Nippon Ichi Software: Q3 2015 Quarterly Report

Key insights

6 takeaways

01
Nippon Ichi Software experienced a significant decline in profitability for the first three quarters of the fiscal year ending March 2015, with operating profit falling 59.3% to 194,911 thousand yen and net profit dropping 73.8% to 104,529 thousand yen.See it on page 3
02
Consolidated net sales for the period of April 1, 2014, to December 31, 2014, totaled 2,740,929 thousand yen, a 1.3% decrease compared to the same period in the previous fiscal year.See it on page 10
03
The online business segment, driven by downloadable content, was the company's most profitable division, generating 588,335 thousand yen in sales and 337,246 thousand yen in operating profit.See it on page 3
04
The package software business generated 2,029,249 thousand yen in sales but yielded only 37,096 thousand yen in operating profit, despite the release of 14 titles across domestic and international markets.See it on page 3
05
The company's financial position remains stable with total assets increasing to 2,960,913 thousand yen, supported by growth in cash, deposits, and investment securities.See it on page 8
06
Non-core operations, including contract development and 'Prinny Club' amusement facilities, contributed minimal revenue and recorded a minor operating loss.See it on page 4

Summary

Nippon Ichi Software’s third-quarter report for the fiscal year ending March 2015 provides a comprehensive overview of the company’s financial performance and operational status for the period spanning April 1, 2014, to December 31, 2014. The primary purpose of the report is to disclose consolidated financial results and business developments to stakeholders in accordance with the Financial Instruments and Exchange Act of Japan.

The company reported a consolidated net sales figure of 2,740,929 thousand yen, representing a slight decline of 1.3% compared to the same period in the previous fiscal year. Profitability saw a more significant contraction, with operating profit falling by 59.3% to 194,911 thousand yen and quarterly net profit decreasing by 73.8% to 104,529 thousand yen. These results reflect a challenging environment in the consumer game industry, which has faced a general trend of market contraction despite the release of 14 titles across domestic and international markets during the period.

Segment performance varied, with the package software business generating 2,029,249 thousand yen in sales and 37,096 thousand yen in operating profit. The online business segment proved to be the most profitable, contributing 588,335 thousand yen in sales and 337,246 thousand yen in operating profit through the distribution of downloadable content. Conversely, the license business and other operations, including contract development and the management of "Prinny Club" amusement facilities, yielded smaller contributions, with the latter recording a minor operating loss.

The financial position of the group remains stable, with total assets increasing to 2,960,913 thousand yen, largely driven by growth in cash, deposits, and investment securities. The report, which underwent a quarterly review by an independent audit firm, confirms that there were no significant changes in business risks or management contracts during the reporting period. The company continues to focus on its core gaming portfolio while navigating a shifting landscape between traditional console markets and the expanding mobile application sector.