Nippon Ichi Software: Second Quarter Financial Results for the Fiscal Year Ending March 2013

This financial report details the performance of Nippon Ichi Software for the second quarter of the fiscal year ending March 2013, covering the period from April 1, 2012, to September 30, 2012. The document serves as a formal quarterly review, prepared in accordance with the Financial Instruments and Exchange Act, and includes audited consolidated financial statements.

The company experienced a significant downturn in financial performance during this period. Net sales reached 1,000,471 thousand yen, representing a 15.5% decrease compared to the same period in the previous year. The firm reported an operating loss of 46,217 thousand yen, a sharp reversal from the 222,584 thousand yen operating profit recorded in the prior year's second quarter. Consequently, the company posted a quarterly net loss of 89,239 thousand yen. This decline is attributed to a challenging market environment where demand for major hardware platforms stabilized, and the company faced increased development costs for upcoming 20th-anniversary titles.

Segment performance varied, with the core package business struggling, recording an operating loss of 79,382 thousand yen despite the release of six titles across domestic and international markets. Conversely, the online and licensing segments remained profitable, contributing 117,598 thousand yen and 34,503 thousand yen in operating profit, respectively. The company’s financial position shows an increase in total assets to 2,355,969 thousand yen, largely driven by higher inventory levels, while total liabilities rose to 1,297,185 thousand yen due to increased short-term borrowing. The report concludes with an independent review by Azusa Audit Corporation, which found no significant issues regarding the accuracy of the financial statements presented.