Is Colopl profitable in 2026?

Colopl posted an operating loss of about 86 million yen in Q1 FY2026 (Oct to Dec 2025), and H1 FY2026 net sales fell 28.2% year over year to 10,088 million yen as of March 31, 2026, though operating profit for H1 was still positive at 533 million yen, down 62.3% YoY.

Is Colopl laying off employees?

Yes. Colopl launched a voluntary redundancy program in November 2025 targeting about 70 full time staff; applications exceeded the target, with 104 employees leaving by January 31, 2026, generating a 273 million yen extraordinary loss.

What is Colopl's biggest competitor?

Colopl competes with larger Japanese mobile developers including Cygames (Umamusume, Granblue Fantasy), Mixi (Monster Strike), and GungHo (Puzzle and Dragons), plus global players like HoYoverse and Tencent, all cited as out executing Colopl in engagement and monetization as of 2026.

Could AI replace Colopl's game artists?

Colopl tried this directly: its May 2025 title Tsukuyomi: The Divine Hunter used an in-house AI model, AI Kaneko, to auto-generate card art. The game underperformed and ended service by April 2026, and artist Kazuma Kaneko said in July 2026 he has no plans to use generative AI on his next Colopl project.

Does Colopl own Dragon Quest Walk?

No. Colopl developed Dragon Quest Walk, launched September 12, 2019, but Square Enix owns the IP and publishes the game. As of August 2025 it remained one of Square Enix's 9 active live-service mobile titles, making Colopl dependent on an externally controlled asset.

What happened to Colopl's generative AI game feature?

Colopl's AI Kaneko feature in Tsukuyomi: The Divine Hunter (launched May 2025) drew backlash within days for generating images resembling Disney and other copyrighted characters (May 9, 2025). The game ended live service in April 2026 after missing revenue targets.

Gaming companies · Japan

Colopl

colopl.co.jp ↗

Japanese mobile game maker leaning on Dragon Quest Walk, an IP it doesn't own.

Protection under test

Assessed 23 July 2026 · Evidence as of 23 July 2026

Something worth protecting exists and is being tested right now.

On the recordSince 23 July 2026 · Checkable from Aug 10, 2026 · Every call on the record Checkpoint: Q3 FY2026 earnings release, watch for Dragon Quest Walk revenue trend

The call

Colopl's business is now mostly one aging game it doesn't own, running alongside a shrinking headcount and a stalled new-title pipeline.

Colopl makes phone games in Japan, getting most money from Dragon Quest Walk, a game it built but Square Enix owns and controls. The problem is simple: Colopl's own games are losing players, two new ones shut down, and bigger rivals like Cygames and global companies like miHoYo make better games that people actually play. The company could disappear into nothing if Square Enix decides to stop supporting Dragon Quest Walk or takes it over entirely, which would cut off Colopl's main source of cash.

Why

AI pressure: None apparent. Colopl used its own AI art tool 'AI Kaneko' in Tsukuyomi, but that title still shut down in April 2026 anyway. Could AI do the core job? Yes, likely.

Bigger players: Square Enix. Square Enix owns and publishes Dragon Quest Walk, Colopl's main revenue source, and could pull or internalize it at any time. Could a giant copy it? Yes, easily.

What protects it. Dragon Quest Walk still has an installed base and kept H1 FY2026 operating profit positive despite falling sales.

What would change this call

Colopl Q3 FY2026 earnings around Aug 10, 2026. Shows whether the -28.2% H1 revenue decline is reversing or accelerating.
Dragon Quest Walk YoY revenue trend reported in Colopl or Square Enix filings. Indicates whether Colopl's one aging, externally-owned revenue anchor is holding or cracking.
Commercial reception of new titles Volzerk and Alice Gear Aegis in H2 FY2026. Tests whether Colopl can produce a self-owned hit to reduce dependence on Square Enix's IP.

