Nintendo, a Japanese video game maker, announced on February 7, 2023, its intentions to raise its employees’ base pay by 10 per cent. Despite reducing its full-year profit forecast due to a stronger yen, Nintendo is committed to increasing workers’ salaries.
The hike comes as Japan’s Prime Minister, Fumio Kishida, calls for Japanese companies to pay their employees more as inflation rises in a previously deflationary and stagnant economy. The annual spring labour negotiations in Japan have also sparked this move.
Fast Retailing, the parent company of the Uniqlo clothing chain, was one of the first companies to take action, announcing a pay increase of up to 40 per cent.
Nintendo President Shuntaro Furukawa stated that it is important for the company’s long-term growth to secure its workforce, especially in the face of Japan’s serious labour shortages caused by a declining birth rate and low immigration. The company believes that higher salaries can also help attract talent.
The video game maker, known for creating games such as ‘Super Mario Bros’ and ‘Legend of Zelda’, reduced its operating profit to 480 billion yen ($3.6 billion) for the year ending March 31, significantly lower than the expected 582 billion yen consensus forecast.
In addition to that, Nintendo revised its annual software sales forecast down to 205 million units from 210 million and reduced its Switch console sales target to 18 million units from 19 million.
Despite these changes, the company has no plans to raise the prices of its software or game consoles but is willing to consider doing so if circumstances require it, according to Furukawa. He declined to comment on the potential for a successor to the six-year-old Switch.