Capcom Forecast Revisions for Year Ending March 31, 2010 and Plan for Fiscal Year Ending March 31, 2011

Capcom’s fiscal update for the year ending March 31, 2010, details a significant downward revision in financial performance alongside a strategic restructuring plan for the subsequent fiscal year. The company reduced its net sales forecast from 95 billion yen to 65 billion yen, representing a 31.6% decrease, while operating income was adjusted downward by 61.3% to 6 billion yen. These revisions were primarily driven by the strategic decision to postpone the launch of major home video game titles, intended to avoid market saturation in the fourth quarter and preserve long-term brand value.

The financial results were further impacted by approximately 4.5 billion yen in special losses associated with restructuring the underperforming pachinko and pachislo business and closing unprofitable arcade locations. Conversely, the company noted a positive impact from a 1.8 billion yen tax refund resulting from a mutual agreement with U.S. authorities regarding transfer pricing. To manage capital, Capcom also authorized a share repurchase program of up to 3 million shares, totaling 4.5 billion yen.

Looking toward the fiscal year ending March 31, 2011, the company projects a recovery, targeting net sales of 95 billion yen and operating income of 15 billion yen. This growth strategy relies on the release of previously postponed titles, such as Lost Planet 2 and Super Street Fighter IV, alongside new entries like Dead Rising 2. Management intends to distribute these launches across all four quarters to ensure stable revenue. Furthermore, the company plans to pivot resources toward its home video game and online gaming segments while streamlining arcade operations to improve overall profitability.