Key numbers

H1 FY2026 sales fell 28.2% YoY to ¥10,088M (2026-03-31)
104 employees left after voluntary buyout, ¥273M charge (2026-01-31)
Two new titles ended live service in April 2026 (2026-04-01)

Named risks

Accelerating revenue decline, H1 FY2026 net sales down 28.2% YoY as of March 2026. Severity: high
Structural dependence on Dragon Quest Walk, a title owned and published by Square Enix, not Colopl. Severity: high
Two new titles, Tsukuyomi and Isekai infinity Isekai, shut down within a year after missing revenue targets. Severity: high
Voluntary redundancy exceeded target, 104 departures signal deeper internal strain beyond planned cost cuts. Severity: medium
Generative AI feature drew copyright similarity backlash and was abandoned by its own lead artist. Severity: medium

Rivals, as read in July 2026

Rival	Direction	Evidence
Cygames	losing to	Cited as outperforming rivals on engagement and monetization with Umamusume and Granblue Fantasy, 2026-03-08
Mixi	losing to	Monster Strike lifetime revenue over $9.2B, still top 5 grossing in Japan per 2025-12-03 commentary
Square Enix	contesting	Controls Dragon Quest Walk IP and publishing, Colopl's main revenue asset remains externally owned
HoYoverse	losing to	Global players cited as eroding Japanese developers domestic mobile-first advantage, 2026-03-08
Tencent	losing to	Named among global players eroding Japanese mobile developers advantage in 2026 analysis
GungHo Online Entertainment	contesting	Puzzle and Dragons remains Japan's most recognizable mobile RPG brand as of 2026-06-18

Questions people ask

Is Colopl profitable in 2026?: Colopl posted an operating loss of about 86 million yen in Q1 FY2026 (Oct to Dec 2025), and H1 FY2026 net sales fell 28.2% year over year to 10,088 million yen as of March 31, 2026, though operating profit for H1 was still positive at 533 million yen, down 62.3% YoY.
Is Colopl laying off employees?: Yes. Colopl launched a voluntary redundancy program in November 2025 targeting about 70 full time staff; applications exceeded the target, with 104 employees leaving by January 31, 2026, generating a 273 million yen extraordinary loss.
What is Colopl's biggest competitor?: Colopl competes with larger Japanese mobile developers including Cygames (Umamusume, Granblue Fantasy), Mixi (Monster Strike), and GungHo (Puzzle and Dragons), plus global players like HoYoverse and Tencent, all cited as out executing Colopl in engagement and monetization as of 2026.
Could AI replace Colopl's game artists?: Colopl tried this directly: its May 2025 title Tsukuyomi: The Divine Hunter used an in-house AI model, AI Kaneko, to auto-generate card art. The game underperformed and ended service by April 2026, and artist Kazuma Kaneko said in July 2026 he has no plans to use generative AI on his next Colopl project.
Does Colopl own Dragon Quest Walk?: No. Colopl developed Dragon Quest Walk, launched September 12, 2019, but Square Enix owns the IP and publishes the game. As of August 2025 it remained one of Square Enix's 9 active live-service mobile titles, making Colopl dependent on an externally controlled asset.
What happened to Colopl's generative AI game feature?: Colopl's AI Kaneko feature in Tsukuyomi: The Divine Hunter (launched May 2025) drew backlash within days for generating images resembling Disney and other copyrighted characters (May 9, 2025). The game ended live service in April 2026 after missing revenue targets.

Timeline

2026-07-24Kazuma Kaneko's Tsukuyomi PC Steam version launches, discloses some generative AI assets used
2026-07-21Artist Kazuma Kaneko says no generative AI planned for his next Colopl project
2026-05-07H1 FY2026 results: net sales down 28.2% YoY to 10,088 million yen
2026-04-23Kazuma Kaneko's Tsukuyomi launches on Nintendo Switch, AI image generation removed for new content
2026-04-01Tsukuyomi: The Divine Hunter and Isekai infinity Isekai both end live service
2026-02-04Colopl confirms 104 employees left under voluntary redundancy, 273 million yen charge
2026-02-04Q1 FY2026 results: net sales down 10.2% YoY, operating loss of 86 million yen
2025-11-06Colopl announces voluntary redundancy program targeting about 70 staff
2025-11-05FY2025 full year results: net sales up 1.0% YoY but net loss of 662 million yen
2025-05-09AI Kaneko feature draws backlash for Disney-like outputs days after Tsukuyomi launch

Revision history

23 July 2026

First assessed. Protection under test. The text above is fixed as of this date and is not edited afterwards.

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