Japanese gaming studio KLab, the minds behind Bleach: Brave Souls and Square Enix’s Dragon Quest Smash/Grow, have recently released their consolidated financial results for the second quarter of the fiscal year concluding December 2026. According to GameBiz, the company achieved a profit for the first time in years, largely due to the impressive performance of Dragon Quest Smash/Grow. With a 113.9% year-on-year increase in revenue, KLab managed to transform the previous quarter’s deficit of around $2.85 million into an operating profit of $3.08 million.
On the other hand, KLab has also undergone significant workforce reductions over the past year, parting ways with 120 employees since the second quarter of the prior fiscal year. This stems from a mass voluntary resignation program initiated by the company in May 2025 amid ongoing financial difficulties. Initially, KLab had aimed to cut 100 jobs as early as June 2025, but only 47 employees accepted the buyouts at that time. Nevertheless, it appears the company ultimately exceeded its initial target by the start of the next fiscal period due to natural attrition.
In response to its declining performance, KLab also entered a capital and business alliance with UAE investment firm Ultimate Classic Investment, securing over $32.7 million for game development budgets and Bitcoin and gold investments. Likely as a consequence of this partnership, and with Ultimate Classic Investment becoming KLab’s largest shareholder, the company announced plans to establish a new, wholly owned subsidiary in Dubai.
Now that KLab has finally turned a profit thanks to Middle Eastern investments and the subsequent success of Dragon Quest Smash/Grow and MHA: United Survival, it will be intriguing to observe whether its workforce will grow, particularly considering the upcoming Dubai subsidiary.