News

Old School Capcom Beats Forecast

Packaged goods, primarily console revenue, boosted Capcom Co., Ltd. significantly beyond forecasts for the fiscal year ending March 31. A year ago the company projected that it would sell 6 million packaged units during the 12-month period and ended up selling 8.9 million units.

An official guide book for Monster Hunter Explore in Japan.
An official guide book for Monster Hunter Explore in Japan.

Out of total net sales of ¥52.5 billion ($480.5 million), ¥31.2 billion ($285.6 million) was packaged goods revenue. Packaged goods sales were originally forecasted to be ¥26 billion ($240 million). PC game content did not quite meet goals, generating ¥7.1 billion ($65 million) versus an expected ¥8 billion ($73.1 million). Digital download content revenue for the fiscal year was ¥10.9 billion ($99.7 million), exceeding the ¥9 billion ($82.3 million) expected. Mobile content sales were significantly off target at ¥3.3 billion ($30.2 million), while it was projected ¥5.5 billion ($50.3 million) in revenue would be achieved. Despite such misses, Capcom saw its operating income for the fiscal year reach $12.1 billion ($110.7 million) while it only expected to achieve ¥11 billion ($100.7 million).

CLICK BRIEF ICON to register to get our latest Complimentary Brief
CLICK BRIEF ICON to register to get our latest Complimentary Brief

Impact: Surprisingly for a Japanese company with a major mobile franchise it is packaged goods and console games that excelled. That’s an intriguing result that seemingly goes against current trends. Capcom is an important bellwether because is a classic video game company with big presence in Japan and global markets. In addition, the firm placed a big bet on mobile in 2011 by creating a new subsidiary, Beeline Interactive, to push out smartphone games. Despite having a huge hit with its portable Monster Hunter franchise, titles such as Monster Hunter Explore, Monster Hunter Big Game Hunting Quest, and Monster Hunter Dynamic Hunting have not moved the needle on mobile sales. To get better returns on mobile, early last month Capcom established a Mobile Business Division to reorganize its mobile operations, as well as better integrate them with its overall game business. The new division is charged with producing hit titles for Japan and globally by more aggressively utilizing the company’s popular IP. Four smartphone games are planned between now and March of next year. Capcom said it would leverage the Monster Hunter, Sengoku BASARA, and Mega Man franchises for the titles. As part of the reorganization, Beeline is being renamed Capcom Mobile Co., Ltd. Despite higher expectations for mobile, we expect packaged goods and console platform games will continue to dominate Capcom’s financials for the short-term until the company finds the right formula for hit games on smartphones. An important first step toward that goal was the realization that separating Beeline out and away from its core game operations was a mistake. This was done in the belief that target markets in North America and Europe were too different from Capcom’s conventional Japanese video game business for success. In reality, it appears the opposite was true.

Similar Posts