Capcom Consolidated Financial Results: 9 Months FY2019

Key insights

6 takeaways

01
Capcom achieved a 37.1% increase in operating income to 18,448 million yen and a 42.3% rise in net income to 13,065 million yen for the nine months ending December 31, 2019, despite a 13.6% decline in net sales.See it on page 1
02
The company’s shift toward high-margin digital distribution successfully offset a 13.6% drop in total net sales, as evidenced by the Digital Contents segment reporting a 30.1% increase in operating income despite a 15.2% decline in segment sales.See it on page 13
03
Monster Hunter World: Iceborne served as a primary performance driver with over 3.2 million units shipped, supported by continued sales of catalog titles Resident Evil 2 and Devil May Cry 5.See it on page 5
04
Arcade Operations grew significantly during the period, with net sales rising 13.8% and operating income increasing 36.6% due to new location openings and community-focused engagement.See it on page 5
05
The Amusement Equipments business saw a 79.5% decline in net sales due to a lack of new model launches, though it remained profitable by generating 376 million yen through licensing.See it on page 5
06
Capcom maintains a stable financial foundation with total assets of 129,874 million yen and a shareholders' equity ratio of 75.0%.See it on page 1

Summary

Capcom’s consolidated financial results for the nine-month period ending December 31, 2019, demonstrate a strategic shift toward high-margin digital distribution, resulting in improved profitability despite a decline in overall net sales. The company reported net sales of 52,908 million yen, a 13.6% decrease compared to the same period in the previous fiscal year, primarily attributed to the transition away from physical package sales. Conversely, operating income rose significantly by 37.1% to 18,448 million yen, while net income attributable to owners of the parent increased by 42.3% to 13,065 million yen.

The Digital Contents segment served as the primary driver of this financial performance. The release of Monster Hunter World: Iceborne, which shipped over 3.2 million units, combined with the sustained popularity of catalog titles like Resident Evil 2 and Devil May Cry 5, bolstered earnings. The company successfully leveraged a growing user base and an increased proportion of digital download sales to enhance margins. While the Digital Contents segment saw a 15.2% decline in net sales, its operating income grew by 30.1%.

Other business segments showed mixed results. The Arcade Operations segment reported growth, with net sales increasing by 13.8% and operating income by 36.6%, supported by the opening of new locations and a focus on community-based engagement. The Amusement Equipments business experienced a sharp 79.5% decline in net sales due to the absence of new model launches, though it achieved a modest operating profit of 376 million yen through licensing activities. The company maintains a strong financial position with total assets of 129,874 million yen and a shareholders' equity ratio of 75.0%.