GRAVITY

**GRAVITY Co., Ltd.** (also known as **Gravity Corporation**) (Korean: 그라비티 주식회사) is a South Korean video game corporation primarily known for the development of the MMORPG *Ragnarok Online*.

## History

The corporation started as a small business in Shinsa-dong, Kangnam-ku, Seoul, South Korea and has expanded to an international corporate interest with several subsidiary divisions. On 2005 February 8, Gravity Corporation made their initial public offering (IPO) and traded $108 million US dollars on NASDAQ under the ticker symbol GRVY.

The company has had a rather turbulent history initially involving internal political conflicts between CEO Kim Hakkyu (who eventually left the company), and company president Jung Ryool Kim (who later assumed control as CEO), but has since stabilized and expanded operations to all of north and south-east Asia through supervised partnerships with native corporate entities. However, while Gravity Corporation's flagship product Ragnarok Online is considered a success in Asia, operations are not as well developed in Europe and the United States in comparison to similar products marketed and developed there.

On 2005 August 30, Jung Ryool Kim, the controlling shareholder, sold his 52% stake and set plans to quit as a director. The buyers of his shares were Ezer and Techno Groove of Japan, a pair of technology ventures controlled by Il Young Ryu and Taizo and Masayoshi Son. After becoming the new majority shareholder, on 2005 September 13, Il Young Ryu was named by GRAVITY as its new chairman and joint chief executive. Il Young Ryu is also the founder of Area Network Limited and the CEO of Internet Japan. In December 2006, Techno Groove merged into Asian Groove, and ceased to exist. EZER subsequently returned Techno Groove's investment of 9.9 billion yen to Asian Groove, which gave up any interest in GRAVITY. On 2007 October 19, EZER sold their interest in GRAVITY to Son Assets Management or SAM.

On 2006 May 22, GRAVITY announced it had invested $9 Million in US game developer Perpetual Entertainment. Consequently, GRAVITY received a position on Perpetual's board of directors. GRAVITY also received "priority rights for future access to contents and other intellectual property rights of Perpetual Entertainment." On 2007 November 21, GRAVITY announced they had lost their investment after Perpetual cancelled its development of the MMORPG *Gods and Heroes*. The loss would be reflected in their financial statement for 2007.

In October 2007, GRAVITY attempted to be more direct with its Ragnarok Online playerbase by launching their own developer blogs in addition to a livestream channel. Their efforts were short-lived as the developer blogs were discontinued after roughly 4 years. In 2015, a developer notes section was added to the kRO website with the first entries introducing a redone Prontera.

On 2007 December 5, GRAVITY announced they had formed a new US-based game developer, L5 Games. L5 is a subsidiary of Gravity Interactive, Inc. and is based in San Mateo, California. The company is composed of former Blizzard Entertainment employees.

On 2008 February 14, GungHo Online Entertainment obtained 52.4% stake of GRAVITY.

On 2015 January 15, GRAVITY granted Dream Square a nonexclusive right to develop and distribute mobile games in China by using contents of its principal product, *Ragnarok Online*. GRAVITY also signed a license agreement with Dream Square, which entitles Dream Square to operate and distribute *Ragnarok Online II* in China. This agreement was amended in March 2016 to grant Dream Square an exclusive right to develop mobile and web games based on the contents of Ragnarok Online and distribute such games in China for five years from 2016 March 25.

In January 2016, GRAVITY opened up a branch office in Taiwan to help launch Ragnarok Online: Prequel in Taiwan. The game is planned for release in Taiwan, Hong Kong, North America, and Thailand sometime in 2016.

In March 2016, the licensing agreement with Gameflier was terminated in preparation for GRAVITY to offer RO directly in the Taiwan, Hong Kong, and Macau markets. On 2016 June 7, the official website for the new twRO was launched and registration for the game was opened. Veteran twRO players were given the option to bind their old accounts to their new GnJOY accounts.

On 2018 July 27, GRAVITY announced the transfer of their stock listing from the NASDAQ Global Market to the NASDAQ Capital Market. The change in stock status goes into effect 2018 August 27.

Gravity established a subsidiary, Gravity Game Tech Co., Ltd in Thailand on 2019 January 29 and a Joint Venture in Indonesia, named as Gravity Game Link Co., Ltd on 2019 February 7.

### Diversion of Revenues Under Previous Management

From 2002 through 2004, GRAVITY's chairman Mr. Jung Ryool Kim diverted approximately $6 Million in revenue from the company to himself. In 2005, Kim sold his shares of GRAVITY to EZER, Inc., a Japanese corporation. Kim paid the company back KRW 7.8 billion on 17 October 2005. After an investigation, GRAVITY and Kim reached a final settlement where Mr. Kim would additionally pay GRAVITY "in part to reimburse the Company for certain of the costs and expenses incurred by the Company in connection with the investigation of the former Chairman's diversion of revenues otherwise due to the Company." Both parties agreed to cease any civil and crimial litigation against one another. As a result of the investigation, GRAVITY was forced to restate its financial statements for the years 2002-2004.

