Gravity REPORTS FIRST QUARTER 2005 RESULTS 
 
 
Seoul, South Korea – May 13, 2005 – GRAVITY Co., Ltd. (Nasdaq: GRVY), a leading 
developer and distributor of online games, today reported financial results for 
the first quarter ended March 31, 2005. 
 
Revenue for the first quarter of 2005 was US$15.8 million compared to US$16.4  
million in the fourth quarter and US$16.1 million in the year ago period.  This 
represents a decline of 3.8% and 1%, respectively. 
 
Subscription revenue was up 14% in the first quarter of 2005 compared to the  
fourth quarter of 2004 due to the addition of revenue from Gravity’s newly  
launched R.O.S.E Online and positive seasonal factors.   However, lower revenue 
from animation business more than offset the rise in subscription revenue.  On  
a year over year basis, subscription revenue declined 18% due to the continued  
decline of Ragnarok Online revenues in Korea.  Royalties and license fees from  
overseas markets were $11.1 million in both the first quarter of 2005 and the  
fourth quarter of 2004.   
 
Operating expenses were $7.9 million in the first quarter of 2005 compared to  
$7.0 million in the fourth quarter of 2004 representing an increase of 13% due  
to the amortization of Stock Option expenses and the payment of one-time bonus  
to employees. This compares to operating expenses of $5.0 million in the first  
quarter of 2004. 
 
Pre-tax profit for the first quarter of 2005 was $7.2 million, compared to $9.7 
million for the same period in 2004 and $8.5 million for the fourth quarter of  
2004.   
 
Net income for the first quarter of 2005 was $6.5 million, assuming the same  
corporate tax rate as in 2004, or $0.26 per diluted ADS compared to $8.0  
million or $0.36 per diluted ADS and $8.4 million or $0.38 per diluted ADS in  
the fourth quarter and first quarter of 2004 respectively. 
 
David Woong-Jin Yoon, Chief Executive Officer of Gravity, commented, “While we  
continued to execute on our business in the first quarter, actual quarter  
results came in lower than expected. The sluggish trends Gravity was impacted  
by appear to be in line with domestic market weakness reported recently by  
other companies in our industry.  We remain confident, however, in our  
fundamental business and expect to regain traction as we move forward and build 
on the strength of our titles worldwide and growing global demand for online  
games.” 
 
“During the first quarter and into the second quarter there were several  
positive developments at Gravity including new local partners coming on board  
in a variety of new geographic markets.  Ragnarok Online is now commercialized  
in 20 markets with additional 17 markets expected to be launched within this  
year.  Importantly, we signed an agreement to acquire Trigger Soft, a game  
developer in Korea, which developed R.O.S.E. Online, the first online game  
published by Gravity.  We felt it was critical to acquire Trigger Soft in order 
to constantly maintain and manage the brand value of Gravity by reinforcing  
R.O.S.E Online’s services and updates.” 
 
“In order to significantly enhance the company value, Gravity will make the  
best use of its global platforms covering 37 countries and tens of million user 
accounts.  Gravity will also leverage Ragnarok Online’s dominant number one  
position in many of those countries.  Presently, we believe that Gravity’s  
strong market position and brand value in Japan should provide significant  
momentum for increasing our shareholder value.  Our Japanese distributor GungHo 
Online Entertainment commands a $2.5 billion market capitalization primarily  
due to the dominant position and popularity of Ragnarok Online, whose sales  
account for 99.8% of GungHo’s revenue.  Furthermore, major MMORPGs, including  
RO2 and Requiem to be introduced next year, should significantly bolster our  
revenue and profit.  We are also building a next-generation game portal,  
through which our casual games and other games will be published.  The game  
portal should become a great contributor of revenue if expanded through our  
global platforms.” 
 
Kwan Shik Seo, Chief Financial Officer of Gravity, said, “We currently expect  
that several issues, however, including increasing competition in Korea, will  
continue to impact our results in the second quarter and for the full year  
2005.  As a result, we now expect our full-year 2005 revenue will be  
approximately US$75.1 million, with a pre-tax profit target of US$33.2 million  
reflecting both the lowered revenue expectations and Gravity’s higher, post- 
IPO cost base.  This would represent revenue growth of 17% over 2004, which  
will be primarily caused by R.O.S.E. Online royalty and license revenue in the  
second half of this year and stronger RO royalty and license revenue from newly 
commercialized markets.   As for the second quarter of 2005, due to increasing  
domestic competition and pricing pressure, we expect revenue will decline by 3% 
compared to the first quarter, to approximately US$15.3 million, with pre-tax  
profit of approximately US$5.9 million, down approximately 19% compared to the  
first quarter 2005 or down 33% compared to the second quarter of 2004.”  
 
Investor Conference Call / Webcast Details 
Gravity will review detailed first quarter 2005 results on Thursday, May 12,  
2005 at 5:00 PM EST (6:00 AM, May 13 in Seoul).  The conference call-in number  
is 913-981-4913. A live webcast of the conference call will be available on  
Gravity’s website at www.gravity.co.kr.  A replay of the call will be  
available approximately 3 hours after the conclusion of the conference call and 
will be accessible by dialing +1-719-457-0820 and at Gravity’s website at  
www.gravity.co.kr.  The passcode for both the live call and the replay is  
7333941. 
 
 
About GRAVITY Co., Ltd. 
Based in Korea, Gravity is a leading developer and distributor of online games  
in Japan, Taiwan, Thailand and Korea. The Company’s principal product,  
Ragnarok Online, is currently commercially offered in 20 markets.  Gravity also 
offers a number of mobile games, which are played using mobile phones and other 
mobile devices, participates in the production of a televised animation series, 
and licenses the merchandizing of character-related products based on its  
online games. For more information visit www.gravity.co.kr.  
 
Forward-Looking Statements:  
Certain statements in this press release include forward-looking statements  
within the meaning of the U.S. Private Securities Litigation Reform Act of  
1995. Forward-looking statements generally can be identified by the use of  
forward-looking terminology,  
such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,”  
“believe,” “project”, “predict”, “plan” or “continue” or the negative  
thereof or other similar words.  All forward-looking statements involve risks  
and uncertainties, including, but not limited to, the ability to diversify  
revenue, ability to collect license fees and royalty payments from overseas  
licensees and in a timely manner; ability to acquire, develop, license, launch, 
market or operate commercially successful online games; competition from  
companies that have greater financial resources; introduction of new products  
into the marketplace by competitors; the ability to recruit and retain quality  
employees as the Company grows; and economic and political conditions globally. 
Actual results may differ materially from those discussed in, or implied by,  
the forward-looking statements. The forward-looking statements speak only as of 
the date of this release and the Company assumes no duty to update them to  
reflect new, changing or unanticipated events or circumstances.  
 
 
 
CONTACTS:	 
In Korea: 
Kwan Shik Seo, CFO 
GRAVITY Co. Ltd. 
Tel: 82-2-516-5438(Ext. 314) 
ksseo3311@gravity.co.kr	 
 
In the U.S.: 
David Pasquale, EVP  
The Ruth Group 
Tel: +646-536-7006 
dpasquale@theruthgroup.com 
 
 
– Financial Tables Attached –