Nintendo announces 10% pay raise for all Japanese employees to drive long-term growth

Nintendo has decided to raise salaries for all current and new employees in Japan. This measure should contribute to the long-term growth of the company, which has cut its full-year financial outlook.

What happened?

• Nintendo President Shuntaro Furukawa made a statement during an earnings briefing as part of the company’s report for the nine months ended December 31.
• “It’s important for our long-term growth to secure our workforce,” he said (via Reuters), announcing a 10% salary hike for all Japanese staff.
• The move will also help Nintendo increase its hiring power and attract new talent amid a challenging economic environment.
• This follows Prime Minister Fumio Kishida’s call for domestic companies to increase wages as inflation continues to rise and the country prepares for its annual round of labor negotiations.

Key takeaways from Nintendo’s financial report

• Nintendo’s revenue for the nine months ended December 31 reached ¥1.29 trillion ($9.8 billion), down 1.9% year-over-year.
• The company’s net profit was ¥346.2 billion ($2.6 billion), down 5.8% year-over-year.
• Nintendo Switch sales reached almost 15 million units (down 21.3% year-over-year), with game sales reaching 172.1 million copies (down 4% year-over-year).
• Pokémon Scarlet / Violet, Splatoon 3, and Nintendo Switch Sports were the best-selling titles during the nine-month period, with total sales of 20.61 million, 10.1 million, and 8.6 million units respectively.

Given the decline in revenue and profit, Nintendo has lowered its financial forecast for the full year ending March 31. The company now expects to reach ¥1.6 trillion ($12.1 billion) in revenue and ¥370 billion ($2.8 billion) in net profit, down 3% and 7.5% from previous forecast.