### Settlement, Conclusion Of Litigation

In 2006, two U.S. based hedge funds created a committee for "fair treatment of minority shareholders" which initiated litigation charging that the majority shareholders and officers have violated their fiduciary obligations.

The funds, Moon Capital Management and Ramius Capital Group, both headquartered in New York City, demanded that GRAVITY call an extraordinary general meeting of the shareholders to give them a chance to vote Il Young Ryu out of office. Their demands were in time successful, and a meeting was scheduled for December 26.

On 2007 June 11, GRAVITY announced that it and other defendants had reached an agreement in principle to settle the class action litigation brought on behalf of purchasers of the Company's American Depository Shares during the period from 2005 February 7 to 2005 November 10, inclusive. $10 Million was set aside to pay the plaintiffs, $5 Million of which came directly from GRAVITY, in exchange for being released from any liability. However, the company continued to deny any wrongdoing.

On 2008 January 7, GRAVITY announced that the federal judge presiding over the consolidated class action approved the settlement of the class action. In addition, no plaintiff has filed an appeal during the 30-day time appeal period which expired on 2007 December 21.

## Game titles

The following are games that have been published and/or are currently being developed by GRAVITY.

### Ragnarok

*Main article:* Ragnarok Online

***Ragnarok Online*** (Korean: 라그나로크 온라인), often referred to as *RO*, is a MMORPG created by GRAVITY based on the manhwa *Ragnarok* by Lee Myung-jin. It was first released in South Korea on 2002 August 31 for Microsoft Windows and has since been released in many other locales around the world. Much of the game's mythos is based on Norse mythology, but its style has been influenced by Christianity and various Asian cultures as well. The game has spawned an animated series, *Ragnarok the Animation*, and a sequel game, *Ragnarok Online 2: Legend of the Second*, which is a remake of *Ragnarok Online 2: The Gate of the World* is currently in development. It has also spawned a beat'em up game called Ragnarok Battle Offline, which was developed by French Bread, but published by GRAVITY.

### ROSE

***ROSE Online***, or ***Rush On Seven Episodes Online*** (Korean: 로즈 온라인) is an MMORPG which was created by Korean company TriggerSoft and was published by GRAVITY Corp. TriggerSoft stopped developing the game in 2007, and the rights of ROSE Online were sold to several different companies which now develop and publish their own versions of the game. For instance, Gravity Interactive, Inc. develops and publishes its version of the game for 3 North American and 40 European countries.

### Requiem: Bloodymare

***Requiem: Bloodymare*** (Korean: 레퀴엠 온라인), often referred to as *Requiem*, is a MMORPG created by GRAVITY. It was first released in South Korea on 2007 August 31for Microsoft Windows and has since been released in many other locales around the world.

### Ice Age Online

On 2008 January 14, the Company announced an exclusive seven year deal with 20th Century Fox Licensing and Merchandising to develop and publish "Ice Age Online", an online game based on FOX's Ice Age motion picture franchise, but development was halted in 2009(see 20-f form page 46 in 2009)

### Ragnarok II

*Main article:* Ragnarok Online II

***Ragnarok Online 2: Legend of the Second*** (Korean: 라그나로크 온라인 2: Legend of the Second) is an MMORPG created by GRAVITY Corp. of South Korea and is the sequel to the popular MMORPG, *Ragnarok Online*. Most of the game's universe is based on Norse mythology. The soundtrack was produced by Yoko Kanno, well known for her work in Cowboy Bebop and other anime series.

Gameplay is a free roaming typical level-up based MMORPG. You fight monsters, level up, obtain new skills and equipment to better yourself for upcoming battles. You can travel to different planets and explore new environments as well as battle other players and declare wars against other clans guilds. The game features its own in-game economy which is directly controlled by players.

### PC

GRAVITY has also published and/or developed the following PC game titles:

* *Arcturus - The Curse and Loss of Divinity*
* *Emil Chronicle Online*
* *Paper Man*
* *Pucca Racing*
* *Stylia*
* *Time N Tales*

### Mobile

GRAVITY has also published and/or developed the following titles for mobile devices:

* *Ragnarok Mobile Games*
* *Requiem Mobile*
* *Ragnarok DS*

## GnJOY

   On 2010 October 15, GRAVITY created and launched GnJOY, GRAVITY’s official game portal where users will be able to enjoy all of GRAVITY’s games with one integrated ID. There are also various community features, enabling users to discuss about GRAVITY’s games and service while getting inside information about gameplays and star gamers. “Joyroom” is a social networking service within GnJOY that each user can create and build up based on individual game experiences and updates.

