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Capcom Reports Q1 Financial Decline Despite Strong Digital Content Sales

"Monster Hunter: World" Nears 1 Million Quarterly Sales Six Years Post-Launch
Japan
c 9697.TSE Mid and Small Cap 2000 Games 75 Entertainment 100
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Capcom Co., Ltd. announced its consolidated business results for the three months ending June 30, 2024, showing significant declines across key financial metrics. Net sales dropped 32.5% year-over-year to ¥29.60 billion (US$206 million). Operating income fell by 46.4% to ¥12.89 billion (US$90 million), ordinary income decreased by 47.9% to ¥13.49 billion (US$94 million), and net income attributable to owners of the parent was down 45.1% to ¥9.98 billion (US$69 million). Despite these decreases, Capcom outperformed its plan for all business segments.

The primary driver of sales during this period was Capcom’s core Digital Contents business, focusing on releases of existing titles on additional platforms and catalog sales of major titles from previous fiscal years. The total sales volume reached 9.53 million units, aligning with company plans and making solid progress toward the full-year target, despite being lower than the same period last year when “Street Fighter 6” was released.

Capcom also worked to enhance its brand through various initiatives, including film and television productions, licensed merchandise, and eSports. In the Arcade Operations segment, the company aimed to increase earnings through efficient operations of existing stores. Additionally, the launch of a new smart pachislo machine in the Amusement Equipments segment contributed to overall performance.

Looking ahead, Capcom maintains its forecast for the fiscal year ending March 31, 2025. The company projects net sales of ¥165 billion (US$1.15 billion), operating income of ¥64 billion (US$445 million), ordinary income of ¥63 billion (US$438 million), and net income attributable to owners of the parent of ¥46 billion (US$320 million).

Also Capcom revealed its top-selling console games , showcasing the enduring popularity of the “Monster Hunter” series. “Monster Hunter: World,” released on January 26, 2018, sold 998,000 units in the quarter, bringing its cumulative sales to 26.32 million units.

The major expansion, “Monster Hunter: World: Iceborne,” followed closely with 819,000 units sold, totaling 13.42 million units to date. “Monster Hunter Rise” also performed well, selling 725,000 copies, while its expansion, “Monster Hunter Rise: Sunbreak,” sold 672,000 copies. Other notable titles included “Resident Evil RE:4” with 483,000 units, “Street Fighter 6” with 469,000 units, and “Dragon’s Dogma 2” with 461,000 units.

Capcom’s early adoption of digital sales and PC game stores like Steam has proven effective, allowing the company to leverage price strategies such as sales events. This approach has positioned Capcom as a strong performer, with seven of the top 20 titles on Steam in Japan.

The shift from packaged games to digital sales has transformed the console game business. Where initial sales were once critical, the widespread adoption of digital distribution now allows for prolonged sales periods. Capcom’s success with sustained sales for older titles like “Monster Hunter: World” underscores the effectiveness of this strategy.

 

 

 

 

 

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