• December 22, 2009
  • Company Name: Capcom Co., Ltd.
    Representative: Haruhiro Tsujimoto, President and COO
    (Code No. 9697 Tokyo-Osaka Stock Exchange)
    Contact: Public Relations and Investor Relations Office
    Phone number: +81-6-6920-3623

Capcom Announces Special Loss and Forecast Revision

Capcom Co., Ltd.(Capcom) announces that on December 22, 2009, the board of directors approved a resolution to revise the forecast for consolidated sales and earnings that was announced on May 8, 2009 for the fiscal year ending on March 31, 2010. In addition, Capcom plans to post a special loss as described below.

1. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2010
(From April 1, 2009 to March 31, 2010)

(Millions of Yen)
  Net Sales Operating Income Ordinary Income Net Income
Previous Forecast (A) 95,000 15,500 14,700 8,500
Revised Forecast (B) 65,000 6,000 5,000 2,000
Change (B) – (A) (30,000) (9,500) (9,700) (6,500)
Change (Percentage) (31.6%) (61.3%) (66.0%) (76.5%)
(For Reference) Actual ended March 31, 2009 91,878 14,618 13,808 8,063

2. Reason for the revision

In the home video game business, Capcom has made the strategic decision to postpone the launch of titles that were scheduled for the 4th quarter of the current fiscal year.

This decision is in response to rapid changes in market conditions caused primarily by the 4th quarter introduction by competitors of a large number of new games.

Capcom believes that delaying the launches of its own titles will avoid competing with these new games, maximize the sales volume of the new Capcom games, and preserve the value of the brands associated with these games.

Capcom has therefore significantly reduced its consolidated sales and earnings forecasts due to this decision and to the above special loss by gaming machine.

The decline in net income has been reduced by the refund of about 1.8 billion yen of taxes paid in prior years due to a mutual agreement with U.S. tax authorities concerning a revision disposition based on the transfer pricing tax system.

3. Special loss

The Capcom Group is in the process of restructuring its businesses in order to focus resources on strategic activities and operate with greater efficiency.

A thorough assessment of the profitability of the group’s business units has been performed.

As part of this assessment, a reexamination of development programs in the pachinko and pachislo business and other businesses resulted in the application of strict valuations for certain assets.

As a result, Capcom expects to post a special loss of approximately 4.5 billion yen for business restructuring expenses in the 3rd quarter of the fiscal year ending on March 31, 2010.

* This forecast is based on information that was available on the announcement date of this release. Actual results may differ from this forecast for a number of reasons.