Capcom Overview of Strategies and Plans: Fiscal Year Ending March 31, 2019

Key insights

6 takeaways

01
Capcom targets 96 billion JPY in net sales and 17 billion JPY in operating income for the fiscal year ending March 31, 2019, marking a projected 6.0% increase in operating income.See it on page 30
02
The company aims to ship 25 million units of consumer software, with digital downloads projected to account for 46.3% of total consumer net sales.See it on page 14
03
A core strategic priority is the long-term monetization of the back-catalog, with unit sales for older titles expected to reach 17.6 million units.See it on page 15
04
The Digital Contents segment is the primary growth engine, maintaining a projected operating margin of 26.5% through the 'Single Content Multiple Usage' strategy.See it on page 16
05
R&D investment is set at 30 billion JPY to support product development and global expansion, specifically targeting North American and European markets to counter declining physical sales in Japan.See it on page 31
06
The company is scaling its eSports division and arcade operations, aiming for a 2% increase in same-store sales through new store openings and community-focused events.See it on page 19

Summary

Capcom’s strategy for the fiscal year ending March 31, 2019, centers on achieving six consecutive years of increased operating income by leveraging its core digital content business and expanding its global footprint. The company’s primary thesis emphasizes a "Single Content Multiple Usage" strategy, which aims to maximize the value of its proprietary intellectual property across home video games, mobile platforms, arcade operations, and character licensing. By focusing on both new title releases and the long-term monetization of its back-catalog, the company seeks to establish a stable, recurring revenue foundation.

Key financial projections for the 2019 fiscal year include net sales of 96 billion JPY and an operating income of 17 billion JPY, representing a 1.6% and 6.0% increase, respectively, over the previous year. The Digital Contents segment remains the primary growth driver, with a projected operating margin of 26.5%. The company plans to ship 25 million units of consumer software, with a significant strategic shift toward digital downloads, which are forecasted to account for 46.3% of consumer net sales. Furthermore, the company is prioritizing the growth of its catalog titles, with unit sales for older releases expected to reach 17.6 million units.

The scope of these operations is global, with a clear strategic pivot toward North American and European markets to offset declining physical sales in Japan. Methodologically, the company utilizes internal market analysis and historical performance data to guide its R&D investments, which are set at 30 billion JPY for the period. Additionally, the company is actively expanding its eSports division and arcade operations, aiming for a 2% increase in same-store sales through new store openings and community-focused events, despite broader industry volatility.