GRAVITY Issues Business Updates
January 26 2016 - 6:20AM
• Termination of the license and
distribution agreement for Ragnarok Online
Ⅱ with Gungho.
GRAVITY Co., Ltd. (NasdaqCM:GRVY) (“Gravity” or “Company”)
announced today that its Board of Directors has approved a
termination of the license and distribution agreement for Ragnarok
Online Ⅱ with Gungho Online Entertainment Inc. (“Gungho”), its
majority shareholder. Gravity and Gungho entered into the license
and distribution agreement on September 29, 2006, which granted
Gungho the exclusive right to service Ragnarok Online Ⅱ in Japan.
However, Ragnarok Online Ⅱ has not yet been launched in Japan and
has had limited success in certain jurisdictions where the game has
been launched. Therefore, in relation to Ragnarok Online II in
Japan, after discussions with Gungho and due consideration, the
Company's board of directors unanimously approved the termination
of the license agreement with Gungho.
As part of the termination, US$5 million in
initial payments received from Gungho will be refunded in a manner
mutually agreed by the parties. The Company also anticipates
recognizing an impairment loss on intangible assets of
approximately Won 4,605 million, which represents the total
remaining capitalized development cost of Ragnarok Online Ⅱ.
Currently, Ragnarok Online Ⅱ is offered globally
except for Japan and China. For service in China, a new version of
Ragnarok Online Ⅱ developed by Dream Square under a license from
the Company is planned to be launched in the first quarter of
2017.
• Gravity enters into a memorandum of
understanding to license Ragnarok Online to Dream
Square.
Gravity signed a memorandum of understanding
(the “MOU”) with Shanghai The Dream Network Technology Co., Ltd.
(“Dream Square”), dated January 15, 2016.
The MOU sets forth the parties' intention for
Gravity to grant Dream Square the right to exclusively develop and
distribute in China mobile games and web games based on the
intellectual property of Ragnarok Online for 5 years. Pursuant to
the MOU, and subject to the signing of a definitive agreement,
Gravity may receive up to more than US$10 million in minimum
guaranteed royalties and royalties on gross sales. The terms and
conditions of such definitive agreement are currently being
negotiated between the parties.
Pursuant to an existing agreement, two Ragnarok
Online IP-based mobile games developed by Dream Square are expected
to be launched in China during 2016.
• Gravity to expand its business in
Taiwan in 2016
Gravity plans to expand its business in Taiwan
in 2016, through direct game service and new launchings.
In November 2015, Gravity set up a
representative office in Taipei City, Taiwan. Initiating direct
game service in Taiwan, Gravity plans to launch Ragnarok Prequel, a
web game developed by Dream Square, under the name of Xianjing RO
Chuanshuo WEB, in the first quarter of 2016. Also, the Company
expects to launch a mobile game, developed by a third party, in the
second quarter of 2016.
In addition, Gravity plans to launch Ragnarok
Prequel in more markets, including North America, Hong Kong and
Thailand, during 2016.
About GRAVITY Co., Ltd.
Based in Korea, Gravity is a developer and
publisher of online and mobile games. Gravity's principal product,
Ragnarok Online, is a popular online game in many markets,
including Japan, Taiwan and Thailand, and is currently commercially
offered in 71 markets and countries. For more information about
Gravity, please visit http://www.gravity.co.kr.
Forward-Looking Statements:
Certain statements in this press release may
include, in addition to historical information, "forward-looking
statements" within the meaning of the "safe-harbor" provisions of
the U.S. Private Securities Litigation Reform Act 1995.
Forward-looking statements can generally be identified by the use
of forward-looking terminology, such as "may," "will," "expect,"
"intend," "estimate," "anticipate," "believe" "project," or
"continue" or the negative thereof or other similar words, although
not all forward-looking statements contain these words. Investors
should consider the information contained in our submissions and
filings with the United States Securities and Exchange Commission
(the "SEC"), including our annual report for the fiscal year ended
December 31, 2014 on Form 20-F, together with such other documents
that we may submit to or file with the SEC from time to time, on
Form 6-K. The forward-looking statements speak only as of this
press release and we assume no duty to update them to reflect new,
changing or unanticipated events or circumstances.
Contacts:
Mr. Heung Gon Kim Chief Financial Officer
Gravity Co., Ltd. Email: kheung@gravity.co.kr
Ms. Ji Hee Kim IR Manager Gravity Co., Ltd.
Email: ircommunication@gravity.co.kr Telephone: +82-2-2132-7800
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