Disgaea RPG Studio Nippon Ichi in Financial Trouble, Withholding Salaries From Employees
Disgaea RPG studio, Nippon Ichi Software, is in dire financial straits and cannot afford to pay staff after the mobile title was de-platformed.
According to reports from various Japanese news outlets (and relayed through Twitter user HDKirin), Nippon Ichi Software is in dire financial straits. The development and publishing company has been suffering for quite some time due to poor sales of their titles in Japan. And now it seems, due to debilitating issues surrounding their latest mobile title Disgaea RPG, NIS can no longer afford to pay their employees:
News of Disgaea RPG (smartphone game that's now delayed indefinitely) has resurfaced in a bad way.
Reports starting to come out that NIS is not able to pay the salaries of its employees & have resorted to a MS (Moving Strike) Warrant as a last resort. https://t.co/ICVtR95bnY pic.twitter.com/CIig3Zy2Se
— HDKirin (@HDKirin) May 18, 2019
In order to raise enough money to pay for the development staff’s labor costs, NIS has resorted to an MS (Moving Strike) Warrant. A MS Warrant is a stock term, a method of raising funds that otherwise cannot be acquired through the normal means of borrowing from banks or investors, due to already being deficit.
The company raises money buy selling their stocks at a cheap price. Security companies profit greatly from buying said cheaper stocks while that company’s investors are ultimately the ones who lose the most since the stocks they currently hold lose money and lead to the stock’s overall decline.
Japanese site Ha-Navi confirms that Disgaea RPG is the main cause for this last decline that resulted in the company unable to pay wages. On March 19th of this year, the title — a collaboration effort between NIS and Forward Works (a subsidiary of Sony) — began service.
However, since that launch the game had to undergo long-term maintenance due to its many and major issues and was taken down. Service has not been restored as of this writing. Naturally, as revenue cannot be gained from a game no longer available on the market, the company has no way to recoup their losses and pay the staff’s salaries.
The Forward Works official blog released a statement on the issue, apologizing to players for the ongoing issue. The official Twitter account also released a status update, encouraging players who purchased paid items by March 31st to submit their inquiry to a support email account. Considering this tweet came out on May 17th, a full two months after the game launched and shut down, it seems all parties involved are reluctant to refund the money.
— 【公式】魔界戦記ディスガイアRPG (@Disgaea_App) May 17, 2019
Considering the high quality of the original Disgaea 5 and its re-release on the Nintendo Switch, it’s a shame that NIS is facing such a difficult time. It is not clear how this news will impact the company’s upcoming titles.