March 30, 2004

Capcom Company., Ltd.
3-1-3 Uchihirano-machi,Chuo-ku,
Osaka 540-0037, Japan

Notice about Business Division of R&D Under Corporate Dividing Rules

Capcom Co., Ltd., hereby announces that it was decided at the board meeting held on March 30, 2004 that one of R&D division will be divided into a new subsidiary under corporate dividing rules in Japan and the new company name is to be Clover Studio Co., Ltd.

1. Objective for New Business Division

Our company started its overall company restructuring since October 2002 in order to have competitiveness in the worldwide market and have the company stepped up to another growth curve with a view of reformation of operations as well as its organization from the scratch.
Since April 2004, review on R&D structure and marketing divisions as key management functions has been made and necessary structural changes were taken from time to time. As a part of those restructuring processes, our company determined that one of R&D divisions for Consumer products will be spun off as a new subsidiary to generate maximum profits as a group through "New Value Creation".
Through pursuit of unique and original titles creation, our group keeps enhancing original-brand values and will endeavor to improve profitability of the business through visible management accountability.

2. Major Points of Business Division under Corporate Dividing rules


Board Meeting approval: March 30, 2004
Dividing date: July 1, 2004 (plan)
Registry of New Company: July 1, 2004 (plan)

This business division process is based on Summary New corporate foundation granted under dividing rules in Japanese Commercial code Article 374-6 without going through the annual shareholders meeting process.


Business Division Method
1. Dividing Method
Capcom is as a dividing party and Clover Studio Co., Ltd., is as a divided and succeeding party. The method is a new business division corporate method, which means that a divided party will issue its share to the dividing party.
2. The reason why Capcom adopted the method is as follows;
This business division is based on the strategy that it is crucial for our group to generate maximum corporate value by improving its profits with a swift decision process as well as clear accountability.


Allotment of New Issuing Shares
The new corporate as a wholly owned subsidiary will issue its share of 1,800 and all the shares
will be allotted to the dividing corporate.


Cash distribution upon business division and transfer
There will be no cash distribution in relation to the business division and transfer.


The assets, liability, rights and obligations to be succeeded by the new corporate
The new corporate will succeed all its assets and liability No. 9 R&D Division will have as of the business division date.


Implementation of debt obligations
Both the dividing corporate and the new company will implement any debt due after the business division date.


Board Members of New Company
Board of Directors: M/S Atsushi Inaba, Ryuta Takahashi, Shinnji Utsunomiya, Kenzo Tsujimoto, Haruhiro Tsujimoto, Tamio Oda and Yoshifumi Yamashita
Statutory Auditors: M/S Morio Kuroda, Shigeo Konishi

3. Basic Information for Capcom Co., Ltd. and the New Company

(1) Trade Name

Capcom Co., Ltd.(company to divide a unit)

Clover Studio Co., Ltd. (succeeding company)

(2) Principal Businesses

Planning, development and sale of software

Development of software

(3) Date of Establishment

May 30, 1979

July 1, 2004

(4) Head Office

3-1-3 Uchihirano-machi, Chuo-ku, Osaka 540-0037, Japan

3-2-8 Uchihirano-machi, Chuo-ku, Osaka 540-0037, Japan

(5) Representative

Kenzo Tsujimoto, President and CEO

Atsushi Inaba, President and CEO

(6) Paid-in Capital (millions of yen)



(7) Shares Issued



(8) Shareholders' Equity (millions of yen)



(9) Total Assets (millions of yen)



(10) Financial Closing Date

March 31

March 31

(11) Number of Employees



(12) Major Partners

Sony Computer Entertainment Inc., Nintendo Co.,Ltd., and Microsoft Corporation

Capcom Co., Ltd.

(13) Major Shareholders and Shareholdings

Crossroad Limited

Capcom Co., Ltd.      100%

Kenzo Tsujimoto

 Japan Trustee Services Bank,Ltd.
(Trust Account) 5.53%

Master Trust Bank of Japan, Ltd.
(Trust Account) 5.46%

UFJ Trust Bank Lmd. (Trust Account : A)

(14)Main Banks

Mizuho Corporate Bank, Ltd., Mitsubishi Tokyo Financial Group, Inc. (MTFG),
UFJ Bank Limited, Sumitomo Mitsui Banking Corporation

To be decided.

(15) Relationship between Capcom Co., Ltd. and the New Company


Capcom Co., Ltd. will hold 100% equity share in New Company.


Capcom Co., Ltd. will assign its Directors to New Company. Employees are expected to enter the new company after retirement of Capcom Co., Ltd.


Capcom Co., Ltd. sells software developed by Clover Studio Co., Ltd.
Capcom Co., Ltd. will farm out development of game software to Clover Studio Co.,Ltd.

Notes: Information of Capcom Co., Ltd. is mentioned as of March 31, 2003 and of Clover Studio Co., Ltd. (New Company) as of anticipation at the time of its establishment.

(16) Financial Result for The Most Recent Three Fiscal Year

(Millions of Yen, except per share amounts)

Capcom Co., Ltd (company to divide a unit)

Financial Term




Net Sales




Operating Income




Ordinary Income




Net Income




Earnings Per Share (Yen)




Dividends Per Share (Yen)




Shareholders' Equity Per Share (Yen)




4. Description of The Business to be Divided


Business to Be Divided
Development of Game Software

(2)  Financial Result of The Business to Be Divided in FY2002

(Millions of Yen)


Business to Be Divided


Percentage (b/a)

Net Sales




Gross Income




Operating Income




Notes: Financial Result of the business to be divided is based on figures in inter-company transaction

(3)  Assets and Liabilities of The Business to Be Divided
(forecast February 29, 2004)

(Millions of Yen)

Account Title

Book Value

Account Title

Book Value

Current Asset


Current Liabilities


Fixed Asset








5. Information about Capcom Co., Ltd. upon Business Division


Trade Name, Principal Businesses, Head Office, Representative, Paid-in Capital,
Total Asset and Financial Closing Date
Capcom Co., Ltd. expects that the business division will have no impact.


Impact on Financial Forecast
Capcom Co., Ltd. expects that the business division will have no material impact on
the company’s financial performance.

Disclaimer Regarding Forward-Looking Statements
Capcom sometimes provides projection as well as guidance concerning the future prospects in addition to profit estimates to be submitted to the Tokyo Stock Exchange, in order to assist investors and securities analysts to make their own estimates about the performance of Capcom.
Statements made on this press release with respect to Capcom plans, policy, estimates and strategies, and other matters that are not historical facts, are forward-looking expectations about the future performance of Capcom. These forward-looking expectations are based on the current assumptions of Capcom in light of the information currently available to and comprehended by Capcom. Please be aware that a number of important factors and uncertainties could cause actual results to differ materially from those mentioned in the forward-looking expectations.
Accordingly, when evaluating our performance or value as a going concern, you are requested not to rely on these projections entirely.
Factors and uncertainties that might affect performance of Capcom include, but are not limited to
(1) general economic conditions in the video game industry
(2) economic trend, such as consumer spending, capital expenditure, exchange rates, particularly between the yen and the U.S. dollar, euro, and other currencies, and the stock market.
(3) sudden change in social situation and occurrence of unexpected situation.

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