Nintendo promises Japan staff a 10% raise despite falling Switch sales

Nintendo, unlike other tech firms that respond to tough economic times by firing large numbers of workers (including Microsoft with significant impacts on its gaming business), is moving the opposite way. Nintendo promises a 10% increase in salary to its employees in Japan, despite lowering profit and sales estimates in the most recent financial results.

According to Reuters, Nintendo president Shuntaro Furukawa told an earnings call on Tuesday that “it’s important for our long-term growth to secure our workforce.”

This seems a surprise move considering the recent actions taken by Western tech CEOs. Sales of Switch hardware and games continue to be strong as the console nears its sixth birthday — it is now officially the third-best-selling game console of all time — but Nintendo’s net sales and profits are down, while hardware sales are declining quite sharply for the second year in a row. Nintendo blamed its poor performance on exchange rates and supply issues. Its stock price dropped 7.5% to the Tokyo Stock Exchange. That’s its worst drop in almost a full year.

These conditions aren’t the ones under which an organization would offer its employees a two-digit pay increase. But Nintendo is different — and so is the Japanese labor market. Reuters reports that Japan is putting pressure upon employers to raise wages in order to fight inflation. However, companies must also offer competitive salaries to meet labor shortages due to low birth rates and declining immigration.

This is part of the strong Nintendo tradition that cares about its employees. As many pointed out in the wake of the wave of “efficient” tech layoffs in January, beloved former Nintendo president Satoru Iwata once said: “If we reduce the number of employees for better short-term financial results, employee morale will decrease. I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world.”

It’s good to see Furukawa following his predecessor’s advice.