## Subsidiaries

GRAVITY owns a number of subsidiary companies, which publish and develop its games in countries and regions around the world.

* Gravity Interactive publishes games in North America.
* Gravity Communications, a new branch office founded to manage GRAVITY games in Taiwan. It was formerly incorporated on 2018 April 13.
* Gravity Game Tech, a new branch office founded to manage GRAVITY games in Thailand. It was formerly incorporated on 2019 January 29.
* Gravity Game Link, a new branch office founded to manage GRAVITY games in Indonesia. It was formerly incorporated on 2019 February 7.
* Gravity Game Arise, a new branch office founded to manage GRAVITY games in Japan. It was established in July of 2019.
* Gravity Game Hub, a new branch office founded to manage GRAVITY games in the Philippines, Singapore, and Malaysia. It was established in January of 2021.
* Gravity Game Vision, a new branch office founded to manage GRAVITY games in Hong Kong. It was established in 2022.
* NEOCYON, Inc., established in 2000, develops and publishes mobile games and MMORPGs. It was acquired by GRAVITY in 2005.

### Former Subsidiaries

* TriggerSoft, which created ROSE Online, was acquired by Gravity in 2005. It was liquidated in 2007.
* Gravity CIS, Inc. published games in Russia and CIS countries. It was established in 2005 and based in Moscow, Russia.
* Gravity Europe SASU published games in Europe. It was established in September of 2006, and based in Paris, France.
* Gravity Games Corporation was formerly Barunson Interactive, the developers of Dragonica/Dragon Saga. On 2018 March 30, Gravity Games Corporation held an extraordinary shareholders meeting at which the shareholders approved the commencement of a voluntary dissolution of Gravity Games Corporation.
* Gravity Entertainment Corporation is a subsidiary based in Japan.

## References

1. ↑ LinkedIn 2015 Sept. 30
2. ↑ MSN Money IPO Center - Gravity Co., Ltd. IPO
3. ↑ 19-10-2007 SEC 13-D/A Filing
4. ↑ 30-08-2005 SEC 13D Filing
5. ↑ 13-09-2005 SEC 6-K Filing
6. ↑ 5-11-2007 SEC 13-D Filing
7. ↑ 22-05-2006 SEC 6-K Filing
8. ↑ 21-11-2007 SEC 6-K Filing
9. ↑ WordPress Blog
10. ↑ BlogSpot Blog
11. ↑ UStream Channel
12. ↑ kRO Developer Notes
13. ↑ 05-12-2007 SEC 6-K Filing
14. ↑ Japan's GungHo to acquire S.Korea Gravity majority
15. ↑ PR Newswire 2015 Jan. 01
16. ↑ SEC Report 2016 Oct. 18
17. ↑ SEC Report 2016 Feb. 22
18. ↑ SEC Report 2016 Apr. 23
19. ↑ GRAVITY Taiwan RO Website 2016 Aug. 01
20. ↑ SEC Report 2018 Jul. 31
21. ↑ SEC Report 2019 Apr. 01
22. ↑ 18-05-2006 SEC 6-K Filing
23. ↑ 08-2005 SEC 6-K Filing
24. ↑ 10-2005 SEC 6-K Filing
25. ↑ 11-06-2007 SEC 6-K Filing
07-01-2008 SEC 6-K Filing
27. ↑ 2009 Annual Report 2011 Mar. 18
28. ↑ Gravity Developing Ice Age Online
29. ↑ Ice Age Online Announced
30. ↑ Korea Game Watch 2015 Apr. 21
31. ↑ About Gravity Interactive - Gravity KR Website
32. ↑ SEC Report 2018 Apr. 27
33. ↑ SEC Report 2019 May 15
34. ↑ SEC Report 2019 May 15
35. ↑ About Gravity Game Arise - Gravity KR Website
36. ↑ About Gravity Game Hub - Gravity KR Website
37. ↑ About Gravity Game Vision - Gravity KR Website
38. ↑ About Neo Cyon, Inc. - Gravity KR Website
39. ↑ 15-11-2005 SEC 6-K Filing
40. ↑ 2007 Annual Report
41. ↑ About Gravity CIS, Inc. - Gravity KR Website
42. ↑ About Gravity Europe - Gravity KR Website
43. ↑ SEC Report 2018 Apr. 27
44. ↑ SEC Report 2018 Apr. 27

## External Links

* Official Gravity Corporation Website
* Official Taiwan Branch
* Official Indonesia Branch