Nihon Falcom Corp. reported a steep drop in second-quarter earnings as the Japanese video game developer struggles with declining sales across its major business segments.
Net income fell 88% to ¥44 million ($296,000) for the six months ended March, the Tokyo-based company said Friday. Revenue decreased 40% to ¥604 million, with licensing operations—which generate most of the firm’s income—seeing a 45% decline to ¥481 million.
The maker of the “Trails” and “Ys” role-playing game franchises cited lower-than-expected advertising costs and foreign exchange gains as factors that helped cushion the profit decline. Despite the weak performance, Falcom maintained its full-year guidance, projecting ¥2.5 billion in sales and ¥800 million in net profit.
The company has pinned its recovery hopes on a packed release schedule for the remainder of 2025, including multiple titles for PlayStation 5 and the yet-to-be-released Nintendo Switch 2, expected in June. Most notable is “The Legend of Heroes: Trails in the Sky the 1st,” a new entry in Falcom’s flagship series that has sold over 8 million copies globally.
Falcom also plans simultaneous worldwide release of several titles, potentially aiming to reverse the significant drop in its international licensing business.
