Nippon Ichi Software, the creator of the series Disgaea, Phantom Brave, and Labyrinth of Refrain, has run out of money and can't pay its employees due to the recent failure of Disgaea RPG.
While the company saw a lot of early success thanks to its intricate puzzle and adventure games, it wasn't until its first Disgaea game that things really began to take off. From that point forward, the company went on to create some of the most well known JRPG's in the industry. As its popularity grew, the company sought to expand internationally and chose to create NIS America due to the increased demand for its games in the U.S.
However, the company saw its first signs of trouble during 2008 and 2009, as financial reports revealed that its sales were down 97 percent from the previous year. The company would rebound however and seemed to be stabilizing until the failure of its latest Disgaea release.
This news is certainly troubling to many in the industry given the fact that the company seemed to have a dedicated fanbase that was always willing to buy its latest IPs. A recent example of this is seen with Labyrinth of Refrain: Coven of Dusk which not only received high reviews, but went on to sell over 70,000 copies. While we may never know the full cause of the company's current financial situation, its clear that drastic changes will need to be made to ensure an event like this doesn't happen again.
According to gameinformer, Nippon Ichi's problems stem from a slow down in domestic sales and the shutdown of Disgaea RPG for mobile after only two short weeks of operation. The shutdown of the game came after technical issues made it almost impossible to play for most users. Rather than fix the game, Nippon Ichi immediately removed it and encouraged those who bought the game to ask the company for a refund. The company's current financial situation is so dire that they have resorted to selling off their stocks at an extremely reduced rate just to garner enough funds to pay their employees.
While it is a bit puzzling that the company wouldn't take the time to fix its game, it is certainly not the first time that something like this has been done in the gaming industry. Given that mobile gaming has really started to take off in the last couple years, the move by the company to bring Disgaea to mobile seemed logical. With that being said, Nippon Ichi should have learned from Blizzard's Diablo Immortal fiasco and asked consumers if they even wanted a mobile version.
Though instances like this happen to companies all the time regardless of their reach or popularity, that doesn't mean that the failures couldn't have been avoided. Given that Nippon Ichi has had financial scares in the past, it doesn't make sense that it wouldn't be overly cautious. If the company survives, it will need to seek out new employees who will ensure that future games are ready for launch.