Capcom announced today the financial results for the six months ended on September 30th, 2017, and as you can see in the table below, all the figures are in the black, even if showing a decline year-on- year.
The company released a detailed statement via press release, which you can read below. Quite a bit of space is dedicated to the success of Resident Evil VII: Biohazard at past trade shows, indicated as evidence of the validity of the company’s strategy to release the fiscal years’ major titles in the second half.
The progress of the consolidated business results including related qualitative information During the six-months period ended September 30, 2016, signs of major changes to our industry became evident, such as with the successive releases of VR (virtual reality) consoles that are highly compatible with games, and with an eye to creating a new market we entered a new age many are calling “VR year one.”
Under such circumstances, the Capcom Group (the Company) promoted the expansion of its development departments, which have been the source of its competitiveness by commencing full-scale operations in April of its new development base, the R&D Building #2, with its state-of-the-art facilities comparable to major film studios in Hollywood including the motion capture room, among others.
Additionally, this fiscal year’s feature title, the fully VR-compatible Resident Evil 7 biohazard (for PlayStation 4, Xbox One and PC), not only drew the attention of many show-goers at E3, one of the world’s largest game trade shows held in the U.S. in June of this year and where VR was in the spotlight, but similarly was also massively successful at the Company’s booth at the Tokyo Game Show 2016, Japan’s largest game fair that was held in September and which attracted a record number of visitors; at both events the title received lavish praise, showing the Company’s business strategy of prioritizing the second half of the fiscal year through releasing this fiscal year’s major titles in the second half of the year to be sound.
Moreover, the Company also focused on developing new users and deepening its relationships with existing customers by such means as offering Street Fighter V, the latest game in the Street Fighter series, which has been the cornerstone of the Company’s growth, to be featured in domestic eSports league competitions.
Additionally, the Company proactively expanded its media mix as part of efforts to enhance the Capcom presence and increase Capcom’s brand value by generating synergy with its popular games, such as the airing of the animated TV program Monster Hunter Stories (Fuji Television Network) from October 2016, which followed the airing of animated TV program Phoenix Wright: Ace Attorney (Nippon TV group network).
Meanwhile, the Company’s business strategy prioritizes the second half of the fiscal year through measures such as releasing this fiscal year’s major titles in the second half of the year, therefore, during the period under review the business mainly focused on minor titles.
The Company, as part of its efforts to return its profits to shareholders, purchased 1.48 million shares of treasury stock in September 2016.
The resulting consolidated net sales for the six-months period ended September 30, 2016 were 28,676 million yen (down 9.4% from the same term last year). Regarding profitability, operating income was 1,715 million yen (down 39.7% from the same term last year). Furthermore, due to the rapidly rising yen, the Company recorded a foreign exchange loss, thus ordinary income amounted to 514 million yen (down 82.2% from the same term last year) and net income attributable to owners of the parent amounted to 405 million yen (down 79.2% from the same term last year).
For comparison, in addition to the second half releases of Resident Evil 7 biohazard (for PlayStation 4, Xbox One and PC) and Dead Rising 4 (for Xbox One and PC), a game targeting the overseas market, the Company will have releases such as the major pachislo machine Monster Hunter Kyoryu Sensen, and thus its consolidated earnings forecast for the fiscal year ending March, 2017 is as follows.
We also get further details on the digital content business, which focuses on games:
In the Digital Contents business, series title Phoenix Wright: Ace Attorney – Spirit of Justice (for the Nintendo 3DS family of systems) sold largely as planned, while re-releases of popular titles Resident Evil 5 (for PlayStation 4 and Xbox One) and Resident Evil 4 (for PlayStation 4 and Xbox One) also performed steadily thanks to a stable fanbase for the brand. In addition, Monster Hunter Generations (for the Nintendo 3DS family of systems) achieved solid sales overseas thanks to Capcom’s established brand capabilities, while elsewhere Sengoku BASARA Sanada Yukimura-den (for
PlayStation 4 and PlayStation 3) was released.
As the launch of the major titles will be concentrated in the second half of the year, the majority of titles released during the period under review were supplemental or catalog titles.
On the other hand, online games and mobile phone content were off to a promising start, amidst ongoing efforts by the Company to achieve progress surrounding this static sub-segment by reviewing its development framework and
operation methods. This led to Toraware no Paruma, an enterprising romance game for smartphones (for Android devices and iOS) developed mainly by female staff, to reach the top of the App Store paid application rankings on its release date.
The resulting net sales were 16,373 million yen (up 14.5% from the same term last year) and operating income was 1,099 million yen (down 28.3% from the same term last year)