Nippon Ichi Software drifts West

Bearish year for Nippon Ichi Software (NIS). The Japanese publishers sees its profits collapse 95%, from ¥481 million to ¥19 million.

It was clear that the 2014-2015 fiscal year didn’t get any hit game. The Firefly Diary, Furai Nikki, The Awakened Fate Ultimatum, Shin Hayarigami and Oedo Blacksmith all gravitated between 10’000 and 20’000 units sold. Disgaea 5, the lastest installment of the famous tactical-RPG series, exclusive to the PS4, did barely better than the PSVita port of Disgaea 4 the year before (33’000 vs 29’000). In the previous period, NIS had benefited from the unexpected success of The Witch and the 100 Knights, which neared 80’000 sales. Although the culprit(s) seemed to have been indentified, NIS’s statement of income says otherwise.

Indeed, NIS’s income does go up slightly : the games are not the problem. However, the cost of sales jumps 15%! Without extraordinary income, the damage to the net result is inevitable. Too bad, because Western sales are starting to make up for the losses at home : the NIS America branch has revenues up 25%. It’s astonishing how the Californian offices have grown big in NIS’s business. The income registered by NIS America now accounts for 2/3 of the total revenues of the group, whereas it was 50% last year. In short, Nippon Ichi Software has virtually become a western company! Last good news, digital revenues are up 15%. The publisher pockets ¥800 million for an operating result of nearly ¥500 million. That means NIS gets a 50% margin on the Playstation Store. Rather nice…

NIS’s under-performing this year is probably an accident. The publisher probably expected a hit title that never came, the 2014 ine-up being poor. However, NIS now knows it has to turn its focus towards the West to get leverage. They have already announced a series of partnerships in this aim : Persona 4 Dancing All Night, Lost Dimension, Dungeon Travelers 2, Rodea the Sky Soldier et Legend of Heroes Trails of Cold Steel and several Etrian Odyssey titles will join Disgaea 5 on European and American shelves in the coming months and surely will improve the financials. NIS’s El Dorado in California might just have begun.

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