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[Thick Thighs Save Lives]

Disgaea series developer Nippon Ichi Software (NIS) has recently announced their decision to shift from contract work for other developers to working more on in-house games, which they predict will result in significant financial losses. Not long ago, NIS also presented as many as 5 new original titles set to release in 2025 and 2026, with the developers admitting having to take many creative workarounds amidst rising development costs and financial constraints.

As Kabutan reports, Nippon Ichi Software announced a revision of their financial forecast on June 20, predicting a deficit of 254 million yen (around 1.7 million USD) for the first half of the financial year – higher than the originally predicted loss of 84 million yen (around 570,000 USD). The developer also estimates that yearly profits for the full fiscal year will drop by 52.6% – from the originally planned 325 million yen to 150 million yen.

NIS states that the main reason for this deficit was their decision to "reassess and revise" their contracts with other game companies, which suggests they have pulled out of or scaled down on some of their co-development work for clients. Apparently, the development cycle for these projects ended up lasting longer than planned, exceeding the original deadlines and causing NIS to eventually withdraw from them. As NIS is paid for this contract work based on the percentage of the project's overall completion (as opposed to being time period-based) – this means that they will only be paid for the portion of work they did before pulling out of the contracts. This is what has caused projected losses to far exceed the previous forecast. However, NIS likely considers this a short-term loss necessary for them to further shift their focus to developing in-house IPs.

Nippon Ichi Software has always been leaning towards making original IP content – being a mid-sized company, they point out that their survival depends on doing things differently than triple-A studios, and that includes making bolder choices in developing games and embracing the creativity that comes with financial constraints. With 5 new IPs coming over the next two years, this shift from contract work to working on in-house games doesn't come as a surprise at all considering the studio's aspirations – in fact, it could be the push NIS needed to take on more original projects.

Nippon Ichi Software faces losses over prolonged contract work for other companies, announces further shift to its own IPs - AUTOMATON WEST

Nippon Ichi Software plans to shift from contract work to making more in-house IP games, predicting a loss of over 245 million yen.

automaton-media.com

 

[DeltaPolarBear]

Interesting. So they were helping other people with their games but it got dragged on too long. And now they had to break contract in order to making their own games. Didn't realize the long dev cycle has that kind of effect.

Also, since they were paid by the percentage completion of the game, if the dev time goes too long doesn't that also means more work for less money? Like, a game that took 8 years rather than the planned 6 years would still pay the same, so they are getting ripped off for the extra 2 years of work. No wonder they broke the contract, they were losing money either way. Might as well cut their loses early and go make something else.

 

[Thick Thighs Save Lives]

thicc_girls_are_teh_best I remember you made a thread about NIS's financial situation a while back, so you should check this news out.

 

[IAmRei]

Outsource works are often twinsides of coin or blades, if the works are dragging too long, so does the budget goes. And the rise of dev cost are also burden studio. They should split the forces and other team to make IP with shorter dev cycle but accurate to the targeted market. But these days, market can shift within months. And hard to predict for safe reach.
I can only wish they have good luck in the near future...

 

[nial]

It always surprises me that NIS is still around when they seem to be at risk of closing all the time. Remember when Disgaea RPG almost completely destroyed themP

 

[Madonis]

I wonder if there is more information about those other games where they worked as a contractor.

 

[yet_another_alt]

They should shorten their dev time by recycling assets and gameplay, oh wait....

 

[mayham2199]

God just please hurry and finish the Trails series before something happens to this company.

 

[Mayar]

Still, I'll never forgive them for moving Disgaea from 2D to 3D...

 

[yet_another_alt]

God just please hurry and finish the Trails series before something happens to this company.

Wrong company.

 

[ReyBrujo]

Gimme my next Labyrinth of, come on.

 

[EviLore]

Haven't bought anything from them since somewhere around Phantom Brave and Disgaea 2? That's probably a while ago.

 

[Roman Empire]

Gimme my next Labyrinth of, come on.

Just played labyrinth of refrain not long ago and it is just so good. I hope NIS don't close as I'd like another installment in the franchise. After Disgaea 5 I lost interest in the series. I think these are the only NIS IPs I play tbh.

 

[ReyBrujo]

Just played labyrinth of refrain not long ago and it is just so good. I hope NIS don't close as I'd like another installment in the franchise. After Disgaea 5 I lost interest in the series. I think these are the only NIS IPs I play tbh.

Galleria is the continuation with lots of quality of life improvements though it's unrelated to Refrain, in fact I played Galleria first so Refrain felt rough.

 

[mayham2199]

Wrong company.

Oh you're right they've just been a publisher for some of the games. Good to know.

 

[Kataploom]

Ouch, it looks like many Japenese studios have been diversifying their services that way, it's a shame it doesn't work as expected these days

 

[BennyBlanco]

I'm still mad at them for what they did to my precious Disgaea

 

[Danny Dudekisser]

Probably the right plan for them, honestly. I'm curious how this will affect the US division's activities, or if it'll impact them taking on more Trails games in the future (assuming the Skies remake is a one-off).

 

[Roman Empire]

Galleria is the continuation with lots of quality of life improvements though it's unrelated to Refrain, in fact I played Galleria first so Refrain felt rough.

Gonna give it a try then. Thx.

 

[Zacfoldor]

I always liked them but never recaptured my early Disgaea love.

I'm still willing to buy their games but Spike Chunsoft and even Xseed has won a lot more of my business lately in this arena. Anime went super mainstream which brought a lot of competition to NIS so I can understand they are struggling without a breakout IP.

I hope they find something.