At a board meeting in Tokyo today, Gungho Online Entertainment executives decided to rise the company's stake in GameArts with the aim of making the developers of Grandia and Lunar a consolidated subsidiary. GungHo which operates MMORPGs such as Ragnorak Online, A3 and Tantra in Japan, has already obtained the approval of GameArts founder, president and No.1 shareholder Youichi Miyaji. Following the board's decision today, Gungho management will now enter into negotiations with GameArts' other shareholders to obtain a majority stake in the development studio. As GameArts' second largest shareholder GungHo itself already owns a 11.93% stake in GameArts. Apart from Miyaji who holds a 35.20% stake, GameArts' shareholders include Connect Technology (11.93%), Square Enix (11.46%), Kadokawa Shuppan (5.73%), O.S. Capital (4.53%) and 16 other individuals (19.22%).

At last month's Tokyo Game Show, GungHo and GameArts had jointly announced the first online installment in GameArts' critically acclaimed flagship series, Grandia Online.

• GungHo Online Entertainment