The continuingly improving Japanese economy and the success of Frank West were responsible for a rise in net sales and net income in Capcom's mid-term financial reports for the six-month period dating April 1st 2006 - September 30th 2006.

Net sales for the period stood at 29.18 billion yen (£129.80 million), representing an increase of 4.9% compared to the same period last year and inline with last months amended forecast. A significant reduction in the Cost of Goods Sold Over Sales (COGS), resulted in the Japanese publisher enjoying a 356.4% increase in operating income compared to last year, rising to 3.04 billion yen (£13.53 million) as opposed to just 666 million yen (£2.96 million) during 2005. As a result, ordinary income also saw a dramatic increase, increasing from 907 million yen (£4.03 million) last year to 3.79 billion yen (£16.86 million) during the six-month period.

The figures could not reverse a decrease in net profit, however, dropping by 38.6% in the period, down to 1.92 billion yen (£8.54 million) as opposed to 3.12 billion yen (£13.88 million) in the previous year. Capcom attributed the decline to the tax-rate changing back to its standard rate, after reviewing the valuation reserve for the deferred tax assets last year, which increased net profits.

Results for the three major territories stood at: 21.73 billion yen (£96.66 million) in net sales (-1.1%) and an operating income of 2.9 billion yen (£12.90 million) (+19.3%) in Japan; 6.78 billion yen in net sales (£30.16 million) (+43.7%) and 955 million yen (£4.25 million) in operating income for North America; whilst Europe recorded net sales of 3.09 billion yen (£13.74 million) (-2.8%) and operating income of 455 million yen (£2.02 million)).

For the current fiscal year, Capcom expects net sales to stand at 68.4 billion yen (£304.26 million), ordinary income of 7 billion yen (£31.14 million) and a net profit of 3.9 billion yen (£17.35 million).

Intriguingly the report suggests that the demise of Capcom's US operation, Studio 8, is not as definite as we first believed, claiming that the division has currently suspended its operations to reform its R&D structure for the North American market - perhaps there's some hope for Maximo 3 yet!

Looking ahead Capcom also made the suggestion about the possibility of the videogames industry undergoing a "major reformation as new competitors from other industries enter into both the hardware and software markets" - move over Sony, Nintendo and Microsoft, it seems there could be a new contender for the throne.