GungHo Online Entertainment : Notice of Convocation of the 26th Annual General Meeting of Shareholders

Securities code: 3765 (Mailing date) March 13, 2023 (Date of Commencement of Electronic Provision Measures) March 8, 2023

Dear shareholders

1-11-1, Marunouchi, Chiyoda-ku, Tokyo

GungHo Online Entertainment, Inc.

President & CEO Kazuki Morishita

Notice of Convocation of the 26th Annual General Meeting

of Shareholders

It gives us great pleasure to invite you to the 26th Annual General Meeting of Shareholders of GungHo Online

Entertainment, Inc.

In convening this General Meeting of Shareholders, GungHo Online Entertainment, Inc. "the Company" takes measures for providing information constituting the content of reference documents, etc. for the shareholders' meeting in an electronic format. Please access the following website and review the information posted on the Company's website as "Notice of Convocation of the 26th Annual General Meeting of Shareholders."

The Company's website https://www.gungho.co.jp/jp/en/ir/stock/meeting.html

The content provided in electronic format is posted on the above website and also available on the Tokyo Stock Exchange (TSE) website. Please check below.

TSE website (Listed Company Search) https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show

Please access on the above TSE website. Search "GungHo Online Entertainment" or "Ticker code" (3765), select "Basic information" and then "Documents for public inspection/PR information," and find "Notice of General Shareholders Meeting" under "Filed information available for public inspection."

If you are not attending the meeting in person, you can exercise your voting rights via the Internet or by mail instead. Please read carefully the reference materials for the General Meeting of Shareholders, and exercise your voting rights by 6 p.m. on Wednesday, March 29, 2023.

The distribution of souvenirs at the General Meeting of Shareholders has been cancelled in order to give top priority to safety from the viewpoint of preventing the spread of COVID-19 infections. Thank you for your understanding.

[When exercising the voting rights via the Internet]

Access the Company's Voting Rights Exercise Website (https://www.tosyodai54.net), obtain the Voting Code and Password provided in the Voting Rights Exercise Form sent together with this Convocation Notice, and indicate whether you are for or against each of the Proposals following the directions on the website.

Before exercising your voting rights via the Internet, please read "Guide to Exercising the Voting Rights via the Internet, etc." provided later.

[When exercising the voting rights by mail]

Please indicate whether you are for or against each of the Proposals on the Voting Rights Exercise Form that is attached to the Notice of Convocation, and return it to us by the deadline for exercising your voting rights stipulated above.

―1―

1.	Date and time	March 30, 2023 (Thursday) 10:00 a.m. (Doors open at 9:00 a.m.)
2.	Venue	3-13-1 Takanawa, Minato-ku, Tokyo
		Grand Prince Hotel New Takanawa "International Convention Center Pamir"
3.	Purpose
	Matters to be reported 1. Report on the Business Report, the Consolidated Financial Statements, and the

Audit Results of the Consolidated Financial Statements by the Accounting Auditor and the Board of Corporate Auditors for the 26th term (from January 1, 2022 to December 31, 2022)

2. Report on the Non-consolidated Financial Statements for the 26th term (from January 1, 2022 to December 31, 2022)

Matters to beresolved

Proposal 1 Election of Ten (10) Directors Partial Amendment of the Article of Incorporation

Proposal 2 Revision of the Amount of Compensation for Directors (Introduction of Performance-Linked

Compensation for Executive Directors)

4. Introduction to exercising the voting rights

1. In the case where you choose to exercise your yoting rights in writing (by mail),if there is no indication of your vote for or against a proposal on the voting form, it will be treated as a vote "for" the proposal.
2. If you submit your vote multiple times via the Internet, only the last vote will be valid.
3. If you exercise your voting rights multiple times both via the Internet and in writing redundantly, the exercise via the Internet will be treated as the valid manifestation of intension.

・When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception.

・If the matters to be electronically provided are amended, both the pre-amendment and post-amendment matters, together with an announcement to that effect, will be posted on the Company's website and the TSE website mentioned above.

・Please be advised that non-shareholders such as proxies and persons accompanying shareholders are not permitted to attend the meeting.

―2―

Notice of Measures to Prevent the Spread of COVID-19 Infections

• In order to give top priority to safety from the viewpoint of preventing the spread of COVID- 19 infections, shareholders are kindly requested to exercise their voting rights in writing or via the Internet, etc., in advance, and refrain from attending the General Meeting of Shareholders.
• If there is any major change to the proceedings of the General Meeting of Shareholders due to the spread of infections by the day of the Meeting, a notice will be posted on the Company's website (https://www.gungho.co.jp/).
• Regarding the proceedings of this General Meeting of Shareholders, the Meeting may be substantially shortened, including the explanations for matters to be reported and those to be resolved, in order to shorten the meeting time for the purpose of preventing the spread of COVID- 19 infections. Shareholders are kindly requested to read the Notice of Convocation in advance.
• Attending shareholders are also kindly requested to bring and wear masks.
• We will take your temperature by thermography, etc., in the reception area. In order to ensure the safety of other shareholders, we may refuse admission to those who are deemed to have a fever, or seem to be in poor health.
• We will install alcohol-based hand sanitizers near reception.
• When setting up the venue, seating will be spaced out.
• Directors and operating staff attending the General Meeting of Shareholders shall receive you wearing masks after checking their physical condition, including temperature.

