Gravity Profile
Gravity Co., Ltd. (Gravity) operates as an online and mobile games developer and publisher in Korea. The company is a subsidiary of GungHo Online Entertainment, Inc. (GungHo).
The company generates revenue from online games, mobile games, and other sources (including character based merchandise and animation).
The company's principal mobile games, Ragnarok Origin, Ragnarok M: Eternal Love, and Ragnarok X: Next Generation accounted for 35.5%, 20.1%, and 16.7%, respectively, of its total revenues for the year ended December 31, 2022. The company intends to continue to diversify its product offering by developing online and mobile games in-house or through outsourcing, as well as publishing additional games developed by third parties.
Online Games
Online games are a genre of computer games in which a large number of players interact with one another within a virtual game world.
Ragnarok Online
Ragnarok Online is an action adventure based Massively Multiplayer Online Role-Playing Game (MMORPG) that combines cartoon-like characters, community oriented themes, and combat features in a virtual world within which thousands of players can interact with another. By combining highly interactive and community oriented themes and features, such as marriages and organization of guilds, the company is able to create user loyalty from its users who favor games that provide social interaction in a virtual setting.
Ragnarok Online was first commercially launched in 2002 and, as of March 31, 2023, was commercially offered in 91 markets.
Gravity, either directly or through a subsidiary, operates Ragnarok Online in each geographic market other than Japan, Vietnam, Europe, Russia/CIS, and China, where a third-party licensee operates the game. In markets where the company or its subsidiary operate Ragnarok Online, its revenues are generated through micro-transaction revenue, and in markets where a third-party licensee operates the game, its revenues are generated through royalties or licensing fees. The recommended minimum PC configuration for Ragnarok Online is Intel Celeron 2.4 GHz or AMD Athlon 3000+, 512 MB RAM and 32 MB graphics card.
On December 27, 2017, the company launched Ragnarok Zero, a new version of Ragnarok Online, in Korea. New game features were introduced for Ragnarok Zero, such as updated quests, improved user interface, premium character service and new item upgrade systems. Ragnarok Online Classic, a new server of Ragnarok Online, was launched in Thailand on October 28, 2021. The game is based on the original Ragnarok Online, which was first released in 2003, and features new user interface, premium character service and upgraded content. On December 15, 2021, the company launched Ragnarok Retro, a new server of Ragnarok Online, in Indonesia. Ragnarok Retro features classic and upgraded characters, stories, and game items from the original Ragnarok Online launched in 2003.
Mobile Games
As compared to online games, mobile games, which are played on mobile phones, including smartphones, such as Google Android compatible phones and the Apple iPhone, as well as feature phones and other mobile devices, such as tablet computers, have shorter game playtimes and less complex user-game interactions.
The company develops mobile games either in-house or through outsourcing to third party developers, and it also publishes mobile games licensed from third parties. In contrast to online games, the life cycle of a mobile game is relatively short and generally lasts from six to twenty-four months while reaching its peak popularity within the first three months of its introduction, though it varies by genre. As a result, the company generates a significant portion of its mobile games revenue from the games that have been released within the recent twelve months.
Ragnarok M: Eternal Love
Ragnarok M: Eternal Love is a MMORPG which the company offers in 122 markets across Taiwan, Hong Kong and Macau, Korea, Southeast Asia, North and South America, Oceania, Japan, Europe, and Russia. The game was developed by Gravity and The Dream Network Technology Co., Ltd. (Dream Square), together with co-developer X.D. Network Inc. (Xindong). The company commenced its service for Ragnarok M: Eternal Love in Taiwan in October 2017, Korea in March 2018, Southeast Asia in October 2018, North and South America and Oceania in January 2019, Japan in June 2019, and Europe and Russia in October 2019.
