Capcom Consolidated Financial Results for the 6 Months Ended September 30, 2010

Key insights

6 takeaways

01
Capcom experienced a profit decline in the six months ending September 30, 2010, with operating income falling 29.3% to 3,942 million yen and net income dropping 39.9% to 1,784 million yen.See it on page 1
02
Despite falling profits, consolidated net sales increased 4.7% year-over-year to 40,706 million yen, driven by a shift toward international markets.See it on page 13
03
Overseas revenue grew significantly, rising to 42.9% of total consolidated net sales compared to 30.2% in the previous year.See it on page 14
04
The consumer online games segment, which generated 30,773 million yen, was negatively impacted by the underperformance of Lost Planet 2 and the delayed release of Dead Rising 2.See it on page 5
05
Arcade operations saw a decline in net sales to 5,916 million yen, though profitability improved due to cost-control measures and the closure of unprofitable locations.See it on page 5
06
The company is transitioning toward a strategy of quarterly flagship releases and diversified digital revenue streams to reduce reliance on the volatile home console market.See it on page 4

Summary

Capcom’s consolidated financial results for the six-month period ending September 30, 2010, reflect a challenging operating environment characterized by a stagnant video game market, the appreciation of the yen, and the underperformance of key software titles. Despite these headwinds, the company achieved net sales of 40,706 million yen, representing a 4.7% increase over the same period in the previous fiscal year. However, profitability declined significantly, with operating income falling 29.3% to 3,942 million yen and net income dropping 39.9% to 1,784 million yen.

The company’s performance was heavily influenced by the consumer online games segment, which generated 30,773 million yen in sales. While titles such as Monster Hunter Frontier Online and the spin-off title Monhan Nikki Pokapoka Airu Mura performed well, overall segment results were hampered by the delayed release of Dead Rising 2 and the substantial underperformance of Lost Planet 2. Additionally, the arcade operations segment saw a decrease in net sales to 5,916 million yen, though profitability improved due to successful cost-control measures and the closure of unprofitable locations.

Geographically, the company saw a notable shift in revenue distribution, with overseas sales increasing to 42.9% of total consolidated net sales, up from 30.2% in the prior year. This growth was supported by a strategic focus on international markets and the expansion of mobile and social gaming initiatives. The financial position remained stable, with total assets reaching 90,408 million yen. The company continues to navigate a transition toward quarterly flagship releases and diversified digital revenue streams to mitigate the volatility inherent in the traditional home console market.