Nippon Ichi Software Financial Results: Fiscal Year Ended March 2015

Key insights

7 takeaways

01
Nippon Ichi Software experienced a sharp decline in profitability for the fiscal year ended March 31, 2015, with operating profit falling 75.9% to 139 million yen and net income dropping 95.9% to 19.7 million yen.See it on page 1
02
Consolidated net sales remained stagnant at 3.67 billion yen, reflecting only a 0.1% increase compared to the previous fiscal year.See it on page 14
03
The core Package business segment, which released 19 global titles, recorded an operating loss of 81.3 million yen.See it on page 4
04
The Online business segment served as a primary profit driver, generating 820 million yen in sales and 486 million yen in operating profit through digital distribution and PlayStation Network sales.See it on page 4
05
To address financial instability, the company plans to diversify its platform strategy by expanding into the PC market via Steam and continuing development of mobile applications.See it on page 11
06
International growth remains a strategic priority, with the North American subsidiary, NIS America, Inc., continuing to play a critical role in software distribution.See it on page 10
07
The company maintains a conservative financial outlook, proposing a year-end dividend of 2 yen per share for the upcoming fiscal year.See it on page 1

Summary

Nippon Ichi Software’s financial results for the fiscal year ended March 31, 2015, reflect a period of stagnant revenue growth and a significant contraction in profitability. The company reported consolidated net sales of 3.67 billion yen, representing a marginal increase of 0.1% compared to the previous fiscal year. However, operating profit plummeted by 75.9% to 139 million yen, and net income fell by 95.9% to approximately 19.7 million yen. This downturn is attributed to the costs associated with the company’s ongoing investment in new intellectual property and the challenges of navigating a shifting gaming landscape.

The company operates across four primary segments: Package, Online, License, and Other. The Package business, which serves as the core of the company’s operations, released 19 titles globally but recorded an operating loss of 81.3 million yen. Conversely, the Online business remained a strong performer, generating 820 million yen in sales and 486 million yen in operating profit through digital content distribution and PlayStation Network sales. The License and Other segments contributed smaller portions to the overall financial results, with the latter focusing on contract development and the operation of the "Prinny Club" amusement facilities.

Geographically, the company continues to leverage its North American subsidiary, NIS America, Inc., to distribute software, with international markets playing a critical role in its growth strategy. Looking ahead, the company plans to mitigate risks by diversifying its platform strategy, including expanding into the PC market via Steam and continuing to develop mobile applications. Management remains focused on strengthening its core product development, fostering new intellectual property, and enhancing group-wide synergies to stabilize future earnings and improve operational efficiency. The company maintains a conservative dividend policy, planning a year-end dividend of 2 yen per share for the upcoming fiscal year.