Sony Music Entertainment, a subsidiary of Sony Group, will acquire approximately 22.9% of smartphone game developer GungHo Online Entertainment’s outstanding shares from existing shareholders for about ¥28.6 billion, making Sony Music GungHo’s largest shareholder. The deal, announced on the 28th, is expected to be completed by year-end, or within 2026. The capital and business alliance will combine GungHo’s game development capabilities and intellectual property (IP), including Puzzle & Dragons, with Sony Music’s entertainment expertise. Plans include joint game development, new projects, film adaptations and other media expansions of GungHo titles, as well as possible use of Sony Music-owned IP in GungHo games. The investment could help Sony Music expand its proprietary game IP portfolio and give GungHo support as it seeks to reverse a prolonged performance decline. GungHo’s consolidated net profit for the fiscal year ending December 2025 was ¥1.4 billion, down 98% from its peak in the fiscal year ending December 2014. Kazuya Sakai became President in February 2026 after serving as Chief Financial Officer (CFO), and has pursued turnaround measures including ending unprofitable game titles. GungHo has not disclosed a consolidated earnings forecast for the fiscal year ending December 2026, saying that calculating reasonable figures is difficult. Investors are expected to watch for concrete results from the alliance, since its effect on earnings may take time.