Puzzle & Dragons Publisher Accuses Former Employee Of Embezzling Over $2 Million

By Elijah Gonzalez  |  August 18, 2025 | 10:15am
Video Games News Puzzle & Dragons
Puzzle & Dragons Publisher Accuses Former Employee Of Embezzling Over $2 Million

In a notice to investors, Puzzle & Dragons publisher GungHo Online Entertainment accused an unnamed former executive employee of embezzling close to $2.3 million from the company, as noticed by VideoGameChronicle.

After conducting an investigation with outside assistance, including an external law firm and a forensic team from an accounting firm, GungHo allegedly found that the fired employee had embezzled the funds as outsourcing fees.

“The Former Employee did so by issuing fictitious business orders through a work-matching service site operated by a third-party company, with the Company as the client, and with the Former Employee oneself acting as the contractor (total damage: approximately 246 million yen),” the statement reads. “Additionally, we confirmed that the Former Employee caused an outflow of approximately 100 million yen of the Company’s money by improperly paying outsourcing fees to a certain business partner, despite the fact that no actual business being conducted.”

After their initial investigation, they formed an internal team led by two independent outside company auditors to further investigate through interviews and more, which led to the employee being fired on July 24. Additionally, GungHo has “begun consulting with a criminal investigative authority and discussing the possibility of filing for a criminal complaint.”

As a result of the solo act, the company has “reduced the executive compensation of five directors to clarify management responsibility,” with company president and CEO Kazuki Morishita taking a 30% reduction to his base salary for three months, and four other executives taking a 10% reduction over the same span.

The news comes in the middle of an existing internal conflict within GungHo, as the company prepares a vote to potentially oust CEO Morishita, who some shareholders believe is being overcompensated. According to the shareholders who raised the vote, Morishita is paid close to the president of Nintendo, and paid more than those of Capcom and Konami. Despite this, he has spent over 100 billion yen on new games outside of Puzzle & Dragons that have earned less than 10 billion yen.

Puzzle & Dragons is a match-three puzzle released for mobile in 2012. It was the first mobile game to gross $1 billion in revenue, and had raised $7 billion as of 2018, spawning a media franchise that includes spin-off games, anime, trading cards, and more. Despite this, shareholders argued back in January that GungHo had failed to follow up on the success of Puzzle & Dragons, with the game still making up the vast majority of company revenue more than a decade after release.

 
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