GungHo Rejects Investor Push to Oust Longtime CEO Kazuki Morishita

Japanese game publisher GungHo Online Entertainment, best known for Puzzle & Dragons and more recently for publishing Trails in the Sky 1st Chapter, has rejected a proposal from activist investors to remove its president and CEO, Kazuki Morishita.

The decision came during an extraordinary shareholders’ meeting (EGM) held on September 24, 2025, following months of tension between the company and Tokyo-based investment fund Strategic Capital.

What Happened at the Meeting

Strategic Capital, which holds around 8.5-11% of GungHo’s voting rights, had submitted two proposals: first, to relax the requirements for dismissing directors, and second, to fire Morishita from his role as CEO.

While the first motion passed, making it easier to remove executives in the future, the attempt to oust Morishita failed to secure majority support.

Why Investors Are Frustrated

The activist fund has been openly critical of Morishita’s leadership, pointing to the company’s lack of major hits since Puzzle & Dragons launched over a decade ago. According to The Nikkei, Strategic Capital has argued that Morishita is both overpaid and underperforming, with his compensation rising despite GungHo’s declining performance. The company’s share price has reportedly dropped by about 35% over the past ten years, fueling investor frustration.

Strategic Capital’s president, Tsuyoshi Maruki, described the outcome as “disappointing” and confirmed that the fund will continue to push for management reforms. For activist investors, the goal is usually to maximize shareholder returns, and in this case, they believe leadership change is the key to turning things around.

GungHo’s Defense of Morishita

GungHo, however, has stood firmly behind its CEO. The company insists that Morishita has made tremendous contributions to its growth and that removing him would “significantly damage corporate value.” In fact, GungHo has repeatedly issued rebuttals to Strategic Capital’s claims, even releasing statements earlier this year defending its executive pay structure and leadership approach.

Source