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(as of November 6, 2018)

This page contains materials used with information meetings and telephone conferences with securities analysts that Capcom conducts for each quarterly earnings announcement. To ensure the fair disclosure of information to investors and shareholders worldwide, this page includes presentation materials, summaries of presentations by speakers, and summaries of question-and-answer periods. Investors can also view Japanese-language webcasts of Capcom's information meetings.

FY2018

2nd Quarter in FY2018 Presentation of Financial Results

October 29, 2018

Presentation materials
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Question and Answer Summary
Tell me about your promotional plan for Monster Hunter: World (MHW, below) as well as those for your other upcoming major releases in the second half of the fiscal year.

For MHW, we plan to retain existing users through future updates to the title, while aiming to capture new players by carrying out pricing strategies. We will also work toward developing the player community through holding real-world events overseas, similar to those held in Japan. For our major titles, such as Resident Evil 2, in addition to traditional promotions, we will focus on bolstering digital marketing in order to promote sales. This is carried out through centralizing management of sales data such as preorders and sales trends, and via analysis of various data points, including distribution of age, the repeat purchase rate, as well as feedback from comments on social networking sites.

Tell me the details regarding the PS impairment loss booked in the first half of the fiscal year, as well as your outlook on the PS plan for the second half of the fiscal year.

In light of the current market environment, we feel the revised plan is not conservative. Further, this is not only an issue of the market, as there is room for improvement within our development organization; as such, we will strengthen our organization and develop machines to be released in the next fiscal year and onward. Additionally, in the first half of the fiscal year we did a write down for machines scheduled to be released in the second half, recorded to cost of sales. However, we have not disclosed the specific amount of this.

How much room for growth remains for MHW?

We typically develop two- to three-year sales plans for major titles. For MHW's second year, we have planned for a reasonable sales figure given the 7.9 million units it sold in the first year of its release. We will endeavor to grow sales further in the second half of this fiscal year with a focus on the PC version of the game.

What are your thoughts regarding your title portfolio for the next fiscal year?

As has been the case up to now, we are managing and developing our titles using our 60-month map, which looks five years into the future. As such, we are preparing games, which includes utilizing our back catalog of titles, in order to achieve our medium- to long-term goal of sustainable growth for the next fiscal year as well.

Specifically, which catalog titles grew in the second quarter?

In addition to MHW, specific titles include Monster Hunter Generations Ultimate, Resident Evil 7 biohazard and Okami HD.

Tell me the current situation for MHW.

As of September 30, 2018, the title has sold a cumulative 10.7 million units, with approximately 70% of that total from sales outside of Japan. Also, within Japan the increase in the number of players aged 10 to 19 years old has exceeded our expectations.

What impact has censorship in China had on Capcom?

Because we fundamentally carry out business expansion in China through Tencent, we are not in a position to comment on this. We will continue to actively approach this massive market going forward; however as it does carry a degree of country risk, we would like to proceed one step at a time while ascertaining the situation.

What specifically did you do when you examined your esports investment amount in Other Businesses?

When laying out our plan at the beginning of the fiscal year, we had budgeted a larger amount for investment because our eSports Group in Japan was in its startup phase at that time. However, during the process of planning specific activities we refined our investment plan to be more precise. Our enthusiasm for esports remains the same and going forward we will continue to actively promote activities to expand the esports market.

In your full-year plan for Mobile, there has been a downward revision of 2 billion yen in net sales. What is the proportion of this between the first and second halves of the fiscal year?

The performance of existing titles was weaker than our expectations, and thus there was a downward revision for both the first half and the second half of the fiscal year; however, the amount for the second half is slightly larger.

What is your current situation as well as your future outlook on developing for cloud gaming?

While we did release a certain title supporting cloud gaming in the first half, this was done primarily for technological research purposes and did not have a significant impact on earnings. Based on the results of this research, we will internally consider further expansion into cloud gaming.

