Capcom Cancels Games, Plans to Sell More DLC, Shifts Development Back to Japan

Do you think Capcom sells too many DLC? Well, too bad, because if the documentation following the Earning Forecast Revision released today is to be believed, we’re going to see more of them.

The Japanese publisher announced today that the previous net income forecast for the fiscal year ended on March 31 (6,500 million Yen, $66 million) has to be sliced down to 2,900 million Yen ($30 million). The main reason cited is an extraordinary loss (as usual, in financialese this means a loss happening just once, not an big loss, even if it’s big all right) of 7,287 Yen ($74 million) due to the restructuring of its game development organization to reflect changes in its game development strategy. Interestingly enough this is exactly the same reason that brought to a radical reduction in Square Enix’s forecast.

The company also blames market-related reasons like drastic changes in the industry’s market environment and concentration of AAA titles in the hands of few foreign competitors, but more importantly it identifies a delayed response to the shift to digital media in the home video games business and a decline in quality of titles outsourced to overseas developers.

So, what is Capcom going to do in order to address the situation? First of all they canceled a few games in the works (the terminology used is “strictly re-evaluated”) due to the restructuring of the business. We still have no solid information on the titles of the games affected.

Secondly, and this isn’t going to make many people happy, they’re going to sell more DLC. Yes. You heard it well: we can expect more costumes and similar nickel-and-dime tactics in the future.

Thirdly, they’re going to shift development back in house (IE: In Japan) in order to “increase quality”, due to the lack of performance of titles developed by foreign studios.

In addition to that, they’re also going to improve the coordination between the development and marketing divisions.

The only hints we have about the canceled games is that some shown “delays in responding to the digital contents and the resulting inability to address market needs” (which seems to indicate that they weren’t structured to sell enough DLC), while others were “titles outsourced overseas that are no more compatible with the current business strategy”.

I honestly have to scratch my forehead a bit (well, more than a bit) at the idea that shifting more towards DLC will increase the company’s income that much, considering that its public image isn’t exactly stellar on that front. The only hope is that they actually understand that the small, nickel-and-dime DLC aren’t exactly the way to go in order to make their customers happy, triggering a shift to bigger DLC expansions like they did with Dragon’s Dogma: Dark Arisen. I’m not holding my breath on this one, though.

On the other hand, if you were hoping for a DmC 2 you may want to keep that expectation in check. As a matter of fact I feel this may be a relatively good thing (while it’s never a happy moment when development studios lose work), as it’s about time for Japanese publishers to wake up from their infatuation for the west and restart working on their own local talent. Diversity is a value to be cherished in the gaming industry, and the rampant westernization was starting to jeopardize it.

How do you feel about this hot financial mess? Let us know in the comments below.

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Giuseppe Nelva

Hailing from sunny (not as much as people think) Italy and long standing gamer since the age of Mattel Intellivision and Sinclair ZX Spectrum. Definitely a multi-platform gamer, he still holds the old dear PC nearest to his heart, while not disregarding any console on the market. RPGs (of any nationality) and MMORPGs are his daily bread, but he enjoys almost every other genre, prominently racing simulators, action and sandbox games. He is also one of the few surviving fans of the flight simulator genre on Earth.

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