Battle Puzzle Action Platform : Nintendo SwitchTM Three elements that can be enjoyed by all levels, Price : JPY 1,500 (tax included) from beginners to advanced players

© GungHo Online Entertainment, Inc. All Rights Reserved. © ガンホー・オンライン・エンターテイメント/パズドラプロジェクト2019・テレビ東京 With “Puzzle & Dragons GOLD,” we will bring in young players with the aim of establishingNintendo Switch aのロゴ・ longNintendo-term Switch は任天堂の商標です。IP

Holding a steady stream of in-game events such as the addition of new characters

• Distributed as a mobile title for global deployment Title：TEPPEN • Achieved over 4 million downloads through Category：Ultimate Card Battle advertisements using streamers and Price：Free with in-app purchases TV commercials in Japan Platform：iOS, Android Release date： North America, Europe – July 4, 2019 Asia Pacific, Japan – August 8, 2019

New card pack expansions Online competitions Google Play Best of 2019 Best Innovative Game Award

[Distribution area] North America: United States, Canada Europe: England, France, Spain, Germany, Italy © GungHo Online Entertainment, Inc. All Rights Reserved. ©CAPCOM CO., LTD. ALL RIGHTS RESERVED. Asia Pacific, Japan: Korea, Taiwan, Hong Kong, Macau, Malaysia, Philippines, Thailand, Singapore, Indonesia, Australia, Japan ©CAPCOM U.S.A., INC. ALL RIGHTS RESERVED.

Active hosting of e-sports events • We have expanded awareness and the user base by participating in game events in Japan and overseas, including the hosting of the "TEPPEN WORLD CHAMPIONSHIP 2019" global competition • We have also supported e-sports events held by users • We raise awareness for our games and how to play them by holding e-sports events and supporting the card-game community

We also participated in "EVO Japan TEPPEN WORLD CHAMPIONSHIP 2019 2020," "Monster Hunter Festa '19-'20," and "RAGE 2019"

Title : Ninjala Category : Ninja Gum Action (Multiplayer action) No. of Players : Up to 8 players Platform : Nintendo Switch Release Date : 2020 Spring

Currently in intense development in preparation for a spring 2020 release The Nintendo Switch logo and the Nintendo Switch are trademarks of Nintendo Co. Ltd.

About New Pipelines

9 New Pipelines

for Smartphones

for Consoles

1 Creation of New Values

2 Partner Publishing

3 Maximization of Existing Values

4 Subsidiary’s Business

5 Summary of Results for FY2019

© GungHo Online Entertainment, Inc. All Rights Reserved. © Gravity Co., Ltd. & Lee MyoungJin(studio DTDS). All rights reserved. 12 Steady Sales from Continuous Events Continuous execution of updates and holding of seasonal events

• We provide constant entertainment for a variety of Title : Ragnarok Masters users through continuous updates and seasonal Category : RPG for everyone events that allow for long-term enjoyment Price: Free in-app purchases • Sales have been steady due to the continuous Platform : iOS, Android holding of events Release date : June 5, 2019

Implementation of new jobs and maps

Christmas event New Year's event Implementation of high-difficulty dungeons © GungHo Online Entertainment, Inc. All Rights Reserved. © Gravity Co., Ltd. & Lee MyoungJin(studio DTDS). All rights reserved. 13 Table of Contents

1 Creation of New Values

2 Partner Publishing

3 Maximization of Existing Values

4 Subsidiary’s Business

5 Summary of Results for FY2019

Hosting of P&D Appreciation Celebration and year-end events We have continuously implemented various measures to provide existing, new, and inactive users with the ability to continue playing

We held the 2nd "P&D Appreciation Celebration" in November 2019 MAU has been steady due to events spanning from the Appreciation Celebration to the end of the year P&D Appreciation Celebration 2018 P&D MAU in Japan

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Various events will be held to commemorate P&D’s 8th anniversary

To commemorate P&D’s 8th anniversary, we are planning to hold various events and updates such as providing items and new dungeons.

Continuously providing new entertainment with IP collaborations and events We continuously collaborate with leading IPs to provide a ceaseless stream of new entertainment In addition to seasonal events, we are also implementing a variety of measures that can be enjoyed for a long time Collaboration events with famous IPs In-game events

We develop a variety of events for a diverse set of audiences

We offer events including e-Sports that can be enjoyed by a wide range of people

We continuously identify potential customers to make “Puzzles & Dragons” an IP that people can enjoy for a long time

e-Sports event held by the Tokyo Events for young people Metropolitan Government

TOKYO eSPORTS FESTA New Generation WHF ’20 Winter

The first subscription service for “Puzzle & Dragons” begins

The “P&D Pass,” which gives users special benefits, has started

Season system to be introduced for “Puzzle & Dragons Radar” Introduction of a season system Gacha-system to be abolished All leaders and monsters for the season will be available for purchase in the shop

New customizable leaders will make their debut Get new leaders with a season-pass purchase Costumes and poses that have been obtained as rewards during the season can be used and customized to one’s preference

1 Creation of New Values

2 Partner Publishing

3 Maximization of Existing Values

4 Subsidiary’s Business

5 Summary of Results for FY2019

Gravity’s Business

© 2018 Gravity Co., Ltd. All Rights Reserved. © 2018 Gravity Interactive, Inc. All Rights Reserved. © 2018 X.D. Global Ltd. All Rights Reserved. © 2018 Gravity Co., Ltd. All Rights Reserved. © 2018 Gravity Interactive, Inc. All Rights Reserved. © 2018 X.D. Global Ltd. All Rights Reserved.

