Capcom Financial Highlights: First Half of Fiscal Year Ending March 31, 2011

Key insights

6 takeaways

01
Capcom reported net sales of 40,706 million yen for the first half of the fiscal year ending March 31, 2011, an increase of 1,814 million yen year-over-year driven by Consumer Online Games.See it on page 5
02
Profitability contracted as operating income fell to 3,942 million yen and net income dropped to 1,784 million yen due to rising development costs and a strengthening yen.See it on page 5
03
Currency fluctuations significantly impacted earnings, with every one-yen appreciation against the U.S. dollar and Euro reducing operating income by 150 million yen and 50 million yen, respectively.See it on page 17
04
International markets drove growth, with North American and European operations expanding following the successful launch of titles like Dead Rising 2.See it on page 9
05
The Japanese market experienced a decline in sales and earnings compared to the prior year, largely due to the absence of a high-performing release comparable to the previous period's Monster Hunter 3 (Tri-).See it on page 9
06
The company maintained a stable financial position with total assets of 90,408 million yen and a cash position of 33,454 million yen as of September 30, 2010.See it on page 11

Summary

The financial results for Capcom for the first half of the fiscal year ending March 31, 2011, reflect a period of growth in net sales alongside a contraction in profitability. The company reported net sales of 40,706 million yen, representing an increase of 1,814 million yen compared to the same period in the previous year. This growth was primarily driven by the release of major titles within the Consumer Online Games segment. However, operating income declined to 3,942 million yen, and net income fell to 1,784 million yen, largely due to rising development costs and the adverse impact of a strengthening yen.

Geographically, the company experienced divergent performance trends. While the Japanese market saw a decline in sales and earnings compared to the prior year—partly due to the high-performing release of Monster Hunter 3 (Tri-) in the previous period—North American and European operations showed significant growth. This international expansion was bolstered by the successful launch of major titles tailored for overseas markets, such as Dead Rising 2, which contributed to an increase in trade receivables and procurement-related payables.

The financial position remained stable, with total assets reaching 90,408 million yen by September 30, 2010. The company’s cash position improved to 33,454 million yen, supported by long-term borrowings. Despite these results, the company faced significant foreign exchange headwinds, leading to a revision of its exchange rate assumptions for the remainder of the fiscal year. The strengthening of the yen against the U.S. dollar and the Euro necessitated a downward adjustment in projected earnings, as every one-yen appreciation against these currencies impacts operating income by approximately 150 million yen and 50 million yen, respectively.