This study is a case study on the decline of mobile game developer D company and the avoidance of designation of administrative issue. D company had got tremendous success with C game distributed to Kakao games. D company has listed on the KOSDAQ market in October 2014. However, unlike expectations, management performance has became worse after 2015, resulting in long-term operating loss. Share price of D company on October 2020 decreased by 84.3% compared to the IPO(Initial Public Offering). This study analyzed the causes of decreasing of management performance of D company. First, they followed to the past success way irrespective to the change of the game industry trend. Second, the follow-up game launch was delayed due to lack of effort to develop the game. Third, marketing costs increased rapidly due to the change in the mobile game industry environment. Fourth, the financial flexibility lost due to excessive corporate benefit plan. Company D suffered an operating loss from 2015 to 2017, and it could be designated as a administrative issue if an operating loss occurred in 2018. Although the follow-up game to the C game was released in 2017, there was not improvement in management performance. So designation of administrative issue to the stock of D company was expected after 2018. However, D company abused the regulation that the long-term operating loss is judged by the separate financial statements. They established subsidiary companies and drove losses to subsidiary companies. And then, the parent company could be avoided designating of administrative issue by converting operating profit on the separate financial statement into surplus.