Although Capcom was on course to record notably improved profits for the last fiscal year, the company today revealed that it has been forced to book a special loss following restructuring efforts.
The company had previously forecast revenues of 93.5 billion yen ($950.0 million) and profits of 6.5 billion yen ($66.0 million) for the fiscal year ended March 31, 2013.
However, "the sudden and significant changes in the operating environment of the Digital Contents business" have forced the company to review its business strategy, and in turn record a special loss of 7.3 billion yen ($74.0 million) on a non-consolidated basis.
Part of this restructuring included re-evaluating the games it currently has in development. The company says that it plans to change its strategy when it comes to retail video games, including a larger focus on DLC, and bringing more of its development in-house, rather than outsourcing.
The company says in particular that there has been a "decline in quality of titles outsourced to overseas developers." It did not state specifically which games it was referring to.
As a result, Capcom has revised its forecast and now estimates reduced profits of 2.9 billion yen ($29.6 million) for the year, down 55.4 percent compared to its previous forecast.
However, the company notes that stronger than expected sales in its Resident Evil 5 Pachinko business, along with favorable foreign exchange gains, mean that the reduction in profits isn't as bad as it could have been. Indeed, the revised revenue actually increased by 500 million yen ($5.1 million).
As for Capcom's flagship video game retail titles, the company has further reduced its sales forecast for multiple titles.
Although the company originally forecast 7 million sales of Resident Evil 6 for the last fiscal year, this was later reduced to 5 million. The company now expects the game to sell 4.9 million in the last fiscal year.
Elsewhere, Monster Hunter 4 is expected to sell 2 million on Nintendo 3DS, while Devil May Cry has been reduced down to 1.15 million sales, nearly half of the original 2 million forecast.
They really need to focus on titles that hold more potential of maintaining a following, as well as keeping money flowing in. Look at Dragon's Dogma. If the DLC for that were better handled or had more substance to them (those medal quests were weak, let's admit it), then perhaps Capcom could find more ways to help keep that going onto the next generation. IMHO, "Deep Down" is Dragon's Dogma 2.
They started this gen with a bang (Lost Planet), and i hope they use the next gen to release a spiritual successor to Lost Planet, or a new I.P entirely that is just as good, or if they are going to bring out Dragons Dogma, at least make your mind up whether you want to be like Dark Souls or not, so that if you do go the Souls route you can actually riff on the franchise in a good way instead of just being its wimpy little sister.
Also the original Dead Rising. I thought that was quite interesting. However, like everything this generation (or so it seems) the second one improved everything technically while stripping away some of the most interesting stuff, so that the overall experience was more generic. I feel like Capcom did this with all of their new IPs and several of their older IPs (Resident Evil and DMC especially). Combined with the fact that they've basically obliterated Mega Man, I would say only Monster Hunter and their fighting games are in good shape right now.
The only game I liked from Capcom this gen was Lost Planet, in fact I rarely play Capcom games (I suck at fighting games, and Megaman inability to crouch annoys me to no end, so I rarely play it, and I dislike horror games, the only one I play sometimes is System Shock 2 because the gameplay is really cool, but even that game I never finished because I cannot stand the fact it is a horror game), when I went for Lost Planet I was really impressed, and thought: "Whoaaa, cool Japanesey shooter! I want more!" Except it never came, Capcom tried to do some non-japanesey stuff (thus defeating the point) and made some really terrible sequels (specially Lost Planet 2, and its terribly bad drunk suicidal stupid AI that spends your lives and never complete the mission objectives).
It actually sounds like they're moving in the right direction now! My biggest problem with Capcom was how they were farming out series like DMC to bad developers. Their in-house stuff like Dragon's Dogma is great! Now if they can just stop trying to imitate western developers, and embrace the unique flair of their earlier games (which always had impressive art design,) I think they can become one of the best developers again!
"Now if they can just stop trying to imitate western developers"
You know, that is kind of funny... really, when you consider the source of that focus.
I would have to agree with you however, this obsession to develop the "Western game," simply fails to take into account the strengths of the company and has begun to harm them.
It's rather hard not to see why they need restructuring, but I think they're focusing on the wrong things.
RE 6 was awful, and did a lot especially to alienate the fans that supported it since the original entries on the PlayStation (and Saturn); the PC versions were especially guilty of such awful mismanagement, especially the last couple of entries that practically required a controller to be playable at all... and completely ignoring what they could have done with a PC/Mac platform at all just to meet some arbitrary ship date.
Capcom's support for the PC has been... well, pretty contemptual, at best. The fact that they didn't market the PC releases of RE, Street Fighter or ANY of their recent releases for the platform (I honestly didn't know anything after SF 4 even EXISTED until I stumbled across it on Steam), does speak negatively. And Many of us PC gaming vets would appreciate more flexibility - the kind of flexibility the platform affords. Volition gave us that in spades in Saint's Row the Third, so a much larger company like capcom could easily afford to; heck, considering how Capcom has kept fully customizable controls a staple of Street Fighter since its success with the original SF2, there's no excuse why we couldn't get the same for RE on PC/Mac.
