Company: GCL
Filing Date: 2025-03-17
Form Type: DRS
Source: 0001213900-25-024502
Chunk: 31

Company: GCL Global Holdings Ltd
Filing Date: 2025-03-17
Form: DRS
Chunk 31
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 Software development costs, promotion and marketing expenses and royalties payable to software developers and third-party licensors
have continued to increase and reduce our profit margin. Future sales of our titles may not be sufficient to recover development payments
and advances to software developers and licensors, and we may not have adequate financial and other resources to satisfy our contractual
commitments to such developers. If we fail to satisfy our obligations under agreements with third-party developers and licensors, the
publishing agreements may be terminated or modified in ways that are burdensome to us and have a material adverse effect on our business,
financial condition, and operating results.

We have engaged, and expect to engage, third-party game development companies to co-develop, co-publish or operate certain games, and if they fail to perform as expected, our business may suffer.

We have in the past and expect
in the future to, engage third-party game development companies to co-develop or co-publish certain video games with us. For instance, Atomic Heart, a game launched in February 2023, was co-published by us and Focus Entertainment, a game developer company based in Abu
Dhabi. We typically have limited control over the work performed by the development company and are therefore subject to additional risks
than if our own employees were developing and operating our games, such that completion of our games and their publication could be delayed
due to the development company’s failure to adhere to our milestones and roadmaps, or political or other risks in the foreign country
in which the development company operates. If our third-party game development companies fail to complete development milestones in accordance
with our game development roadmap, or do not perform in accordance with our agreements with them, it could adversely affect the development
of our games that are the subject of that agreement, including delaying their availability for launch and their performance once launched,
which could materially and adversely impact our ability to meet our forecasts.

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Once a co-published game is
launched, we will be reliant on the development company’s ability to maintain an adequate number of knowledgeable and experienced
personnel to operate and maintain the co-developed game or existing game successfully and to develop and implement future game updates,
patches and bug fixes, as well as provide ongoing support services. If the development companies fail to operate and maintain the co-developed
game or existing game, it could adversely affect such game’s performance and gamer satisfaction, and our business may suffer as
a result. Further, if the game development companies breached our agreements