CAPCOM IR

(as of October 8, 2010)

These tables and graphs show business and geographic segment information for the past 11 years. Although consistent growth is difficult due to the volatility of the market for home video games, we have achieved steady growth in sales in recent years.

	2006/3	2007/3	2008/3	2009/3	2010/3
Home Video Games (Millions of yen)	42,718	43,813	51,679	62,892	44,015
Arcade Operations (Millions of yen)	11,568	13,043	13,406	13,509	11,985
Arcade Games Sales (Millions of yen)	6,956	8,021	6,538	8,023	2,280
Contents Expansion (Millions of yen)	5,742	7,102	8,525	4,628	5,819
Other Businesses (Millions of yen)	3,268	2,561	2,947	2,824	2,736

(Millions of yen)(%)

Our core business, accounting for approximately 70% of net sales. Performance in this segment is significantly affected by the presence or absence of hit titles, which has resulted in repeated erratic fluctuation. However, structural reforms in pursuit of higher quality and profitability implemented in the fiscal year ended in March 2003, including a 60-month title development plan, a "two-step authorization process" and the introduction of a common development engine, resulted in more efficient title distinction and development. These efforts enabled Capcom to turn out three million-seller titles since the fiscal year ended in March 2006 and increase earnings for three straight years, until the fiscal year ended in March 2010, when sales and profits declined on the strategic postponement of major game software.

(Millions of yen)(%)

Capcom began full-scale arcade operations in 1991. In response to growth in the number of large-scale suburban shopping centers that started in Japan around 1993, Capcom initiated the strategy of becoming the leading arcade operator in targeted regions. The ability of shopping centers to attract large numbers of people along with an extensive arcade scrap-and-build program produced a significant improvement in segment profitability starting in the fiscal year that ended in March 2002. However, a rapid increase in the number of arcades opened by competitors since the March 2007 fiscal year has resulted in intense competition that caused performance at existing Capcom arcades to decline. In addition, there was a decrease in the number of new, highly profitable arcades due to enactment in Japan of laws aimed at supporting the development of communities by restricting openings of large stores and shopping centers. Segment earnings have been down sharply for three consecutive years as a result. Capcom greatly reduced the number of new arcades, closed unprofitable locations and rigorously cut costs. These measures have been yielding a gradual recovery in the profit margin following the low point reached in the March 2009 fiscal year.

(Millions of yen)(%)

The core business in Capcom's early years, Arcade Game Sales produced enormous earnings primarily from video game machines that include the mega-hit "Street Fighter" series. Earnings began to decline in 1994 as dramatic improvements in the performance of home video game consoles eroded the superiority of arcade machines. In response, Capcom started expanding its lineup of prize-winning and coin-operated games in the fiscal year that ended in March 2004. With these machines, arcades at large-scale shopping centers can attract more customers. Although earnings began to improve, there were steep declines in segment sales and earnings in the March 2010 fiscal year because of the recession and an inadequate lineup of game titles.

(Millions of yen)(%)

Capcom started a pachinko & pachislo (P&S) business in 1996 and a mobile content business in 1999 for the purpose of maximizing earnings from the company's portfolio of popular content. In the fiscal year that ended in March 2007, segment sales increased due to the purchase of an overseas company that develops mobile content but earnings fell because of amortization of the associated goodwill. In the March 2009 fiscal year, Capcom started developing and selling its own pachinko and pachislo machines by purchasing a company that develops these machines. However, weak sales caused this segment to become unprofitable. In the March 2010 fiscal year, this segment returned to profitability as Capcom enacted structural reforms in the machine sector of its P&S business and resumed the provision of products and services to other companies, which is highly profitable.

(Millions of yen)(%)

In recent years, there has been a dramatic change in the operating environment in the publishing business due primarily to the shift in the primary source of information from publications to the Internet. In the March 2007 fiscal year, this segment reported a loss resulting from a downturn in profitability in the publishing business, mainly involving books linked to major Capcom game titles, and a valuation loss on inventories of returned books. In response, Capcom focused operations more tightly on publishing books linked to its own titles, optimized inventory levels and increased overseas licensing of characters and sales of character goods. Due to these actions, the Other Businesses segment has improved to the point of achieving the highest profit margin of all business segments since the fiscal year that ended in March 2009.

*Note1. Arcade Operation Business is included before FY ended March 31, 2001.
*Note2. Contents Expansion Business is included before FY ended March 31, 2004.

	2006/3	2007/3	2008/3	2009/3	2010/3
Japan (Millions of yen)	48,683	50,074	56,457	54,193	47,269
North America (Millions of yen)	11,748	15,450	15,796	21,851	10,825
Europe (Millions of yen)	9,105	8,090	9,782	14,167	7,813
Other (Millions of yen)	717	927	1,060	1,665	928

(Millions of yen)(%)

(Millions of yen)(%)

(Millions of yen)(%)

(Millions of yen)(%)