Capcom Additional Information for Results of Operations: Fiscal Year Ended March 31, 2010

Key insights

7 takeaways

01
Capcom experienced a significant financial downturn for the fiscal year ending March 31, 2010, with net sales falling to 66,837 million yen and operating income dropping to 5,587 million yen.See it on page 8
02
The Home Video Games segment suffered a 72.7% revenue decline, primarily caused by the postponement of major titles including Lost Planet 2, Super Street Fighter IV, and the overseas release of Monster Hunter Tri.See it on page 7
03
North American and European markets saw substantial sales declines, with North America specifically recording an operating loss due to a weak product lineup.See it on page 13
04
The Japanese market demonstrated relative resilience compared to Western regions, supported by consistent repeat sales of established titles and the performance of small-to-midsize games.See it on page 12
05
While the Contents Expansion segment improved profitability through the Pachinko and Pachislo business, these gains were insufficient to offset the losses in the home console division.See it on page 11
06
Despite the earnings decline, Capcom increased its work-in-progress for game software, signaling a continued investment in future development.See it on page 8
07
The company utilized 5,000 million yen for the purchase of treasury stock, while operating activities generated 14,320 million yen in cash flow.See it on page 20

Summary

The fiscal year ending March 31, 2010, was a period of significant financial contraction for Capcom, characterized by a sharp decline in both net sales and operating income. Net sales fell to 66,837 million yen, a decrease of 25,041 million yen from the previous year, while operating income dropped to 5,587 million yen. This downturn was primarily driven by the postponement of several major titles within the core Home Video Games segment, including Lost Planet 2, Super Street Fighter IV, and the overseas release of Monster Hunter Tri. These delays resulted in a 72.7% decline in Home Video Games revenue.

Geographically, the impact was most pronounced in North America and Europe, where the lack of a robust product lineup led to substantial sales declines and, in the case of North America, an operating loss. Conversely, the Japanese market remained more resilient, supported by consistent repeat sales of established titles and the performance of small-to-midsize games. While the Contents Expansion segment saw improved profitability due to an upturn in the Pachinko and Pachislo business, it was insufficient to offset the broader losses in the home console division.

The company’s balance sheet reflected these operational challenges, with total assets decreasing to 86,621 million yen. Despite the earnings decline, the company maintained a focus on future development, evidenced by an increase in work-in-progress for game software, signaling investment in upcoming titles. Cash flow management remained a priority, with operating activities generating 14,320 million yen, largely through the collection of trade receivables. Financing activities were marked by the purchase of treasury stock, totaling over 5,000 million yen, reflecting a strategic allocation of capital during the fiscal year.