Nintendo Announces 10 Percent Pay Raise Instead Of Layoffs

Nintendo announced a 20 percent Switch sales drop in its latest financial report, but still plans to institute a 10 percent pay raise, the company told investors Tuesday. While it’s unclear if that hike will trickle down to temporary contractors at the Mario maker’s North American headquarters, some there say they’ve already seen substantial raises over the last couple of months.

“It’s important for our long-term growth to secure our workforce,” Nintendo President Shuntaro Furukawa said during the company’s earnings report today, according to Reuters. The news comes after Japan’s Prime Minister Fumio Kishida recently called on companies to pay workers more after inflation hit its highest point in the country since 1981.

The raises were also announced during an earnings presentation that otherwise included disappointing news. Switch sales fell even though the recently released Pokémon Scarlet and Violet games were the fastest-selling ever in the company’s history, already reaching 20 million. As a result, Nintendo actually announced it will make less money during its current fiscal year than it had previously planned.

The announcement of raises then comes in stark contrast to recent layoffs and cost-cutting measures at Microsoft, Electronic Arts, Take-Two, and others. Roughly 40 developers at Ubisoft’s Paris studio recently went on strike for a day to protest the lack of raises to keep up with the cost of living crisis in France.

Although it’s not clear if Nintendo’s 10 percent salary hike will apply to workers outside of Japan, some contract staff at Nintendo of America in Redmond, Washington said they recently saw substantial pay increases after months of pressing management on the issue. One tester, responsible for checking bugs on some of the company’s biggest releases, told Kotaku their hourly rate jumped from roughly $16 an hour in 2022 to over $20 in 2023.

“I think everyone expressing their frustration about the pay is finally paying off and everyone in the department is discussing it more openly now instead of keeping wages a secret,” they said. That’s an important shift from last spring when Nintendo fired one tester after they asked a question about unions during a department meeting, inspiring many current and former Nintendo of America employees to come forward about feelings of exploitation and mistreatment at the company.

Pay isn’t everything though, and Nintendo of America’s reliance on temporary contract staff rather than converting them to full-time means many workers there still don’t get proper benefits or job security. That’s not a problem entirely unique to Nintendo either. Microsoft was recently blasted by former 343 Industries developers for relying too much on contract staff during the development of Halo Infinite.