―3―

<>

[Internet method]

The exercise of voting rights via the Internet (PCs, mobile phones, and smartphones) may be possible only by using the voting website designated by the Company (https://www.tosyodai54.net).

1. Using a personal computer or mobile phone

Please access the URL above, use the "Voting Code" and "Password" printed in the "Request" section of the Voting Rights Exercise Form, and exercise your voting rights following the guidance on the screen.

If you use a mobile phone with a barcode scanning function, you can access the voting website by scanning the "QR for Portable Phones" printed on the Voting Rights Exercise Form.

2. Using a smartphone

You can exercise your voting rights following the guidance on the screen for exercising voting rights by scanning the "Login QR Code for the Voting Website for Smartphones" printed in the "Request" section of the Voting Rights Exercise Form. In this case, you do not need to enter the "Voting Code" and "Password."

If you wish to change your vote after exercising your voting rights once, you will need to scan the QR Code again and enter the "Voting Code" and "Password." (QR Code is a registered trademark of DENSO WAVE INCORPORATED.)

(Warning)

• Voting rights may not be exercised via the Internet depending on the Internet environment of shareholders.
• Please note that shareholders are responsible for communication charges and connection fees to service providers for accessing the voting website.

[Inquiries regarding the exercise of voting rights via the Internet]

Administrator of Shareholder Registry: Tokyo Securities Transfer Agent Co., Ltd.

Phone: [phone](toll-free number)

Reception hours: 9 AM to 9 PM

[Use of the electronic voting platform (To institutional investors)]

Institutional investors may use the "Electronic Voting Platform" operated by ICJ, Inc. as a method for exercising voting rights at this General Meeting of Shareholders.

―4―

Attachment

Business Report

( From January 1, 2022 )

to December 31, 2022

1. Overview of the Company Group

1. Consolidated business performance for the fiscal year ended December 31, 2022

1. Business progress and results
   Japan's game market shrank in 2021 to 2.27 trillion yen*, down 0.8% year-on-year, due to a slight decrease in the software market offsetting the growth in the hardware market.
   On the other hand, the global game content market expanded in 2021 to 21,892.7 billion yen*, up 6.1% year- on-year, owing to the continued growth of the mobile game market and the expansion of the PC online game market.
   The outlook for the economic situation remains unclear due to the unstable international situation and certain
   areas seen as stagnant due to the impact of COVID-19.
   Against this backdrop, our company continued to concentrate on game development with a focus on global distribution in aim of the "creation of new value," and in order to "maximize existing value," we have worked to maintain and expand MAU (Monthly Active Users: the number of users who log into the game at least once a month), and have made efforts to strengthen the brands of each of our games.
   As for existing games, "Puzzle & Dragons" (referred to as "P&D" henceforth) has had continuous updates such as adding of new dungeons and improvement in game content, all with the main objective of continuous long- term enjoyment. In addition, initiatives were taken to reinvigorate active users by holding an appreciation celebration in October 2022 as well as events including ones collaborating with famous characters from other companies regularly.
   The MAU of a smartphone MMORPG "Ragnarok Origin" has been stable after follow-on updates and events. The Nintendo SwitchTM "Ninja-Gum" action game "Ninjala" is continuing to expand its user base through collaboration events, online competitions, TV anime broadcasts, and a wide range of cross-media deployment, and on February 14, 2023, the world total number of downloads exceeded 10 million.
   As for a new game, a multi-player online survival action game "DEATHVERSE: LET IT DIE" service was decided to be temporarily suspended for redevelopment to make the game content enjoyable for a wider range of people.
   Looking at the businesses of our subsidiaries, the Ragnarok-related titles distributed by Gravity Co., Ltd. and its consolidated subsidiaries continued to be stable due to the continuous updates and holding of events. The MMORPG "Ragnarok Origin" for smartphones, which launched service in Taiwan, Hong Kong, and Macau on September 15, 2022, has also recorded favorable sales and has contributed to the consolidated financial results.
   As a result, net sales for the fiscal year ended December 31, 2022 amounted to 105,505 million yen, (an increase of 0.8% year-on-year). Operating profit was 27,649 million yen, (a decrease of 15.7% year-on-year), ordinary profit was 28,985 million yen, (a decrease of 13.8% year-on-year), and profit attributable to owners of parent came to 19,022 million yen, a decrease of 16.9% from a year earlier.
   The GungHo Group is a single-segment company; therefore, no segment information is disclosed.
2. • "Famitsu" 2022 Game White Paper
3. Capital expenditure

For the fiscal year ended December 31, 2022, capital expenditure totaled 2,019 million yen, consisting mainly of 1,557 million yen in game development expenditure.

―5―