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Nintendo recently increased its employee salary levels 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 graduate hires. Nintendo president, Shuntaro Furukawa, acknowledged that there were some comments about the “lesser dividends they’d get” because of implementing the pay increase, however plenty of institutional investors praised the initiative for securing future talent across Nintendo.
Q: This fiscal year, you announced an increase in employee base salary in Japan, and I think that is a very positive initiative in retaining talented employees. On the other hand, increasing the employee base salary decreases the resources for dividends, so I can imagine there was some sort of negative feedback from institutional investors. Please describe the reactions from institutional investors, employees, and other companies in the industry regarding this wage increase.
Furukawa: I believe the most important factor in maintaining our high level of competitiveness is to value the employees that have created various popular products and built our brand. Currently, we are experiencing unprecedented levels of global inflation, and in Japan, we understand that people are facing increasing financial pressure in their daily lives. For this reason, to deal with long-term and continuing changes in the environment, Nintendo increased the base salary for all employees in Japan by 10%, separate from the annual wage increase. In addition, to strengthen our competitiveness in the job market and increase the overall capabilities of the company over the medium and long term, we also increased the starting salary for new graduate hires in Japan by approximately 10%.
There have been various reactions to this wage increase, and we received comments stating that the resources for dividends would decrease, but there were also positive responses from institutional investors who value human resource strategy from a medium-to-long-term perspective.
The level of competition for human resources is increasing within the game industry, and we understand that many companies, not just Nintendo, are increasing wages for new hires through a variety of methods.