Business Performance (Japan GAAP)

Here we breakdown our consolidated business results for the nine months ended December 31, 2023 with graphs and diagrams.

In the fiscal year ended March 31, 2024, Capcom Co., Ltd. (the "Company," together with its subsidiaries, the "Group") actively pursued investments for growth focused on the ongoing enhancement of digital sales in order to further evolve and expand within the global market. Moreover, the Group was pleased to mark the 40th anniversary of its founding in June of last year, a milestone it was able to achieve thanks to the support of all stakeholders. With the aim of stable and sustainable growth, and as part of its human resources investment strategy, which is one of the Group’s top priorities, the Company made further improvements to the workplace environment. These included strengthening its human resources organization, establishing a new production support facility, called Creative Studio, introducing a progressive program with a more inclusive definition for spouses/partners, and enhancing its employee welfare and benefits programs. Furthermore, in order to continue strengthening its development and technological capabilities, the Company worked to improve corporate value by acquiring a company with strengths in 3D computer graphics production technology for consumer game development as a wholly-owned subsidiary.

With these kinds of management policies, the Company worked to increase global sales in its core Digital Contents business by launching major new titles in its flagship series and proactively promoting digital sales of catalog titles. These efforts brought sales volumes in the Digital Contents business in the fiscal year under review to 45.89 million units, exceeding the previous fiscal year’s figure of 41.70 million units, and improving the value of the Group’s content. The Company also worked to enhance the brand of its intellectual properties (IPs) through utilizing its major IPs in film and television productions, licensed merchandise, and esports. In addition, the Company worked to increase earnings through efficient operation of amusement arcades and the promotion of store openings in new store formats in Arcade Operations, as well as through the introduction of smart pachislo machines and catalog sales leveraging the Group’s popular IPs in Amusement Equipments.

As a result, net sales for the fiscal year under review increased by 21.0% year on year to 152,410 million yen. Operating income increased by 12.3% year on year to 57,081 million yen, ordinary income increased by 15.7% to 59,422 million yen, and net income attributable to owners of the parent increased by 18.1% to 43,374 million yen. This was the Company’s eleventh consecutive year of increased operating income.

In Digital Contents, Street Fighter 6 (for PlayStation 5, PlayStation 4, Xbox Series X|S, and PC), the latest title in the series leading the Group’s eSports activities, was released in June 2023 to global acclaim. As a result, the game achieved sales of 3.3 million units, which contributed to improved segment results.

In addition, Dragon’s Dogma 2 (for PlayStation 5, Xbox Series X|S, and PC) was released in March 2024 as the first all-new game in the series in 12 years. Dragon’s Dogma 2 is an open world action role playing game where players can enjoy adventure in a fantasy realm, and thanks to strong support from series fans and a surge in new users, the game performed well, selling over 2.62 million units while also contributing to sales growth of Dragon’s Dogma: Dark Arisen, a catalog title in the same series.

Regarding catalog titles, in conjunction with the announcement of Monster Hunter Wilds, an all-new addition to the Monster Hunter series, sales of the same series’ catalog title Monster Hunter: World were solid. The game achieved cumulative sales of 25.32 million units worldwide, while sales of Monster Hunter World: Iceborne and Monster Hunter Rise: Sunbreak also continued to grow.

Further, in addition to reaching a cumulative total of 7.02 million units sold for Resident Evil 4, which launched in March 2023, and contributing to catalog sales growth, the Company conducted proactive promotional campaigns to gain wider recognition for its IPs and acquire new fans, focusing primarily on series title sales, such as Resident Evil 2. As a result, catalog title sales reached 36.29 million units, exceeding 29.3 million units in the same period of the previous fiscal year and boosting earnings.

In Mobile Contents, Monster Hunter Now (an out-licensed title for iOS and Android) was released in September, representing the latest mobile game in the Monster Hunter series. The number of worldwide downloads of the game exceeded 10 million, driving wider recognition of the IP.

As a result, the segment earned net sales of 119,841 million yen (up 22.1% year on year), and operating income of 59,831 million yen (up 11.8% year on year).

