Nippon Ichi Software would be in financial crisis with employees unable to pay

By Alistair Wong . May 19, 2019. 3:30 pm

The news was broadcast by various Japanese media, including Nippon Ichi Software, the studio behind the Disgaea series and other titles like Destiny Connect, Yomawariand more, is in financial difficulty and would need funds to pay its employees.[Thankyou[Thanks[Merci[ThanksGamebiz.jp!]

The news is based on a recent announcement by the company via the JASDAQ stock exchange that Nippon Ichi was asking for an MS warrant share, an operation that is considered by traders as a last resort. It is essentially a way of raising money by selling cheaper shares used by companies that have become unable to borrow money from the bank or investors. The disadvantage is that it hurts investors by subjecting them to losses because stocks are now worth less. This operation can be used repeatedly to raise funds (and this is the first time that Nippon Ichi, which means that Nippon Ichi will not close tomorrow), but it causes a loss of confidence of investors.

With regard to the allegations of non-payment of employees, this is a deduction based on the announcement itself, according to which the total amount of funds requested, of 573 638 750 yen , is the cost of developing a game, including the compensation of employees. In the event that they fail to raise the total amount, the salaries of the employees will be prioritized.

While Nippon Ichi Software recently performed well with Chorus Labyrinth and Disgaea 5 Complete, because of sales abroad, overall, their games did not work well, despite the incursion into new IPs such as Yomawari, the Refrain series, The princess guide, and more. Destiny Connect, one of their most ambitious new IPs for RPGs with a world in 3D, topped the top 20 sales during its release week.

The other big misstep of recent times is with Disgaea RPG, their mobile title that failed to recover the costs invested. The game has entered the game of maintenance since its launch on March 19, and was finally withdrawn in April, with at least three months to repair everything, which means that additional costs are invested in the project without any refund. Disgaea RPG also caused a drop in inventories in April.