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Nippon Ichi Software: 27th Term, 2nd Quarter Business Report (FY2020)

Key insights

7 takeaways

01
Nippon Ichi Software reported a net loss of 22.4 million yen for the second quarter of the 27th fiscal year, a significant decline from the 301.6 million yen profit recorded in the same period of the previous year.See it on page 10
02
Net sales for the second quarter fell to 1.41 billion yen, down from 2.62 billion yen in the prior year's second quarter, while operating profit dropped to 56.6 million yen from 416.3 million yen.See it on page 10
03
The company is currently undergoing remediation for 'Makai Senki Disgaea RPG' following service issues after its March 19 launch, with a target to resume service in November.See it on page 2
04
New consumer game titles released during the period include 'Murder Detective: Jack the Ripper' (April 25) and 'Jinrui no Minasama e' (June 27) for PlayStation 4 and Nintendo Switch.See it on page 6
05
The company launched a 'Game Variety' series of paid, one-time-purchase smartphone applications that include ports of existing IP like 'Yomawari' and classic table games, featuring no advertisements or additional in-app purchases.See it on page 8
06
Operating cash flow turned negative at 475.8 million yen for the period, compared to a positive 344.6 million yen in the same period of the previous year.See it on page 10
07
As of September 30, 2019, the company maintains a total of 166 employees and a total net asset value of 3.38 billion yen.See it on page 11

Summary

Nippon Ichi Software’s business report for the second quarter of the 27th fiscal term (ending September 30, 2019) outlines the company’s strategic focus on its "Entertainment for All" vision, which emphasizes global reach and multi-platform content delivery. The company continues to prioritize the development of both new and existing intellectual properties across consumer gaming, mobile applications, and event-based engagement.

Financial performance for the period reflects a challenging environment, with net sales reaching 1.407 billion yen and an operating profit of 56.6 million yen. The company reported a net loss of 22.4 million yen for the quarter, a decline compared to the previous year’s performance. This period was marked by significant investments in product development and infrastructure, including the completion of the new "Reiwa" headquarters building in April 2019.

Operational highlights include the release of consumer titles such as "Murder Detective: Jack the Ripper" and "Jinrui no Minasama e," alongside the launch of a "Game Variety" series for mobile platforms, which offers ad-free, one-time purchase experiences. The company also noted ongoing maintenance and remediation efforts for "Makai Senki Disgaea RPG," with a service relaunch scheduled for November. Furthermore, the company successfully hosted the third "National Entertainment Festival" in Gifu, attracting a record 33,000 attendees.

The company maintains a commitment to its founding philosophy that games are commercial products intended to bring joy to users, rather than mere artistic works. By leveraging its internal development capabilities and pursuing licensing opportunities, the organization aims to stabilize its financial position while continuing to cultivate its portfolio of intellectual properties for a diverse, global audience.