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Capcom Paints Rosy 2010 Picture

December 28, 2009 Written by Kyle P.

In preparation for the new calendar year, Capcom published the text from their latest investor Q&A meeting, conveniently found on their website. The main focus of the Q&A was for Capcom to elaborate and highlight key points of their overall 2010 company strategy. They also give their predictions on the state of digital distribution and its role in the company’s overarching strategy.

The questions and answers that really peaked our interest were:

Q. Why do you forecast sales growth of 30 billion yen in the fiscal year ending March 31, 2011?

 A. The main reason is our outlook for a sales recovery in the home video games business. However, due to the delay in the launch of titles originally scheduled for this fiscal year, we may not introduce all of the titles that are planned for the next fiscal year. Consequently, we will have to reexamine the title lineup in the next fiscal year and afterward from the standpoint of achieving sustained growth. In addition, we believe that the online game business will be another major source of growth in sales and earnings. Our goal is to narrow the divide between PC online games and the use of networks for home video games and to strengthen these operations.

Q. What is your outlook for the current generation of game consoles and other hardware?

A. We believe that further declines in prices of consoles will cause a slow decline in prices of software as well. But we expect to see a rebound in software prices when the next generation of consoles goes on sale.

Q. How do you plan to improve activities involving alliances with overseas development companies?

A. Our experience with Bionic Commando has demonstrated the difficulty of outsourcing the
development of new title to overseas companies. Nevertheless, we cannot develop a sufficient number of titles without using the resources of these companies. This is why we plan to continue using these alliances. We are considering ways to separate the roles of activities in Japan and overseas. We plan to develop new titles primarily in Japan. Overseas companies may be used mostly to develop titles for existing game series with well-established characters and universal themes. Overseas companies will also handle certain parts and/or lineups of such games.

Key points are that online game distribution will become a major source of revenue, and that they believe an industry-wide reduction in software will take place. Furthermore, for fans of classic, core Japanese titles, they are planning “to develop new titles primarily in Japan”. This is interesting as we really haven’t heard of many core-Japanese titles being developed by any of the major Japanese developing powerhouses as of late.

Time will tell whether any of these will come into fruition. You can read the full Q&A right here.