Mega Man fans have (justified) aggravation with the company after cancelling Mega Man Legends 3 for 3DS, and the insultingly awful rendition of the Blue Bomber in SF x Tekken. Old-School fans were admittedly very thankful with the release of SF x Mega Man (for free!) but it's going to take some TLC on Capcom's part to get in the good graces of MM fans after their very high-profile failures. If they're going to mismanage it this badly, at least give Inafune an offer to reclaim the rights to the character he created, so that he could put out something good for it again.
My message to Capcom? Some franchises (RE) need to get back to their roots. Others (Mega Man) might need some serious evaluation, and it might be time to make some hard decisions, if it means creating either the best thing possible, or creating the opportunity for things to improve.
To be completely honest, while SFxMM was a nice gesture, the game itself was not that good.
The biggest problem Capcom has, is exactly what Inafune said when he left. It's too japanese.
That might sound like a terrible thing to say, but hear me out.
Japanese business culture is very introverted and xenophobic. Capcom is far from the only japanese company with this problem. I'm not saying that they should outsorce 'more' just that it's not the outsourcing that's the problem, the main company is.
Would be very difficult for Inafoune to reclaim something he never had. Inafune didn't create Mega Man (contrary to popular belief), he was responsible for the final design.
Sure, he ran the Mega Man ship for the majority of its time and made it into what it is, but 'create' him he did not.
Though I would love to see Inti Creates get the rights to the franchise. They've done the franchise good for the most part (ZX Advent was meh, but ok).
Well, RE: Operation Raccoon City was outsourced, and was indeed awful...
But Resident Evil 6 was pure crap, and it was fully driven by Capcom Japan. To be fair, about 150 internal developers and 450 external, but there was no question who was in charge.
And the DMC reboot was great (if you can get over new Dante).
I guess you have to have someone to blame, but using other dev studios is not your real problem.
I thought that RE6, while very flawed, was still better than DmC which was a pretty worthless game. I can't imagine that it would have been any worse if it was done in house.
You know, that is kind of funny... really, when you consider the source of that focus.
I would have to agree with you however, this obsession to develop the "Western game," simply fails to take into account the strengths of the company and has begun to harm them.
RE 6 was awful, and did a lot especially to alienate the fans that supported it since the original entries on the PlayStation (and Saturn); the PC versions were especially guilty of such awful mismanagement, especially the last couple of entries that practically required a controller to be playable at all... and completely ignoring what they could have done with a PC/Mac platform at all just to meet some arbitrary ship date.
Capcom's support for the PC has been... well, pretty contemptual, at best. The fact that they didn't market the PC releases of RE, Street Fighter or ANY of their recent releases for the platform (I honestly didn't know anything after SF 4 even EXISTED until I stumbled across it on Steam), does speak negatively. And Many of us PC gaming vets would appreciate more flexibility - the kind of flexibility the platform affords. Volition gave us that in spades in Saint's Row the Third, so a much larger company like capcom could easily afford to; heck, considering how Capcom has kept fully customizable controls a staple of Street Fighter since its success with the original SF2, there's no excuse why we couldn't get the same for RE on PC/Mac.
Mega Man fans have (justified) aggravation with the company after cancelling Mega Man Legends 3 for 3DS, and the insultingly awful rendition of the Blue Bomber in SF x Tekken. Old-School fans were admittedly very thankful with the release of SF x Mega Man (for free!) but it's going to take some TLC on Capcom's part to get in the good graces of MM fans after their very high-profile failures. If they're going to mismanage it this badly, at least give Inafune an offer to reclaim the rights to the character he created, so that he could put out something good for it again.
My message to Capcom? Some franchises (RE) need to get back to their roots. Others (Mega Man) might need some serious evaluation, and it might be time to make some hard decisions, if it means creating either the best thing possible, or creating the opportunity for things to improve.
The biggest problem Capcom has, is exactly what Inafune said when he left. It's too japanese.
That might sound like a terrible thing to say, but hear me out.
Japanese business culture is very introverted and xenophobic. Capcom is far from the only japanese company with this problem. I'm not saying that they should outsorce 'more' just that it's not the outsourcing that's the problem, the main company is.
Would be very difficult for Inafoune to reclaim something he never had. Inafune didn't create Mega Man (contrary to popular belief), he was responsible for the final design.
Sure, he ran the Mega Man ship for the majority of its time and made it into what it is, but 'create' him he did not.
Though I would love to see Inti Creates get the rights to the franchise. They've done the franchise good for the most part (ZX Advent was meh, but ok).
But Resident Evil 6 was pure crap, and it was fully driven by Capcom Japan. To be fair, about 150 internal developers and 450 external, but there was no question who was in charge.
And the DMC reboot was great (if you can get over new Dante).
I guess you have to have someone to blame, but using other dev studios is not your real problem.