GRAVITY Co., Ltd. Annual Report: A Plain-English Guide

I have put together this guide to help you understand GRAVITY’s performance. My goal is to turn complex data into clear insights so you can decide if this company fits your investment goals.

1. The Big Picture

GRAVITY is a global gaming company built around one legendary brand: Ragnarok. They act as a "Ragnarok factory," turning this 24-year-old game into various mobile and online versions. Although based in South Korea, they trade on the NASDAQ (ticker: GRVY), making them easy to buy. Their business model focuses on licensing their brand and self-publishing games on PC and mobile, mainly in Southeast Asia, North America, and East Asia.

2. The Numbers: How They Performed

Growth this year came primarily from mobile gaming.

• Mobile Growth: Revenue from mobile games rose 12% to roughly $315 million. The launch of Ragnarok M: Classic drove this success, accounting for over 27% of total revenue in 2025.
• The "Ragnarok" Dependency: The company relies almost entirely on this one brand. About 81% of their total revenue comes from Ragnarok games. This highlights the brand’s staying power, but also means the company’s future is tied to the continued popularity of this single franchise.
• Regional Shifts: Results were mixed. While they saw big wins in Indonesia and the U.S., revenue dropped in Brazil and their home market of Korea. These shifts reflect the challenges of maintaining player engagement across diverse global cultures.

3. Financial Health & The "Mobile Tax"

GRAVITY is in a stable phase, but investors should watch their profit margins. Because they focus on mobile gaming, they pay significant fees to Apple and Google. These platform fees—usually 15% to 30% of sales—act as a "mobile tax." Even when a mobile game is a hit, the company keeps a smaller slice of the pie than they do with older PC games where they control distribution. They are effectively trading higher profit margins for the massive reach of mobile app stores.

4. The Risks

• The "One-Hit Wonder" Trap: Because they rely so heavily on Ragnarok, they have little to fall back on if players lose interest. They currently lack a diverse portfolio of other successful brands.
• Control: GungHo Online Entertainment owns nearly 60% of the company. This makes GRAVITY a "controlled company," meaning one entity heavily influences the board and company decisions, which limits the influence of smaller, individual investors.
• Regulatory & Currency Headwinds: They operate globally, so changing tax laws and currency swings can impact profits. Since they report in USD but earn in local currencies, a strong dollar can make their earnings look smaller. Additionally, they face hurdles with new tech like NFTs, which are subject to strict regulations in South Korea and other key markets.

5. The Bottom Line

GRAVITY is a mature company that knows its fans well. They successfully launch new mobile versions of classic games to keep revenue flowing. As you consider an investment, ask yourself: Are you comfortable with a company dependent on one 24-year-old brand? If Ragnarok stays popular, they remain a steady player; if it fades, the company currently lacks a clear "Plan B."

Investor Tip: Before buying, check the latest quarterly updates to see if they have announced any new, non-Ragnarok titles. A successful launch outside of their main franchise would be a strong sign that they are diversifying their business.