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Nippon Ichi Posts Loss as Game Development Costs Surge

The game maker's operating profits turned negative as it invests in overseas expansion
Japan
n 3851.TSE Games 75
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Nippon Ichi Software Inc. swung to a loss in its fiscal first half as the Japanese game developer ramped up spending on new titles aimed at global markets.

The company reported a net loss of 171 million yen ($1.1 million) for the April-September period, compared with a 290 million yen profit a year earlier. Sales dropped 20% to 2.45 billion yen.

Development costs rose significantly for upcoming games including “Phantom Brave: The Ghost Fleet and the Missing Hero,” which marks the company’s first simultaneous worldwide release. The entertainment segment, which accounts for most revenue, saw operating profit plunge 90% to 43 million yen.

The Gifu-based developer released two major titles during the period – “Disgaea 7: All the Games Have Been Included” and “Marl Kingdom Doll Princess 25th ANNIVERSARY COLLECTION.” The company continues to distribute games through PlayStation Network, Nintendo eShop and Steam platforms.

Nippon Ichi withheld its full-year guidance, citing uncertainty around investments needed for restructuring. Its student dormitory business, a minor segment operating three facilities in Gifu Prefecture, remained unprofitable.

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