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AltayCap's avatar

Small update:

DISGAEA 7 is well received in Japan. Fans in the U.S also seem to be very positive. Releasing in the fall in English globally on all platforms. Uptick in JP seems to be a bit slower than DISGAEA 6 which was not as well received. Hardcore fans disliked that installment, but D7 is much more universally liked, so sales will pick up.

They launched Labyrinth of Galleria: The Moon Society globally in English on all platforms. Well received and seems to be doing well! It's one of those games that you can sink hundreds if not thousand plus hours into!

Management maintained their earnings and sales forecast for the year (only 1 quarter left). I think they lowballing it because they held a 30th anniversary sale for their back catalog. Plus the launch of D7 in JP will be included in the Jan-March quarter.

My super conservative estimate for the stock is 1.4x book (NiS is 0.8) which is where Falcom trades at, so over 50% higher. I think Falcom is cheap and own it (but in smaller size). Falcom is the best comparable to NiS.

NiS is a hair over 5% position for me. I'm comfortable owning more and have been sizing in slowly. Will own about 1% of the company soon then just sit and wait. This is my largest single stock position for a JP listed stock. Checks a lot of boxes for me.

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AltayCap's avatar

Small update (none of this is really relevant for the longer term hold):

Disgaea 7 launched in Japan a couple days ago and seems to be well received. Fans of the game are universally positive about the game on Reddit, whereas the last installment (Disgaea 6) was disliked by many. PS4/PS5/Switch physical versions all sold out on Amazon.jp, but this doesn't mean much. Most consumers are purchasing games via Nintendo/PlayStation store anyway (higher margin for NiS).

We'll likely get a Western release date on the 30th anniversary NiS stream https://nisamerica.com/event/nis30th/ which should also feature some other new game announcements (mostly on the publishing side of the business for NiS America).

Also in case anyone is curious, I'm at a little over 3% of my portfolio in NiS. I'm comfortable getting it to 5% slowly. As they compound their book value I expect some slow and steady returns with the possibility of an explosion to the upside if they get their act together and develop a good mobile gacha game.

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