NJ Holdings Inc. reported an 88% collapse in annual profit as the Tokyo-based company grappled with declining revenue from completed gaming development projects and reduced operational support contracts.
Net income fell to ¥31 million ($210,000) for the fiscal year ended June 2025, down from ¥267 million a year earlier, according to results released Thursday. Revenue dropped 6.1% to ¥9.11 billion ($61.7 million) while operating profit declined 50% to ¥51 million.
The game development segment, which accounts for roughly 72% of total sales, saw revenue contract 14% to ¥6.54 billion as several projects moved past their development peaks and the company scaled back operational support activities. Operating profit in the division fell 31% to ¥236 million.
NJ Holdings, which owns game studio tri-Ace known for titles including Star Ocean and Valkyrie Profile, has struggled to maintain momentum as development cycles for major projects reached completion phases. The company provides outsourced development services to larger gaming publishers while also working on proprietary titles.
The mobile communication segment provided some relief, with revenue jumping 22% to ¥2.51 billion as new retail store openings contributed to growth. The division operates carrier shops selling mobile devices and services for telecommunications operators. Segment profit more than doubled to ¥102 million.
Despite the challenging year, management projects a sharp recovery for fiscal 2026. The company forecasts revenue rising 8.8% to ¥9.91 billion with operating profit surging 194% to ¥150 million. Net income is expected to climb 245% to ¥110 million.
The earnings reflect broader pressures facing mid-tier Japanese game developers as the industry consolidates around major publishers with deep pockets for extended development cycles. Mobile gaming revenue in Japan fell 17% in the first half of 2024 according to industry data, though domestic titles continue dominating local charts.
