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Capcom Boasts Profit Growth as Resident Evil 2, Devil May Cry 5, & Monster Hunter: World Keep Selling Well


Capcom Boasts Profit Growth as Resident Evil 2, Devil May Cry 5, & Monster Hunter: World Keep Selling Well

Today Capcom revealed its financial results for the first quarter of the fiscal year 2019, related to the period between April 1 and June 30, 2019.

Below you can see a table summarizing the results for the quarter, and they’re very positive.

In particular, income figures show large improvements across the board year-on-year, even if they didn’t match the massive growth showcased last year.

First of all, we get a general overview of the business, with the mentioning that Capcom has focused on improving its development infrastructure and focused on developing video games for home platforms for costumers both in Japan and overseas. They also continued their multi-platform strategy.

Major catalog titles (released in previous quarters) and digital download sales were identified as the factors behind the profit growth.

“During the three months ended June 30, 2019, with the tangible roll-out of the 5G era on the horizon, the industry saw a wave of structural changes coming in anticipation of new business opportunities. For example, IT giant Google unveiled its plan to enter the cloud gaming business (a market in which dedicated gaming consoles are unnecessary), while Microsoft also announced similar services.

In such an environment, the Company focused on improving our development structure, which is the source of our competitiveness, by concentrating management resources on the development of home video games in order to meet diverse customer needs both in Japan and abroad. At the same time, the Company endeavored to expand sales by focusing on marketing and promotion activities that are consistent with market trends, in addition to promoting its multi-platform strategy to provide games for a range of different hardware.

The Company also advanced the selection and concentration of management resources through restructuring unprofitable businesses, such as scaling down the Arcade Games Sales sub-segment, as well as allocating funds and human resources to the eSports business, which has future growth potential. In such a situation, profit improved due to the continued popularity of major catalog titles overseas and the growth of highly profitable digital download sales.”

We also get a specific explanation for the Digital Contents business, which includes games. We hear that sales continued to grow for Resident Evil 2, Devil May Cry 5, and Monster Hunter: World.

“In this business, as the first quarter corresponded with a transition period between major titles in the overall release cycle, new game launches were limited to a select number of rerelease titles. However, driven by an expanded user base, sales continued to grow for Resident Evil 2 (for PlayStation 4, Xbox One and PC) and Devil May Cry 5 (for Xbox One, PlayStation 4, and PC), both of which are hit titles from the previous quarter. Flagship title Monster Hunter: World (for PlayStation 4, Xbox One and PC) has also continued to sell well over an extended period, supported by enduring popularity. These catalog titles boosted profit significantly by driving high-margin digital download sales.

The resulting net sales were 13,977 million yen (up 1.4% from the same term in the previous fiscal year) and operating income was 7,733 million yen (up 34.8% from the same term in the previous fiscal year) primarily due to contributions from catalog titles.”

If you want to compare, you can check out Capcom’s results for the previous quarter, disclosed in May.

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