Tell me more regarding how your PS machines were out of line with the user perspective.

In analyzing the operations of machines at pachislo halls following release, we ascertained that our machines had been removed from the floor after a shorter period than we had expected. In order to fulfill our concept of creating pachislo that can be enjoyed for a long time, going forward we will adjust our internal development organization.

Will you change your basic strategy in accordance with changes in the Mobile market environment?

While we have revised our mobile title lineup in light of the market environment, there will be no fundamental change in strategy.

Tell me about development progress on Type 6 pachislo machines. Also, what is your outlook on Type 6 machines?

While we are unable to discuss details at this time, we have gathered positive reviews from the market regarding the change from Type 5.9 to Type 6 machines, and are continuing preparations for development of Type 6 machines. Going forward, our development will essentially focus on Type 6 machines, with the goal of releasing them during the March 2020 fiscal year and onward.

1st Quarter in FY2018 Presentation of Financial Results

July 30, 2018

Presentation materials
Related information
Question and Answer Summary
Capcom announced a price drop for the home console version of Monster Hunter: World (MHW, below) timed to take effect at the launch of the PC version. Was this measure a part of Capcom's plan for the title? Also, what is the status of orders for the PC version?

Both the release timing of the PC version and the price revision to the home console version were included in our plan for this title. Regarding the status of preorders of the PC version, we are currently analyzing a variety of information that we have gathered, and wish to continue with promotional activities in order to arrive at a final, actual sales figure.

What is your outlook for the Pachinko & Pachislo sub-segment from Q2 onward?

The market conditions here remain severe, with future events being all but impossible to read. We will continue to monitor our progress to the full-year plan going forward.

You have stated that Q1 results were progressing favorably to your plan. What factors contributed to outperforming your expectations?

This was due to growth in catalog unit sales of MHW while maintaining the title's initial, full price, as well as to recording shipments of Street Fighter 30th Anniversary Collection (which had a relatively lower development cost) in excess of our plan, and cumulative contributions from catalog titles released in past fiscal years.

What progress have you made in Mobile Contents?

While we are presently unable to disclose specific details, such as the release timing for new titles, steady progress is being made. We are currently in talks with our alliance partners, and are looking into the timing of an announcement. However, because the alliance titles will be released during the current fiscal year, the period of time they contribute to full-year earnings will be limited. As such, we do not expect significant contributions from these titles this fiscal year.

Tell me the expected unit sales for the recently announced Resident Evil 2. Also, do you have plans to remake other titles?

This title is one of our major Consumer releases for this fiscal year, and accordingly we expect it to be in the "million-seller" class of titles. It was received very well at E3, and in order to tie this first success to actual sales we are working out our promotional strategy. Further, regarding remakes and rereleases of titles in our back catalog, we expect to explore these further with a variety of properties as a part of our strategy to utilize our library of IP.

I understand that Resident Evil 2 is a remake. Tell me about its development costs and expected profitability.

While the base story and setting did exist, we have made the most of our cutting-edge game development environment to re-create the content, and are developing it with a budget appropriate for a Resident Evil title targeting the global market.

PC Others has returned to profitability, however will Capcom be able to maintain this level of profitability in the future?

We have been able to return PC Others to profitability because the initial development costs of existing titles were fully depreciated at the end of the previous fiscal year. We expect to be able to maintain a similar level of profitability overall if we are able to maintain the current level of net sales for existing titles going forward.

You have stated that the sales growth for a title released two years or more ago has been favorable. Which title specifically?

This growth was not limited to the sales of a single title, but rather was the cumulative result of multiple titles.

Did the announcement of the new Resident Evil 2 and Devil May Cry 5 have an effect on previous titles in these series?

We are beginning to see signs of customers purchasing previous titles in these series, including DmC: Devil May Cry. We plan to execute a number of marketing strategies to stimulate sales of these catalog titles in order to further build out the fan base of each series in the future.

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