Despite unprecedented yearly losses, Japanese game contractor Tose expects that Nintendo’s new console will cause a big turnaround 

After 44 consecutive years of being profitable, Japan’s major co-development company TOSE has reported a yearly deficit. According to their latest financial statements (as reported by Gamebiz), the developer, which has a track-record of making games for publishers like Nintendo, Capcom, Square Enix and Bandai Namco, saw an annual net loss of 260 million yen for the fiscal year ending August 2024. However, based on their forecasts, TOSE expects to make a big turnaround in the following fiscal year. 

TOSE has previously mentioned sustaining losses due to major client companies cancelling games, for which the developer was unable to get compensation. The company cited that “Several companies have seen a change in their game development policies and are reevaluating titles that are in development or have been developed.” As a contractor, TOSE ‘got the short end of the stick’ as publishers realigned themselves in the face of worsening market conditions. 

In response to adverse financial conditions, the company liquidated an overseas subsidiary in The Philippines and well as a development center in Japan to refocus its resources, further incurring a 121-million-yen loss. However, TOSE’s forecast for the following fiscal year (as reported by Otaku Soken) suggests that the company expects to turn profitable again by August 2025. 

The basis for this forecast has to do with TOSE’s structural reforms, but also with the announcement of Nintendo’s new console, which is expected to bring “a particularly favorable wind” to the market. When the next-generation console’s release date is made public, TOSE expects that the demand for game development will rise. The developer also expects that demand for PS5 and PC titles will remain strong throughout the year. In addition, TOSE has several large projects underway, some of which are scheduled to launch in the first half of the fiscal year.