Nintendo employees are jolly after the company promised to increase workers' salaries by about 10%. Nintendo promised to retain several employees who may want to leave the company over stagnant employee wages in Japan.
The Japanese video game maker Nintendo Co Ltd said that despite not meeting their expectations in terms of profits last year, they would go ahead and increase their workers' wages.
Japanese Prime Minister Fumio Kishida has called on several tech companies to increase employees' wages due to the increasing inflation around the world. Nintendo President Shuntaro Furukawa, during an earnings briefing, said, "It's important for our long-term growth to secure our workforce."
With Japan preparing for its annual spring round of labor negotiation, many workers, including Nintendo employees, had expected an increase in their wages. However, the new development may come as a surprise as many tech companies are currently announcing several layoffs. Companies like Meta and Microsoft have announced they will be laying off thousands of workers due to the dwindling economy.
After the calls from Prime Minister Fumio Kishida, many companies, including non-tech companies, have announced an increase in their workers' wages. Fast Retailing Co Ltd, the parent of the Uniqlo clothing chain, was one of the first companies that implemented the command of the Japanese prime minister. They increased their workers' wages by as much as 40%. Nintendo has followed suit, and many will likely hike it more depending on economic situations.
Japan is currently experiencing a falling birth rate and low immigration leave, causing several companies to be concerned about the welfare of their employees. The move from Nintendo is in their bid to protect their employees from leaving the company, assuming they find better working conditions.
Nintendo Disappointed With Revenue Earnings
It may surprise many experts when Nintendo announced it would increase workers' salaries by about ten years. This is because the revenue earnings of Nintendo in the last year have been below their expectations as they recorded losses in several aspects of their software sales.
It was reported that the tech giant recently reduced its operating profit by 4% to 480 billion yen ($3.6 billion) for the year to March 31. Refinitiv consensus forecasted that Nintendo would make a profit of 582 billion yen, but it is much lower than what they predicted.
Also, Nintendo Switch console sales have been going differently than predicted. This caused the company to reduce its Nintendo Switch sales target to 18 million units from 19 million. The total software sales for the year forecast has also been reduced to 205 million units from 210 million.
Nintendo President Shuntaro Furukawa has also stated that Nintendo is only planning to increase the price of its products if they are forced to do so due to economic difficulties. Also, when he was asked if Nintendo Switch now had a successor, he declined to comment. Nintendo is competing with many other gaming companies, such as Xbox and Playstation, and it will have to make several reforms to stay at the forefront.