Japan’s No. 1 game software, hidden winners of yen depreciation-earning 60% in North America-Bloomberg

DisgaeaA game software development company known for its series, etc.Nippon Ichi SoftwareIs a hidden winner in the rapidly depreciating yen. Approximately 60% of sales will be earned in North America, and foreign exchange gains may boost the company’s business results for the current fiscal year (ending March 2023).

Inside The Game Developers Conference

People waiting for admission at a game event in San Francisco, USA (March 2022)

Photographer: David Paul Morris / Bloomberg

In an interview with Bloomberg, President Sohei Shinkawa said that dollar-denominated earnings were “significantly large” due to the depreciation of the yen and that he was “positive” in his business performance. He says that he converts dollars into yen every quarter and uses them for game development. On the other hand, he also said, “Foreign exchange is neither ability nor control, and I am not happy.”

Nippon Ichi Software expects sales for the current term to increase 12% year on year to 6,378 million yen, and ordinary income to decrease 15% to 1,433 million yen. The assumed exchange rate, which is the premise of the business performance plan, has not been announced. The ratio of sales by region in the previous fiscal year (ending March 2010) was 27% in Japan, 57% in North America, 14% in Europe, and 2% in Asia.

Almost all game development costs are denominated in yen, and the US subsidiary, which does not have development costs, contributes significantly to profits. Headquartered in the countryside of Gifu prefecture, the company has lower labor costs than its competitors in Tokyo and Osaka. According to the securities report, the average annual income for the fiscal year ended March 2010 was 4.51 million yen.Koei Tecmo HoldingsIs 7.01 million yenSquare Enix HoldingsIs 14.27 million yen.

Popular in North America

Sales of Nippon Ichi Software have continued to grow in North America in recent years.

Source: Nippon Ichi Software

Hideki Yasuda, an analyst at Toyo Securities, who predicts that the current exchange rate of Nippon Ichi Software is 120 yen per dollar, analyzes that there is room for an increase of 7% in sales at 135 yen and 9% at 140 yen. The yen’s depreciation will continue for some time due to differences in the direction of monetary policy in each country, and it is highly likely that the business performance will be revised upward.

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