Gumi Posts Profit Surge as Crypto Investments Offset Gaming Decline

Tokyo-based mobile game developer Gumi Inc. reported a sharp turnaround in quarterly profits, driven largely by gains from cryptocurrency holdings despite a significant drop in gaming revenue.

For the first quarter, revenue fell 52.5% year-on-year to $9.2 million (1.35 billion yen), mainly due to restructuring, asset sales, and weak mobile game performance. The gaming segment saw sales plunge 66.5% to $4.7 million, leading to a $630,000 operating loss after the company exited unprofitable titles, transferred some operations, and sold subsidiary Alim. Unlike past years, Gumi will focus on developing games using third-party intellectual property instead of original titles. Management withheld a full-year forecast, citing market uncertainty.

In contrast, the company’s cryptocurrency portfolio fueled strong earnings growth. Operating profit rose 11% to $491,000, while ordinary profit skyrocketed 371.1% to $8.3 million. Net income surged to $8.4 million, reversing a $1.13 million loss in the same period last year. Gumi attributed this dramatic improvement to Bitcoin gains and its plan to purchase $17 million worth of XRP. By applying mark-to-market accounting, the company recorded $7.4 million in non-operating income from its crypto assets.

Beyond crypto gains, Gumi’s blockchain initiatives also delivered growth. Revenue increased with the launch of Phantom of Kill—Alternative Imitation, the first title in its OSHI3 fan-engagement project, along with income from digital assets received through blockchain activities.

Looking ahead, Gumi emphasized that blockchain and cryptocurrency will remain central to its business strategy, offsetting the volatility in its core gaming operations. As the mobile gaming market continues to weaken, the company’s pivot toward digital assets and blockchain entertainment may define its future growth path.