Devil May Cry 5, Resident Evil 2, Monster Hunter Bolster Capcom’s Record-High Profits

Capcom released its consolidated results for the fiscal year ended March 2019 that shows a second year of record-high profits thanks to the success of Devil May Cry 5, Resident Evil 2, Monster Hunter, and more.

Now that the Q4 2019 results are in, we know that Capcom is riding on a six-year streak of OP growth, with net sales up 5.8%, and operating income up 13.1%. Resident Evil 2 and Devil May Cry 5 saw strong performances, particularly outside of Japan. As for Monster Hunter: World, we saw it hit the 12 million milestone just a couple months ago to break the record for the most sales of any single title in Capcom history.

However, Capcom’s Amusement Equipments business (pachinko & pachislot) did see a decline, something the company currently sees as a challenging situation, but the momentum from their strong software sales was more than enough to offset the difference to deliver another year of profit growth for the company for the sixth consective year of income growth and second consecutive year where all profitability figures from operating income down set record highs.

Moving forward, Capcom will strengthen digital download and catalog sales with the aim of continuing to grow the Digital Contents business. As mentioned last week, The company is also redoubling their commitment and prioritizing eSports, which continues to grow around the world and recently picking up steam in the Japanese market.

For the fiscal year ending March 31, 2020, Capcom expects net sales of 85,000 million yen and operating income of 20,000 yen for a seventh consecutive year of operating income growth and third consecutive year of record high profit.

Here are some more numbers on Capcom’s performance in the fiscal year ended March 31, 2019:

1. Consolidated Financial Results of the Year Ended March 31, 2019

2. Forecast for the Fiscal Year Ending March 31, 2020

3. Status of business by operating segment

1. 1. a. In this business, the popularity of major title Resident Evil 2 (for PlayStation 4, Xbox One and PC) exceeded expectations, driving the Company’s business performance. Devil May Cry 5 (for PlayStation 4, Xbox One and PC) targeted overseas markets and also performed strongly, backed by consistent demand. Additionally, the Monster Hunter series contributed significantly to improving profits: flagship title Monster Hunter: World (for PlayStation 4 and Xbox One), which was a phenomenal success in the previous fiscal year, maintained popularity through the expansion of its user base, while the Steam version for PC also performed solidly, boosting profits; meanwhile, Monster Hunter Generations Ultimate (for Nintendo Switch) enjoyed robust sales through its release in markets outside of Japan.
   2. b. Furthermore, Mega Man 11 (for PlayStation 4, Nintendo Switch, Xbox One and PC) and Street Fighter 30th Anniversary Collection (for PlayStation 4, Nintendo Switch, Xbox One and PC) performed well. In addition, high-margin catalog titles, including Resident Evil 7 biohazard (for PlayStation 4, Xbox One and PC), increased sales through their enduring popularity.
   3. c. The resulting net sales were 82,982 million yen (up 11.9% from the previous fiscal year) and operating income was 23,315 million yen (up 22.0% from the previous fiscal year).

1. 1. a. In this business, amid intensifying interregional competition, the Company made efforts to secure a wide range of customers including repeat customers, the middle-aged and seniors, women and families with children, as well as inbound tourists. These efforts included installing game machines that meet diverse customer needs, conducting service day campaigns and holding various events. In addition, as a new undertaking, in November 2018, the Company launched Capcom Net Catcher Cap Tore, an online crane game that can be played by remote control from smartphones and PCs.
   2. b. During the period under review, the Company opened two stores and closed one, bringing the total number of stores to 37.
   3. c. The resulting net sales were 11,050 million yen (up 8.0% from the previous fiscal year) and operating income was 1,096 million yen (up 24.6% from the previous fiscal year).

1. 1. a. Pachinko & Pachislo, the Company launched Street Fighter V, Biohazard into the Panic, and other products in a softening market environment. However, sales struggled due to a downturn in consumer confidence and dampening investment by the Pachinko/Pachislo hall operators.
   2. b. Arcade Games Sales also struggled and business was generally weak, due to a lack of new products, necessitating a change in strategic direction going forward for the Company.
   3. c. The resulting net sales were 3,422 million yen (down 56.1% from the previous fiscal year) and an operating loss of 2,668 million yen (compared to an operating loss of 764 million yen in the previous fiscal year).

The net sales from Other Businesses, mainly consisting of royalty income from the licensing and sale of character merchandise, were 2,575 million yen (up 10.2 % from the previous fiscal year) and operating income was 811 million yen (down 28.0 % from the previous fiscal year).