Feb 17·edited Feb 17Author

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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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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Disgaea 7's demo seems to be receiving universal praise from fans of the franchise, at least in the West. It's considered a big improvement over Disgaea 6 which many disliked. Definitely an incremental positive!

See the comments/posts on here. The vast majority of comments are positive:



I'm not cherry picking either. Feel free to look around yourself:


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Do you mind sharing the other companies you have on your gaming basket (apart from Nihon Falcon and Nippin Ichi)?

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This story reminds me of Nihon Falcom Corporation (3723.T). Have you looked into it?

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Hey good write up. I like the setup of a cheap company with a potential catalyst of value creation (new game and maybe a new dividend or buyback structure)

Is there any Investor Relation in English or is there only Japanese available?

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The main risk / bear case is that we never see the future earnings in our pockets. Share price can remain low for very long time, even if net cash increases over time.

My possible biggest downside scenarios:

No big change in div / buybacks, earnings are retained. The company will be bought in the future and we just get a small premium. That happens more often in japan than one can think.

How come your conviction that the Founder will change that? He was on board before, and at least from a shareholder perspective nothing changed.

You can manage that risk over position sizing of course. As a hardcore gamer i know their IPs/games very well, i like their niche and i think at least some of their future earnings are predictable. So basically there should be an upside. Still, with japan, those upside could never come to your pocket sadly.

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Nice write up. Any context on why isn't the company returning more cash back to shareholders?

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