Capcom 3rd Quarter Financial Results: Fiscal Year Ending March 31, 2013

The third-quarter financial results for the fiscal year ending March 31, 2013, detail a period of volatility for Capcom, characterized by strong growth in the amusement equipment sector offset by underperforming packaged software sales. The primary thesis centers on the company’s strategic pivot toward digital content and pachislo machine sales to mitigate the risks associated with the highly competitive and fluctuating home video game market.

Key financial findings for the nine-month period ending December 31, 2012, show net sales of 72.6 billion yen and operating income of 9.8 billion yen, representing a year-over-year increase. However, the company was forced to lower its full-year forecasts in December 2012 due to major titles falling short of sales targets and development delays. Specifically, while Resident Evil 6 achieved 4.8 million units in sales, repeat sales for major titles remained lackluster. Conversely, the amusement equipment segment experienced a significant surge, driven by the record-breaking performance of the Resident Evil 5 pachislo machine, which sold 35,000 units.

The scope of these results covers Capcom’s global operations across digital contents, arcade operations, and amusement equipment. Digital content remains a core focus, with online and mobile segments showing growth, including a social game user base exceeding 7.2 million members in Japan and 86 million cumulative downloads for the Beeline brand. Despite these gains, the company’s overall profitability was pressured by increased development costs and a reduction in the total number of packaged software titles released. Management continues to emphasize cost management and the expansion of online revenue streams to stabilize future earnings.