News has come from various Japanese news outlets that Nippon Ichi Software, the studio behind the Disgaea series and other titles like Destiny Connect, Yomawari, and more, is in financial trouble and allegedly need funding to pay employees. [Thanks, Gamebiz.jp!]
The news is based off a recent announcement by the company via the JASDAQ stock exchange that Nippon Ichi was applying for an MS Warrant Stock, a move which is seen by traders as a last resort of sorts. Essentially, it’s a way of raising funds by selling stocks for cheaper used by companies who have become unable to borrow funds from the bank or investors. The downside is that it screws over investors by incurring losses as stocks are now worth less. While this move can be used several times to raise funds (and this is Nippon Ichi’s first, meaning Nippon Ichi isn’t going to just shut down tomorrow), it incurs loss of trust from investors.
As for the allegations about not being able to pay employees, this is a deduction based on the announcement itself, which states the total requested funds raised of 573,638,750 yen is for the cost of developing a game, including employee pay. In the event that they don’t manage to raise the full amount, employee salaries will be prioritized.
While Nippon Ichi Software recently did well with Labyrinth of Refrain and Disgaea 5 Complete, owing to overseas sales, as a whole their games have not been doing well despite the foray into new IPs such as Yomawari, the Refrain series, The Princess Guide, and more. Destiny Connect, one of their most ambitious RPG new IPs featuring a 3D world, went outside the top-20 in sales on its week of release.
The other big misstep in recent times is with Disgaea RPG, their mobile title which has failed to recoup invested costs. The game entered maintenance hell since its March 19 launch, and ended up being pulled in April for further fixing, with at least three months needed to fix everything, which means further costs are being put into the project without any money earned back. Disgaea RPG also caused a stock plummet back in April.