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IR Top Page > Financial Information > Financial Review

Financial Review (Japan GAAP)

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(as of May 7, 2019)

Here we breakdown our consolidated business results for the nine months ended December 31, 2018 with graphs and diagrams.

1. Operating results overview

Net sales Operating income Ordinary income Net income attributable to owners of the parent Earnings per share of common stock
100,031
million yen
( 5.8%
increase YoY)
18,144
million yen
( 13.1%
increase YoY )
18,194
million yen
( 19.3%
increase YoY )
12,551
million yen
( 14.8%
increase YoY )
115.45 yen

Net sales (cumulative)

Operating income (cumulative)

Ordinary income (cumulative)

Net income attributable
to owners of the parent (cumulative)

During the fiscal year ended March 31, 2019, our industry witnessed a slowdown in mobile games as well as steady yet uneven growth in the market for home video games due to market maturation trends. Meanwhile, esports, which was a demonstration event at the 2018 Asian Games last year, continued to increase in popularity around Japan with the start of league matches and the launch of pro teams domestically in an effort to expand the fan base.

In such an environment, Monster Hunter: World (for PlayStation 4, Xbox One and PC), which shook up the market last year, continued to report strong sales, with total shipments breaking 12 million units, marking a record high for any single title in the Company's history. Additionally, the Company's other flagship brands demonstrated their appeal and boasted strong sales during this period, as Resident Evil 2 (for PlayStation 4, Xbox One and PC) scored a major hit, shipping more than 4 million units, while Devil May Cry 5 (for PlayStation 4, Xbox One and PC) shipped 2 million units, backed by its established popularity in overseas markets. Furthermore, the Company took a strategic step in cultivating the new business domain of esports, an area that has been attracting increasing attention in the past year. This included holding the Capcom Pro Tour Japan Premier at the Tokyo Game Show 2018, generating much excitement among spectators, and launching the Capcom Street Fighter League Powered by RAGE in February 2019, leveraging the popular Street Fighter versus fighting game series that many consider to have started esports.

As a result, for the fiscal year ended March 31, 2019, consolidated net sales were 100,031 million yen (up 5.8% from the previous fiscal year). In terms of profitability, thanks to growth in the Digital Contents business, operating income was 18,144 million yen (up 13.1% from the previous fiscal year), ordinary income was 18,194 million yen (up 19.3 % from the previous fiscal year), and net income attributable to the owners of the parent was 12,551 million yen (up 14.8% from the previous fiscal year), with all three figures increasing to record highs once again, as was the case in the previous fiscal year.

Status of business by operating segment

1. Digital Contents business

Net sales (cumulative)

Operating income (cumulative)

Operating margins (cumulative)

In this business, the popularity of major title Resident Evil 2 (for PlayStation 4, Xbox One and PC) exceeded expectations, driving the Company's business performance. Devil May Cry 5 (for PlayStation 4, Xbox One and PC) targeted overseas markets and also performed strongly, backed by consistent demand. Additionally, the Monster Hunter series contributed significantly to improving profits: flagship title Monster Hunter: World (for PlayStation 4 and Xbox One), which was a phenomenal success in the previous fiscal year, maintained popularity through the expansion of its user base, while the Steam version for PC also performed strongly, boosting profits; meanwhile, Monster Hunter Generations Ultimate (for Nintendo Switch) enjoyed robust sales through its release in markets outside of Japan.

Furthermore, Mega Man 11 (for PlayStation 4, Nintendo Switch, Xbox One and PC) and Street Fighter 30th Anniversary Collection (for PlayStation 4, Nintendo Switch, Xbox One and PC) performed well. In addition, high-margin catalog titles, including Resident Evil 7 biohazard (for PlayStation 4, Xbox One and PC), increased sales through their enduring popularity.

The resulting net sales were 82,982 million yen (up 11.9% from the previous fiscal year) and operating income was 23,315 million yen (up 22.0% from the previous fiscal year).

2. Arcade Operations business

Net sales (cumulative)

Operating income (cumulative)

Operating margins (cumulative)

In this business, amid intensifying interregional competition, the Company made efforts to secure a wide range of customers including repeat customers, the middle-aged and seniors, women and families with children, as well as inbound tourists. These efforts included installing game machines that meet diverse customer needs, conducting service day campaigns and holding various events. In addition, as a new undertaking, in November 2018, the Company launched Capcom Net Catcher Cap Tore, an online crane game that can be played by remote control from smartphones and PCs.

