Nintendo recently increased the salaries of its employees by 10% in an effort to retain the company’s talented employees and to remain competitive with other studios. The Kyoto-based company also increased the starting salary for new graduates. Nintendo president Shuntaro Furukawa admitted there had been some comments about “less dividends they would get” from implementing the pay hikes, but plenty of institutional investors praised the initiative for securing future talent at Nintendo.
Q: This fiscal year, you announced an increase in the base salary of employees in Japan, and I think that is a very positive initiative in retaining talented employees. On the other hand, increasing the base salary of employees reduces the resources for dividends, so I can imagine that there has been some kind of negative feedback from institutional investors. Please describe the reactions of institutional investors, employees and other companies in the industry regarding this wage increase.
Furukawa: I believe that the most important factor in maintaining our high level of competitiveness is valuing the employees who have created various popular products and built our brand. We are currently facing unprecedented levels of global inflation, and in Japan we understand that people are facing increasing f inancial pressures in their daily lives. For this reason, in order to cope with the long-term and constant changes in the environment, Nintendo increased the base salary for all employees in Japan by 10%, separate from the annual salary increase. In addition, in order to strengthen our competitiveness in the labor market and increase the company’s overall capabilities in the medium and long term, we have also increased the starting salary for newly hired graduates in Japan by approximately 10%.
There were different reactions to this salary increase, we received comments that funds for dividends will be reduced, but there were also positive responses from institutional investors who appreciate the human resources strategy from a medium and long-term perspective.
The level of competition for human resources is increasing within the gaming industry and we understand that many companies, not just Nintendo, increase the salaries of new hires in different ways.