Ragnarok X: Next Generation
Ragnarok X: Next Generation is a MMORPG the company offers in Taiwan, Hong Kong, Macau, Southeast Asia, and Korea. The game was developed by Gravity and Dream Square and it licensed Nuverse to commence the service in Taiwan, Hong Kong, and Macau in October 2020, Southeast Asia (except Vietnam) in June 2021 and Vietnam in September 2021. The company also directly provides the game in Korea since January 2023.
Ragnarok Origin
Ragnarok Origin is a MMORPG which the company offers in Korea, Japan, the United States, Canada, Taiwan, Hong Kong, Macau, and Southeast Asia. The game was developed by Gravity and Dream Square, together with co-developer Shanghai Rexue Network Technology Co., Ltd. The company commenced its services for Ragnarok Origin in Korea in July 2020, Japan in June 2021, the United States and Canada in November 2021, Taiwan, Hong Kong and Macau in September 2022, and in Southeast Asia in April 2023.
Other Games and Game Related Products and Services
Other Games
In addition to developing and publishing online games and mobile games, which is the company's primary business, it also provides games for gaming consoles (including handheld gaming consoles), such as the Nintendo, Xbox, and the PlayStation series. Console games are distributed in the form of a disc or cartridge (game card), or downloaded directly to a console through the Internet.
The company also provides games for IPTV.
Game Character Merchandising
In order to optimize the commercial opportunities presented by its games and their characters, the company and its licensees have been marketing dolls, stationery, food, and other character based merchandise, as well as game manuals, monthly magazines, and other publications, based on its games. The company has arrangements with CM Holdings Company to license Ragnarok Online game characters in Korea; with GungHo in Japan; with EMC Empire Multimedia Corporation in the Philippines and China; with Dream Express Co., Ltd. in Thailand; with Max Licensing & Consulting Co., Ltd. in Taiwan, Hong Kong and Macau; with Aswas Co.,Ltd. in Korea, Malaysia and the United States; with Sessom Asia Pte., Ltd. in Singapore, Indonesia and Malaysia; and with Hellomisterlee Co., Ltd. in Korea and the United States.
Other Services
In addition to its core mobile game business, Gravity NeoCyon, Inc. (Gravity NeoCyon) provides system development and maintenance services, as well as system integration services to third parties.
Markets
The company's main geographic markets in terms of revenues for the year ended December 31, 2022, were Taiwan, Thailand, Korea, and the United States.
Online Games
The company manages and distributes (directly or through its subsidiaries) online game operations in Korea, Thailand, Taiwan, Hong Kong and Macau, the United States, Canada, Brazil, Indonesia, the Middle East, the Philippines, Singapore, and Malaysia, and it works with licensees to manage and distribute its games in other markets. The company's licensees pays it an initial license fee and/or ongoing royalty payments based on a percentage of revenues generated from subscription fees and/or micro transactions of the game they service in the respective overseas markets. The license agreements may be terminated in the event of bankruptcy or a material breach by either party, including, in the company's case, in the event the licensee fails to pay royalty fees in a timely manner.
Ragnarok Online is commercially offered in the 91 markets, including Japan, Taiwan, Hong Kong and Macau, the United States, Canada, Thailand, the Philippines, Singapore, Malaysia, and others. The company or its subsidiaries manage the distribution of Ragnarok Online in each market other than in Japan, China, Russia/CIS, and 37 European countries and markets. In each of these markets, local licensees publish Ragnarok Online.
Mobile Games
With respect to mobile games, as of April 27, 2023, the company directly manages the distribution of each of Ragnarok M: Eternal Love (other than in Japan and China, where it works with a third-party licensee), Ragnarok Origin in Korea, the United States, Canada, Taiwan, Hong Kong, Macau, and Southeast Asia, and Ragnarok X: Next Generation in Korea.
Seasonality
Usage of the company's online and mobile games has typically increased slightly around the Lunar New Year holiday season and other holidays, in particular during winter and summer school holidays.