In Arcade Operations, economic activities recovered due to the reclassification of COVID-19 as a Category V infectious disease (a category that includes the seasonal flu). As such, the Company worked to increase earnings through measures such as the efficient operation of existing stores and store openings in new lines of business.

In April 2023, the Company opened a Kids Banet attraction in Shizuoka, a facility featuring playground equipment for kids, as well as a Crazy Banet interactive amusement facility at Aeon Mall in Niihama, Ehime Prefecture in June 2023. Moreover, the Company opened a capsule toy specialty store, Capsule Lab Harajuku Takeshita Street, in Tokyo in December 2023, as well as a photo sticker specialty store, Puri Mart/Capsule Lab Sannomiya, in Hyogo Prefecture in March 2024, bringing the total number of stores to 49.

The Company also promoted collaboration between its businesses, such as by securing spaces for visitors to enjoy Monster Hunter Now at its stores.

As a result, the segment earned net sales of 19,343 million yen (up 23.9% year on year), and operating income of 1,868 million yen (up 52.2% year on year).

In Amusement Equipments, the pachislo market remained strong driven by smart pachislo machines. The Company’s first smart pachislo machine, Sengoku BASARA GIGA, sold 15 thousand units, while its second smart pachislo machine, Resident Evil Village, sold 10 thousand units, both of which contributed to earnings.

The Company also achieved solid catalog sales due to ongoing demand for Shin Onimusha 2, launched in August 2022, and Monster Hunter World: Iceborne, launched in January 2023, driven by their strong performance in the market.

In total, sales of five models in the fiscal year under review, including three new models, was 31 thousand units.

As a result, the segment earned net sales of 9,020 million yen (up 15.6% year on year), and operating income of 4,117 million yen (up 19.9% year on year).

In Other Businesses, the Company continued to focus on movie and television adaptations of its major IPs and developing character merchandise to increase the brand value of its titles, as exemplified by the worldwide release of the feature-length CG-animated movie Resident Evil: Death Island in July 2023 and the worldwide release of the animated Onimusha series on Netflix in November 2023.

Regarding its eSports business, the Company began featuring Street Fighter 6, the latest title in the series, in its activities. For the Capcom Pro Tour 2023, which is held worldwide, the Company offered its highest-ever prize pool, totaling over $2 million USD. The final tournament of the tour, CAPCOM CUP X, was a huge success with more than 190,000 people simultaneously livestreaming the event. Further, the Company started a Japan-based team league, Street Fighter League: Pro-JP 2023, before going on to organize the final tournament for the same league held in North America and Europe, Street Fighter League: World Championship 2023, in which heated competition took place. In addition, the Company took measures to expand its user base on a global scale, such as by promoting esports with events held in Singapore and other countries.

As a result, the segment earned net sales of 4,204 million yen (down 3.6% year on year), and operating income of 883 million yen (down 38.4% year on year).

Total assets as of the end of the fiscal year ended March 31, 2024, increased by 26,111 million yen from the end of the previous fiscal year to 243,476 million yen. The primary increase was 23,074 million yen in cash on hand and in banks. The primary decrease was 1,955 million yen in deferred tax assets.

Total liabilities as of the end of the fiscal year ended March 31, 2024, decreased by 7,841 million yen from the end of the previous fiscal year to 48,394 million yen. The primary increases were 2,661 million yen in accrued bonuses, 2,373 million yen in long-term borrowings, and 1,055 million yen in provision for share awards. The primary decreases were 6,690 million yen in accrued income taxes, 4,772 million yen in deferred revenue, and 3,000 million yen in current portion of long-term borrowings.

Net assets as of the end of the fiscal year ended March 31, 2023, increased by 33,952 million yen from the end of the previous fiscal year to 195,081 million yen. The primary increases were 43,374 million yen in net income attributable to owners of the parent, and 4,865 million yen in cumulative translation adjustments. The primary decrease was 14,278 million yen in dividends from retained earnings.

Cash and cash equivalents as of the end of the fiscal year ended March 31, 2024, increased by 19,620 million yen from the end of the previous fiscal year to 109,091 million yen.

Please refer to "Cash Flows."