Nippon Ichi Software 17th Annual Securities Report

Key insights

6 takeaways

01
Nippon Ichi Software recorded a net loss of 332.88 million yen for the fiscal year ending March 31, 2010, marking a significant decline from the previous year's 65.61 million yen loss.See it on page 9
02
Total net assets decreased from 1.10 billion yen to 764.23 million yen, driven by rising production costs, the cancellation of two major projects, and impairment losses on property and patents.See it on page 74
03
The company’s revenue stream was highly concentrated, with 67.7% of accounts receivable tied to a single client, Sony Computer Entertainment.See it on page 12
04
To improve operational efficiency, the company dissolved its European subsidiary, NIS Europe, Inc., and consolidated those operations under NIS America, Inc.See it on page 88
05
Despite the financial downturn, the company maintained shareholder returns by issuing a dividend of 200 yen per share.See it on page 32
06
Net sales saw a modest increase to 2.12 billion yen, even as the company navigated a shrinking domestic market and challenging global economic conditions.See it on page 19

Summary

Nippon Ichi Software faced a period of significant financial contraction during the fiscal year ending March 31, 2010. While the company achieved a modest increase in net sales to 2.12 billion yen, it recorded a net loss of 332.88 million yen, a substantial decline from the previous year’s loss of 65.61 million yen. This downturn was primarily driven by rising production costs, the cancellation of two major game development projects, and the recognition of impairment losses on assets, including old headquarters property and unused patent rights. Consequently, total net assets fell from 1.10 billion yen to 764.23 million yen over the course of the fiscal year.

The company’s operational strategy during this period focused on maintaining competitiveness through high-value content and brand reinforcement despite a challenging global economic climate and a shrinking domestic market. However, the business model remained vulnerable due to a heavy reliance on specific software titles and a high concentration of trade receivables, with 67.7% of accounts tied to a single major client, Sony Computer Entertainment. To improve management efficiency, the company dissolved its European subsidiary, NIS Europe, Inc., and transferred its operations to NIS America, Inc.

Corporate governance remained stable throughout this period, supported by a structured board of directors and internal audit functions. Independent auditors from Azusa Audit Corporation confirmed that the financial statements and internal controls were prepared in accordance with generally accepted accounting standards and fairly represented the company’s position. Despite the fiscal losses and the transition to new accounting standards for financial instruments and leases, the company maintained its commitment to shareholder returns, issuing a dividend of 200 yen per share. The organization continues to prioritize its core consumer game business while navigating the risks associated with development constraints and market volatility.