[1] His efforts won out and Shinkō Kinema, Daito Eiga, and the production arm of Nikkatsu (the Nikkatsu theaters did not take part in the merger) were merged in 1942 to form the Dai Nippon Eiga Seisaku Kabushiki Kaisha, or Daiei for short.

At its peak, Daiei featured such talent as the actors Raizō Ichikawa, Shintaro Katsu, Kazuo Hasegawa, Fujiko Yamamoto, Machiko Kyō, and Ayako Wakao; the directors Kenji Mizoguchi, Kon Ichikawa, Yasuzo Masumura, Tokuzō Tanaka,[7] and Kenji Misumi;[7] and the cinematographer Kazuo Miyagawa and Fujirō Morita.

Suffering from Nagata's profligacy and an industry-wide decline in attendance, Daiei tried to stay alive by teaming up with Nikkatsu to create Dainichi Eihai, but eventually declared bankruptcy in December 1971.

Art director Yoshinobu Nishioka and some of the studio's other employees founded Eizo Kyoto Production.

[1] The company continued as a producer, making only a small number of films, some of which were big budget spectaculars like the international co-production The Go Masters (1982), a new Gamera trilogy (1995, 1996 and 1999), art house hits like Shall We Dance?