Billionaire Taizo Son Emerges With ‘Puzzle & Dragons’ App after shares of GungHo soared more than 10-fold this year. “Puzzle & Dragons” was the world’s top-grossing game app for smartphones in March

May 9, 2013 Leave a comment

Billionaire Taizo Son Emerges With ‘Puzzle & Dragons’ App

Taizo Son, the youngest brother of SoftBank Corp. (9984) magnate Masayoshi Son, has become a billionaire after shares of his company GungHo Online Entertainment Inc. (3765) soared more than 10-fold (3765) this year. The GungHo chairman holds a 27.8 percent stake in the Tokyo-based company. The shares account for almost all of his $3.3 billion fortune, according to the Bloomberg Billionaires Index. Taizo Son has never appeared on an international wealth ranking. His older brother’s SoftBank holds a 40 percent stake and was an early GungHo investor in 2002. GungHo’s flagship app, “Puzzle & Dragons,” is the world’s best-selling game for Apple Inc (AAPL).’s iPhones and smartphones using Google Inc. (GOOG)’s Android software. The app has been downloaded more than 13 million times in Japan, or about 10 percent of the nation’s population. While free to play, the role-playing game encourages participants to buy and collect characters. It generates about $3 million a day in revenue, according to Macquarie Group Ltd. analyst David Gibson.

“It has become the ‘Angry Birds’ of Japan, the default game users download and play once they buy a smartphone,” Gibson, who has an outperform rating on the stock, wrote in an e-mail interview from Tokyo. “Puzzle & Dragons” was the world’s top-grossing game app for smartphones in March, according to the App Annie Index, which measures revenue and downloads.

Market Cap

GungHo’s market value of $10.4 billion exceeds that of Mazda Motor Corp. or Japan Airlines Co. Ltd., according to data compiled by Bloomberg.

Taizo Son, 40, is the youngest of four brothers in a Korean immigrant family. Masayoshi Son, 55, is the second-oldest and is worth $12.3 billion, according to the Bloomberg ranking. They grew up in Tosu, on the Japanese island of Kyushu.

“My younger brother is part of the management team of GungHo and SoftBank is the largest shareholder of GungHo,” Masayoshi Son told investors on a SoftBank earnings conference call on Jan. 31. He said GungHo’s run-up this year has helped SoftBank’s results. The company increased its stake in GungHo and made it a subsidiary last month.

Taizo Son owns his GungHo shares directly and through three Japanese holding companies — Heartis Inc., Asian Groove Inc. and Key Light KK. GungHo spokeswoman Kimiyo Ichimatsu confirmed Son’s holdings in the company. Taizo Son declined to comment. Based on an analysis of insider transactions, taxes and market performance, he may have about $200 million in cash and other investable assets.

SoftBank is Japan’s third-largest mobile Internet provider. It owns stakes in more than 900 publicly traded and closely held Internet companies, including GungHo, Yahoo Japan Corp. and Alibaba Group Holding Ltd.

SoftBank proposed to buy a 70 percent stake in Sprint Nextel Corp. for $20.1 billion in October to form the world’s third-biggest mobile phone company. Sprint accepted the offer. Billionaire Charles Ergen’s Dish Network Corp. bid $25.5 billion to acquire Sprint in April.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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