Capcom Reports Fiscal '06 Results News
Chris Leyton
18/05/2007
Increase in net sales and operating income a result of cost cutting, Dead Rising and Lost Planet: Extreme Conditions...
An increase of 6.1% in net sales and a 45% jump in operating profit for the fiscal year ending March 31st 2007, couldn't stop Capcom from issuing a 15.7% decline in net income for the period.
Citing improvements to overseas operations and the success of Dead Rising and Lost Planet: Extreme Conditions in North America and Europe along with Monster Hunter Freedom 2nd in Japan, net sales for the Japanese publisher increased to 74.5 billion yen (£311.8 million). A resulting 45.9% leap saw Capcom reporting operating income of 9.6 billion yen, whilst net profit dropped to 5.8 billion yen as a result of the publisher's review into the valuation reserve for deferred tax assets and posted adjustments, to be recorded in related accounts including corporation taxes, in the previous year.
Spurred on by Dead rising, Lost Planet: Extreme Conditions, Monster Hunter Freedom 2nd, Devil Kings 2 and "healthy growth" for Okami, the Home Video Game division posted net sales of 43.8 billion yen representing an increase of 2.6% compared to the previous year and a 175.2% increase in operating income to 8.0 billion yen. The publisher cites highly profitable software and lowered development costs as the reasons to the improvements across the board.
A "scrap & build" strategy involving the establishment of new arcades in the Metropolitan area of Chiba Prefecture failed to revitalise the publisher's Arcade Operations for the year. Despite a 12.8% increase in net sales to 13.0 billion yen, the division saw a 17.6% reduction in operating income to 2.0 billion yen.
Split between territories, Capcom enjoyed a 4.5% increase in net sales throughout Japan representing 56.7 billion yen and a 15.1% increase in operating income to 10.1 billion yen. Buoyed by the million-plus sales of Mosnter Hunter Freedom 2nd across the territory, Capcom also saw strong demand for Megaman Star Force, Devil Kings 2 amongst female gamers, Okami and the distribution of Rockstar Games' GTA: San Andreas.
An operational restructuring campaign across North America to enhance marketing strategies saw Capcom record net sales of 15.8 billion yen and a 731.7% increase in operating income to 1.4 billion yen. Beyond the success of Dead Risign and Lost Planet: Extreme Conditions, Capcom also attributed the success to Monster Hunter Freedom, Resident Evil 4 Platinum and Devil May Cry 3: Special Edition.
After the closure of Capcom Eurosoft, the Japanese publisher saw a decrease of 11.7% in net sales for the region standing at 8.0 billion yen; however, the cost-cutting measures resulted in a dramatic 2436.6% increase in operating income to 1.0 billion yen.
For the year ahead, Capcom suggests that, "We may be seeing a clear distinction of "winners" and "losers" with a redrawn market share alignment of the industry." Beyond adopting PC development to assist in their multi-platform strategy, Capcom suggests that growth will come from developing products and sales strategies that match the hardware trends of the three major territories.