Capcom Reduces Profit Expectation by Half, Blames Mobile

on March 31, 2014 10:32 AM

Capcom announced today that they will be reducing their announced profit expectation from ¥6.8 billion ($65 million) to ¥3.3 billion ($32 million) for the fiscal year, which ends today.

The “special loss” results from their most recent venture into the mobile gaming market.

Sales are expected to be higher than one year earlier due in part to the launch of major titles. However, Capcom anticipates declines in operating income, ordinary income and net income because of increases in the cost of sales and selling, general and administrative expenses.

Beyond this the blame is firmly laid at the feet of Monster Hunter Frontier G, which performed “below expectations.”

While certainly not a positive for the companies portfolio the announcement isn’t indicative of any long-term losses facing the company. A special loss is not an ongoing issue and Capcom is quick to paint this as the result of an adjustment period as they expand into new markets.

Due to rapid changes taking place in the market for games, Capcom is building a sound base for earnings by reorganizing the product development framework and improving development processes. These are two core elements of the company’s operations. The objective of these activities is to earn consistent earnings in each fiscal year. However, these initiatives have not yet started to produce benefits mainly in the Mobile Contents.

 

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