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Capcom Posts Boosted Profits, Forecasts 2011 Industry Rebound

Capcom Posts Boosted Profits, Forecasts 2011 Industry Rebound

February 1, 2010 | By Leigh Alexander

February 1, 2010 | By Leigh Alexander
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More: Console/PC

Capcom's Monster Hunter and Ace Attorney franchises improved the company's balance sheet over the nine months ending December 31 -- net profits were up 866 percent year over year.

However, even after the impressive-sounding percentage gain, Capcom posted ¥1.73 billion ($19.13 million) in net profits for the period, alongside net sales of ¥49.98 billion ($553.7 million). The year-over-year sales increase was much less drastic at 5 percent.

Capcom says its Mega Man DS title, a recently-discounted Monster Hunter Freedom Unite, Monster Hunter Tri for Wii and Ace Attorney investigations: Miles Edgeworth all performed well, but it described sales of Wii titles Okami and Resident Evil: Darkside Chronicles as "slow."

As has been the case often in recent years, the arcade side of Capcom's business struggled, and a partnership with Namco Bandai to try to launch new machines "struggled."

Despite the strong performance, analysts still had questions for the publisher on the downward revisions it's made to its fiscal year forecast -- it has said it expects 31.6 percent less net sales and 76.5 percent less profit than it previously predicted, largely due to title delays and the restructuring of its pachinko and pachislo business.

In a question-and-answer session alongside today's results, Capcom also told analysts it was planning for "potential shortfalls" in sales of Dark Void. Still, it also said it was continuing to hire "chiefly younger people" to develop core-focused games, and that its workforce is growing.

And the publisher is expecting sales growth in 2011: "The main reason is our outlook for a sales recovery in the home video games business," says Capcom. "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," the company adds.

"In addition, we believe that the online game business will be another major source of growth in sales and earnings," Capcom continues. "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."

[UPDATE: Capcom has also released a set of game sales figures and upcoming game sales projections. The Monster Hunter franchise was a strong performer, with Monster Hunter Freedom Unite selling 1.15 millions worldwide, and Monster Hunter Tri selling the same number in Japan alone.

Unite's figures may be higher in reality, as the game was released in Japan slightly before this nine-month financial period began. Tri is set to ship to North American and European retail this April.

Capcom said GRIN's Bionic Commando sold 700,000 units worldwide, performing best in Europe, from May through the end of 2009. The performance of that game led Capcom to claim it would use Western development carefully, only employing overseas studios on proven franchises.

The company expects Airtight Games' just-launched Dark Void to sell even fewer, with a sales projection of 600,000.

Capcom included sales figures for Resident Evil 5, claiming the game sold 850,000 units from April through December. Separately, the publisher has said the game sole 5 million units in total, meaning the overwhelming majority of sales came in the few weeks following its early March release.

The game will be re-released in March as Resident Evil 5 Gold Edition, and Capcom projects that package will sell 350,000 units.

Finally, Capcom said it would be closing three arcades and opening no new arcade facilities in 2010. Arcade revenues were down 16 percent in the nine months from April through December 2009, but Capcom says cost-cutting measures have led to increasing profitability in those arcades that remain.]

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