Intellectual Property
The company is the registered owner of 24 registered software copyrights to 17 games: Ragnarok Online, Ragnarok Online II, R.O.S.E. Online, Requiem Online, Ragnarok Violet, Ragnarok Angel Poring, Ragnarok Online-Uprising: Valkyrie, Arcturus, Pucca Racing, W Baseball, Dragonica, Dragon Saga, Ragnarok Online Zero, Ragnarok Spear of Odin and Triple Chain, Ragnarok Origin, Ragnarok M: Eternal Love, each of which has been registered with the Korea Copyright Commission. As of December 31, 2022, it owned 189 registered domain names, including its official Web site and domain names registered in connection with each of the games it offers. The company had 1029 registered discrete trademarks at patent and trademark offices in 66 countries as of December 31, 2022. The company registered with the Korea Intellectual Property Office, registered copyrights covering 13 game characters and six online game business model patents, in each case as of December 31, 2022.
Research and Development
The company's research and development expenses included Won 13,797 million (US$ 10,948 thousand) in 2022.
Intellectual Property Licensing
The company licenses out certain intellectual property and other rights to third party developers or to its subsidiaries for the development of new game titles.
The company licensed Ragnarok Online to Dream Square, a game developer in China, in May 2013, which led to the development of Ragnarok Prequel and Ragnarok Prequel II, a Web browser-based game. It also signed a license and development agreement with the same developer in 2015 to grant the developer the right to use the contents of Ragnarok Online to develop two mobile games, which was revised in March 2016 to grant the developer the exclusive right to develop mobile games and web games based on the contents of Ragnarok Online and distribute such games in China for five years from March 25, 2016. Such license and development agreement led to the development of Ragnarok R, RO: Idle Poring, Ragnarok M: Eternal Love, Ragnarok H5, Ragnarok Origin and Ragnarok X: Next Generation.
The company also entered into a license and development agreement with the same developer in December 2015, which granted the developer the right to develop two mobile games and one web game based on the contents of Dragonica and distribute such games in global market. The term will expire after two years from the commercial launch of such games in such markets. The company entered into a license and development agreement with Xian' Sky Online network technology limited liability Company in July 2018, which granted the developer the right to develop online game based on the contents of Dragonica and distribute such game in China. The agreement will expire after five years from the commercial launch of such game in such market.
The company entered into an agreement with Electronics Extreme Ltd., a game developer and publisher in Thailand, in February 2017 and allowed Electronics Extreme Ltd. to use the contents of Ragnarok Online to develop one mobile game and publish the game in Thailand, the Philippines, Singapore, and six other Asian countries.
In September 2019, the company granted Pin You Technology, a game developer in Taiwan, the right to use the contents of Ragnarok Online to develop one mobile game, which led to the development of Ragnarok Monster's Arena. Ragnarok Monster's Arena was commercially launched in Taiwan, Hong Kong and Macau in May 2022, in Thailand and Korea in September 2022, and in Southeast Asia, South Asia, the Middle East, and Oceania in December 2022.
The company entered into an agreement with each of Shanghai Taren Network Technology Co.,Ltd. (Taren), and Guangdong Xinghui Teamtop Interactive Entertainment Co.,Ltd. (Teamtop Interactive), both game developers and publishers in China, in July 2021 and January 2023, respectively. The company allowed Taren and Teamtop Interactive to use the contents of Ragnarok Online to develop three mobile games and one mobile game, respectively, and distribute such games in China.
Moreover, the company licenses existing intellectual property from third parties for developing new games. In September 2008, it entered into a license agreement with ICONIX, Co, LTD. (ICONIX) to develop Pororo Games, an IPTV game, based on a popular Korean television animation series Pororo: The Little Penguin. Pororo Games has been commercially offered since September 2009. In November 2015, the company entered into another licensing agreement with ICONIX, which allowed Gravity to develop and publish games for various platforms based on Pororo: The Little Penguin. In January 2018, it entered into a licensing agreement with CJ ENM Corporation (CJ ENM) to develop and publish an IPTV Game based on CJ ENM's animation series 'The Haunted House.' In January 2018, it entered into a game development agreement with Doyeon Games to outsource the development of 'The Haunted House' IPTV game. The game was launched in May 2019 in Korea.
