Capcom released today its financial results for fiscal year 2015, and the income numbers are in the black,with a visible improvement since the previous year.
The company also provided a press release with an explanation of the year’s performance for its overall business.
“During the fiscal year ended March 31, 2016, the employment and income environments as well as capital investments remained satisfactory. But the Japanese economy basically found itself in a holding pattern, as a result of volatility in the stock market and the rise in the Japanese yen from the beginning of the year, in addition to the stagnation of consumer spending and the decelerating Chinese economy, while an air of increasing uncertainty over the future began to prevail.
In the game industry, in addition to the continued expansion of the mobile game population centering on smartphones, the overall game population also expanded thanks to efforts to further cultivate the existing market by catering to diverse customer tastes and by attracting women, families and senior players through new customer development.
In such an environment, the Company focused on improving the development process and revenue management in order to reduce development costs and shorten the development period. This was achieved by increasing the ratio of internally produced titles through a reduction in the volume of outsourced operations. Additionally, in an effort to develop diverse revenue sources, the Company pushed forward its Single Content Multiple Usage strategy by leveraging its premier contents such as “Monster Hunter” and “Street Fighter”.
Furthermore, the Company has been focusing on expanding its profitable digital download sales in order to mitigate inventory risk and reduce distribution costs. Among the major titles launched this fiscal year, the overwhelming sales of the featured title, “Monster Hunter X (Cross)” (for the Nintendo 3DS system), contributed to the total unit sales and helped to improve business performance overall.
Meanwhile, in the continuously growing Chinese market, distribution of the PC online game “Monster Hunter Online” by Tencent Holdings Limited in cooperation with the Company, which began in December 2015, was off to a good start, thus increasing the possibility of even greater business development in China going forward.
On the other hand, the amusement market failed to show signs of improvement, and the results remained soft.”
The Digital contents business saw “steady” sales for Street Fighter V, favorable performance for Dragon’s Dogma Online and a Monster Hunter X seen as a major hit with over three million units sold (3.3 to be precise).
“In the Digital Contents business, the latest title in the featured series, “Monster Hunter X (Cross)” (for the Nintendo 3DS system), was a major hit, with sales of more than 3 million units, surpassing the initially-planned 2.5 million units, which contributed significantly to both sales and profits. Additionally, “Resident Evil 0 (HD Remastered)” (for PlayStation 4, PlayStation 3, Xbox One, Xbox 360, and PC) steadily increased unit sales, while “Street Fighter V” (for PlayStation 4 and PC) remained a perennial favorite and maintained steady sales mainly overseas. Moreover, sales of catalog titles grew, while digital downloads also became a stable source of revenue from a solid performance thanks to the synergistic effects from package sales.
Meanwhile with regard to online games, “Dragon’s Dogma Online” (for PlayStation 4, PlayStation 3 and PC), an online open-world action game where players can freely experience a host of adventures, performed favorably. At the same time, mobile contents sales improved as downloads of “Monster Hunter Explore” (for Android and iOS) surpassed 3 million, indicating signs of a breakthrough in the current situation of the mobile contents segment.”
Last, but not least, we get the outlook for the current fiscal year:
“As for the future outlook, with the growth of mobile games, which face relatively low barriers to entry, the industry will continue to expand its market size, while the competitive environment is expected to intensify even further, as a fierce battle for survival will unfold for market leadership.
Amid structural changes to the industry, the Company will concentrate its management resources on the core division of home video game software development, while unifying its US-Japan development structure and improving its product line-up based on a medium-term development map, in order to inject new life into the underperforming Mobile Contents business.
Additionally, the Company will strive to increase the number of customers through enhanced customer satisfaction by offering contents that will appeal to a broad range of users, in addition to accumulating optimal operating and management knowhow required after the games have been distributed.
Furthermore, in an effort to diversify its revenue sources in conjunction with the diversification of its sales format and to mitigate inventory burden and reduce distribution costs, the Company will promote its profitable digital download sales, in addition to package products that have limited sales runs.
Moreover, as business expansion in the vast overseas markets will be indispensable to ensure sustainable growth, the Company will be targeting its offensive on the Asian market where online games are growing in popularity. To this end, it has launched a new division to oversee this region. Moreover, the Company will take advantage of the foothold provided by the strong showing in China. With the success of “Monster Hunter Online”, which was jointly distributed by Tencent Holdings Limited in cooperation with the Company, the Company shall further focus penetrating the Company brand in the Chinese market where there is still ample room for growth. Through such full-scale expansion The Company seeks further business opportunities.
Meanwhile, in consideration of the Act of Promotion of Women’s Participation and Advancement in the Workplace, which went into effect from April 2016, the Company has been making further efforts to support the advancement of women in the workplace by ensuring a friendly environment for female workers through such means as providing internal nursery care services, while at the same time improving the internal environment in order to increase the percentage of women in the Company’s manager positions to 15% by 2021.
In the fiscal year ending March 31, 2017, the Company is scheduled to release the strategic titles of “Sengoku BASARA Sanada Yukimura-den” (for PlayStation 4 and PlayStation 3), which showcases the life of Sanada Yukimura, and “Resident Evil Umbrella Corps” (for PlayStation 4 and PC) of the “Resident Evil” series, which marked its 20th anniversary in March 2016, as warm up to the full-scale offensive planned for the second half of the year. Additionally, the Company is also scheduled to launch “Ace Attorney 6” (for the Nintendo 3DS system) and “Monster Hunter Stories” (for the Nintendo 3DS system).”
Interestingly, Capcom plans to concentrate its management resources on home video games (consoles and PC) while unifying its development structure between North America and Japan. They will also promote digital download sales and time-limited sales.
They’re also looking at Asia fior further expansion, and have a “full-scale offensive” planned for the second half of the year.