Capcom Hit with Major YTD Losses
In case you haven’t noticed from all the headlines lately, it’s that time of the year when companies have to report on their progress for the third financial quarter of the year. The most recent game company to step up to the firing line was Capcom, who released details of its year-to-date financials to investors late yesterday. The results were pretty rough, with the company reporting an overall loss of net income totaling a whopping 95 percent. However, things aren’t as bad as they seem, and the company expects to change things by the end of the financial year.
According to the company, the less-than-stellar sales were attributed to “the slacking performance of Arcade Operations and Contents Expansion Business, the sharp rise of yen’s exchange rate, and not having the release of flagship titles until the 4th quarter in the Home Video Games Business.”
The presentation to investors revealed that net income had dropped to 179 million yen (nearly $2M USD) so far this year, as opposed to 3.75 billion yen (approximately $41.8M USD) the same time the year prior. Sales for the company dropped 8.6 percent, with operating income down 57.2 percent. Even the console market was rough for Capcom, with the home video game business dropping 13.4 percent.
It wasn’t all bad news for Capcom, though. Monster Hunter Freedom 2G PSP the Best showed strong sales, and Grand Theft Auto IV (which the company handles distribution for in Japan) and Mega Man Star Force 3 for Nintendo DS both hit their achieved their sales goals.
“Nonetheless, we were not able to achieve favorable profits, and overall sales remained weak because we were in a transitional period in our product development cycle. Many of the flagship software titles are scheduled to be released in the 4th quarter,” said the company in a statement.
It’s no surprise that Capcom is looking to the fourth quarter to save the day, financially speaking. Street Fighter IV, Bionic Commando, and Resident Evil 5 are all due to hit retail before the end of the quarter. It’s a pretty safe bet that a least one or two of those games MIGHT sell more than just a few copies, bumping up Capcom’s bottom line before wrapping up the 2008 financial year.