During the period under review, the Company opened two stores and closed one, bringing the total number of stores to 37.

The resulting net sales were 11,050 million yen (up 8.0% from the previous fiscal year) and operating income was 1,096 million yen (up 24.6% from the previous fiscal year).

3. Amusement Equipments business

Net sales (cumulative)

Operating income (cumulative)

Operating margins (cumulative)

In the Pachinko & Pachislo sub-segment, the Company launched Street Fighter V, Biohazard into the Panic, and other products in a softening market environment. However, sales struggled due to a downturn in consumer confidence and dampening investment by the Pachinko/Pachislo hall operators. Arcade Games Sales also struggled and business was generally weak, due to a lack of new products, necessitating a change in strategic direction going forward for the Company.

The resulting net sales were 3,422 million yen (down 56.1% from the previous fiscal year) and an operating loss of 2,668 million yen (compared to an operating loss of 764 million yen in the previous fiscal year).

4. Other Businesses

Net sales (cumulative)

Operating income (cumulative)

Operating margins (cumulative)

The net sales from Other Businesses, mainly consisting of royalty income from the licensing and sale of character merchandise, were 2,575 million yen (up 10.2 % from the previous fiscal year) and operating income was 811 million yen (down 28.0 % from the previous fiscal year).

2. Explanation of the consolidated financial position

Assets

Total assets as of the end of the fiscal year ended March 31, 2019 decreased by 1,421 million yen from the end of the previous fiscal year to 123,407 million yen.
The primary increase was 6,464 million yen in cash on hand and in banks. The primary decrease was 8,708 million yen in work in progress for game software.

Liabilities

Total liabilities as of the end of the fiscal year ended March 31, 2019 decreased by 4,750 million yen from the end of the previous fiscal year to 34,658 million yen.
The primary decrease was 1,579 million yen in long-term borrowings.

Net assets

Net assets as of the end of the fiscal year ended March 31, 2019 increased by 3,328 million yen from the end of the previous fiscal year to 88,749 million yen.
The primary increase was 12,551 million yen in net income attributable to owners of the parent. The primary decreases were 3,558 million yen in dividends from retained earnings and 6,001 million yen in repurchase of treasury stock.

3. Forecast and Outlook

Earnings forecast for the fiscal year ending March 31, 2020
(From April 1, 2019 to March 31, 2020)

Note: Percentage represents change from the same period of the previous fiscal year.

  Net sales Operating income Ordinary income Net income attributable to owners of the parent Net income per share
Year ending March 31, 2020 85,000 million yen
(15.0% decrease YoY)
20,000 million yen
( 10.2% increase YoY )
19,500 million yen
( 7.2% increase YoY )
14,000 million yen
( 11.5% increase YoY )
131.15

Note: 1. Capcom discloses a full year business forecast, as it manages its business performance on an annual basis.

2. With an effective date of April 1, 2018, Capcom performed a 2-for-1 stock split of its common stock.
For "Net income per share," Capcom took the stock split into consideration.

Outlook

The company expects an increasingly high-tech landscape, where high-resolution graphics and the adoption of AI (Artificial Intelligence) and VR (Virtual Reality) will enable greater realism and natural movement by characters in home video games.

As such, to generate synergy with its popular games via greater global brand awareness and value, the Company has been producing world-leading content, with brands such as Street Fighter and Resident Evil being made into Hollywood movies, now followed by Monster Hunter and Mega Man, which are also scheduled for live-action film adaptation. In recent years, as the domestic market matures, further efforts to increase sales in the larger overseas market have become essential to maintain sustained growth. The Company will, therefore, develop and sell titles that appeal to diverse customer needs, including games that are popular overseas, thereby enhancing customer satisfaction and ensuring its competitive advantage.

Moreover, in the fast-growing esports business, the Company, in addition to leveraging its abundant experience and operational knowhow accumulated over the years in the US, intends to make a full-scale entry into the market and gain a firm footing through the allocation of the necessary funds and human resources. Furthermore, by focusing its management resources in growth areas and priority divisions, as well as reinforcing existing divisions and downsizing and withdrawing from unprofitable divisions, the Company will rebuild its businesses in line with environmental changes. It will also aim for more cohesive business development and higher management efficiency while at the same time enhancing the corporate value of the entire Group by carrying out the business strategies and priority measures that utilize the Company's strengths.

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