“Ragnarok M” continues to contribute significantly to business results

Although sales have somewhat settled in each region compared to when it was first distributed, sales have remained firm in regions around the world, contributing to our business results as a major Gravity title

2017/10/12 Start of distribution in Europe and 2018/3/14 Start of distribution in Russia South Korea

2019/6/5 Start of distribution in Japan 2017/10/12 Start of distribution in Taiwan, Hong 2019/1/9 Kong, and Macau Start of distribution in North America, South America, and Oceania (43 regions)

2018/10/31 Start of distribution in Southeast Asia (11 countries)

© 2018 Gravity Co., Ltd. All Rights Reserved. © 2018 Gravity Interactive, Inc. All Rights Reserved. © 2018 X.D. Global Ltd. All Rights Reserved. Global development is strong thanks to the mobile game Ragnarok IP, which boasts world-wide popularity

Multiple new titles are also scheduled for distribution in 2020

Ragnarok ORIGIN (Mobile) Ragnarok X: Next Ragnarok Crusade: Scheduled for distribution in 2020 Generation (Mobile) Midgard Chronicle (PC) Scheduled for distribution in 2020 Scheduled for distribution in 2020

Launched in Thailand in November 2019 Launched in Southeast Asia in January 2020

Ragnarok: Spear of Odin (Mobile) Ragnarok Tactics (Mobile) The Lost Memories: The Scheduled for distribution Scheduled for distribution Song of Valkyrie (Mobile) in the first half of 2020 in the first half© 2018 Gravityof 2020 Co., Ltd. All Rights Reserved. © 2018 Gravity Interactive, Inc. All Rights Reserved. © 2018 X.D. Global Ltd. All Rights Reserved. Taiwan/Hong Kong/Macau Taiwan/South Korea Scheduled for distribution in 2020 © GungHo Online Entertainment, Inc. All Rights Reserved. 25 Table of Contents

1 Creation of New Values

2 Partner Publishing

3 Maximization of Existing Values

4 Subsidiary’s Business

5 Summary of Results for FY2019

Sales and income increased in 2019 as the downward trend in sales came to an end

<> Performance ・On a non-consolidated basis, revenue increased due to an increase in YoY sales for Puzzle & Dragons, in which demonstrated a favorable trend 2019 ・Gravity increased YoY revenue due to contributions from Ragnarok M, which expanded into new distribution areas <> ・YoY profit increased due to increased revenue from Puzzle & Dragons and contributions from Ragnarok M

Net sales Operating income (Unit: Billion yen) 112.4 101.3 92.3 92.1

46.0 34.3 26.5 28.3

2016 2017 2018 2019

Puzzle & Dragons maintains firm MAU Net sales YoY ・YoY revenue decreased due to the settlement of MAU for Puzzle & Dragons and Ragnarok M Non- ・Although MAU remained firm due to the holding of the Puzzle & Dragons Performance Appreciation Celebration and year-end events, non-consolidated revenue decreased in QoQ consolidated due to a decline in sales related to Puzzle & Dragons 2019 4Q Gravity ・Ragnarok M’s existing distribution area stabilized, causing sales to remain mostly flat Operating income ・Profits decreased due to a decline in net sales and an increase in advertising expenses YoY associated with TV commercials and hosting events QoQ ・Despite decreased advertising expenses, profits decreased due to a decline in net sales

Net sales Operating income (Unit: Billion yen) 35.07 30.33 23.60 23.36 19.05 193.5 13.00 9.31 5.03 7.43 5.06 28.4

Puzzle & Dragons continues long-term operation, and Ragnarok M remains stable due to updates

・P&D monthly active users remained at a high level. We will continue running the game for long-term enjoyment ・Gravity's Ragnarok M remains stable in existing distribution areas and multiple new titles will be distributed in 2020 Consolidate Net Sales Trend

Consolidated net sales excluding Gravity Gravity (Unit: Million yen) 35,073 35,000 30,337 30,000 25,723 12,976 25,000 23,432 10,886 23,603 23,363 1,945 22,309 21,899 20,840 20,807 2,404 19,351 20,000 19,056 6,685 5,821 2,111 6,582 6,360 6,073 4,250 6,103 15,000 23,778 10,000 21,027 22,097 18,728 19,451 17,542 15,727 15,539 16,918 14,733 14,806 13,247 5,000

0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2017 2018 2019 *Net sales indicate figure after consolidated adjustment. © GungHo Online Entertainment, Inc. All Rights Reserved. 29 GungHo Online Entertainment, Inc. IR Group, Corporate Planning Department [email protected]