In May 2020, the company entered into an agreement with National Basketball Association (NBA) and National Basketball Players Association (NBPA) to obtain the right to develop and publish a NBA licensed game. NBA Rise To Stardom, a Sports mobile game, was launched in Japan in November 2021. In April 2022, it entered into a licensing agreement with YoungToys, to develop and publish Kongsuni Game and Tobot V Game, Internet protocol television (IPTV), cable television and mobile games, based on YoungToys' TV animation series Kongsuni and Tobot V.
Marketing
The company employs a variety of traditional and online marketing programs and promotional activities, including in-game events, in-game marketing, and offline events.
In Korea, two independent promotional agents promote the company's online games to Internet cafes pursuant to agency agreements. Under these agreements, each promotional agent is granted non-exclusive promotion rights within a specified geographical area.
The company conducts a variety of marketing programs and online and offline events to target potential subscribers. Its main marketing efforts include advertising on Web site portals and game magazines, conducting online promotional events, participating in trade shows, and entering into promotional alliances with Internet service providers.
The company frequently organize in-game events, such as card exchange events for its users. It also hosts fortress raid events. The company also hosts from time to time in-game tournaments in which users can compete against each other either as a team or individually. In addition, it uses in-game events to introduce users to new features of its games. The company organized 515 in-game events for Ragnarok Online users in 2022.
In most of the company's overseas markets, marketing activities are principally conducted by its licensees and typically consist of advertising on Web site game portals and online game magazines, and through television commercials, as well as hosting online and offline promotional events.
Game Support and Customer Service
The company is committed to providing superior customer service to its users directly and through its licensees. In Korea, the company provides customer service for its online and mobile games through bulletin boards of the Web sites of its online and mobile games, call centers, email, facsimile and at its walk-in customer service center. The company's bulletin boards of the Web sites of its online and mobile games allow its customers to post questions to, and receive responses from, other users and its support staff. In its overseas markets, the company's licensees administer customer service through varying combinations of bulletin boards of the Web sites of its online and mobile games, call centers, email and facsimile, with assistance from time to time from its overseas customer support staff.
In addition to providing customer service to its users, its customer service staff collects user comments with respect to the company's games and generate daily and weekly reports for its management and operations that summarize important issues raised by users as well as how such issues have been addressed.
Competition
The company competes with companies that specialize in developing and/or distributing mobile games, including leading Korea-based publishers, such as NCSoft Corporation; Nexon Co., Ltd.; Netmarble Corp.; and Kakao Games Corp., as well as foreign publishers, such as Tencent Holdings Ltd.; NetEase Inc.; Mihiyo Games; and Playrix Holding Ltd.
The company also competes against PC and console-based game developers that produce popular package games, such as Activision Blizzard, Inc. and Electronic Arts Inc., and game console manufacturers, such as Microsoft Corporation, Sony Interactive Entertainment Inc., and Nintendo Co., Ltd., all of which also have their own console game development studios.
The company's competitors for mobile games also include package game companies that have successfully expanded their business into mobile game development, such as Electronic Arts Inc.
Laws and Regulations
Under the Act on Consumer Protection for Transactions through Electronic Commerce, the company is required to take necessary measures to maintain the security of consumer information related to its electronic settlement services.
The company is classified as a value-added telecommunications service provider such that it is required to prepare and submit statistical reports regarding, among others, the status of facilities, subscription records and status of users to the Ministry of Science, ICT (MSIP) upon its request. The MSIP is responsible for compiling information and formulating telecommunications policies under this Telecommunications Business Act. In addition, the company is required to report any transfer, takeover, suspension, or closing of its business activities to the MSIP.
History
Gravity Co., Ltd. was founded in 2000. The company was incorporated as a company with limited liability under Korean law in 2000.
