Here you can find an itemized listing of our directors' fundamental management policies, which include our basic corporate philosophy, management performance metrics, dividend policy, mid- to long-term strategies and challenges faced by management.
1. Fundamental management policy
We are creators of entertainment culture who aim to develop software content that excites and stimulates the senses. Management's criterion is mutual prosperity; we work to build trust and improve satisfaction with our stakeholders.
2. Key performance indicators
Capcom's objective is to enhance corporate value by expanding our businesses. We measure performance from a capital efficiency perspective and strive to enhance corporate value by improving return on equity (ROE). At the same time, we focus on cash flow management and securing profits.
3. Medium and long-term management strategies
Establishing a corporate structure capable of securing stable profits regardless of changes in the environment is a critical challenge facing management in promoting growth. As such, we aim to improve business performance via the following measures.
- (1) Promoting of the Single Content Multiple Usage Strategy
More than 70 of our titles have sales in excess of one million units worldwide, including games from the Resident Evil, Monster Hunter and Street Fighter series. With these, we have steadily grown our fan base while accumulating a vast portfolio of content assets.
Because of this, we can leverage high-profile game characters and appeal with the "Made in Capcom" concept to increase penetration of the Capcom brand. We promote the Single Content Multiple Usage strategy to create synergies and license our popular content across the globe. This includes movies, animation, publishing, the theater, toys, and food & beverages, which allows us to build a value chain.
- (2) Expansion of Digital Download Sales
Within the sphere of home video game consoles, the market for non-packaged games, such as full-game and add-on downloads, has steadily grown in recent years. This is especially true in leading markets such as North America and Europe, and has been driven by the establishment of better network infrastructure and online monetization models. We remain focused on expanding digital download sales and being flexible in the face of evolving distribution methods, and are committed to growing revenue by supporting business expansion with the three pillars of development, marketing and sales.
- (3) Strengthening Mobile Contents
Within our Mobile Contents business, we will sell and distribute in-demand titles that leverage our vast library of popular content. Further, we will strengthen this business by better developing synergies between our content and game operations (which include reflecting detailed analysis of player behavior into content updates we provide).
- (4) Commitment to the Pachinko & Pachislo business
Although the Pachinko & Pachislo Business faces a certain level of uncertainty due to revisions in pachislo model certification methods and stronger regulations, we are developing this segment to be an important source of revenue through synergies with popular IPs. Going forward, we will focus on growing business opportunities through strategic expansion, which includes faster development of machines compliant with new standards.
- (5) Growing Overseas Sales
Given the maturity of the domestic market as well as demographic changes in Japan, exploring large overseas markets is crucial in promoting our growth strategy. Capcom is a world-leading content holder and possesses numerous brands that are popular overseas, including the Resident Evil and Street Fighter series, both of which have been made into Hollywood movies. Consequently, the Company is proactively targeting the European, North American and Asian markets to increase revenues.
4. Our business environment and issues to be addressed by the Company
The market environment in our industry is changing drastically. Drivers of this include the launch of the new Nintendo Switch home console in March 2017, the rise of new business areas utilizing virtual reality (VR) and augmented reality (AR), as well as greater adoption of online games and growth in mobile contents.
The following are major issues to be addressed by Capcom, with consideration given to future market trends and the business environments in which we operate.
- (1) Strengthening priority strategic divisions
In order to ensure our competitive advantage, in addition to our core business of home video game software we will focus management resources into mobile contents development and marketing.
- (2) Expanding business areas
We are committed to expanding our contents business in order to adapt to changes in the management environment and grow our areas of operation. This includes distributing smartphone, tablet and other non-home console games, as well as strengthening our Pachinko & Pachislo business.
Additionally, we are working to grow digital download sales in-step with the increasing diversification of distribution channels.
- (3) Promotion of overseas business
As the domestic Japanese market matures, it is essential that we focus on future business growth in overseas markets. To this end, we are engaged in strategic global expansion, aided by overseas subsidiaries such as CAPCOM U.S.A., INC., a core subsidiary, to develop new markets as well as further cultivate existing ones.
- (4) Selection and concentration of business investments
As part of efficiently using development resources, we enhance corporate value through a process of selecting and concentrating resources for business investment. This entails investing into growth areas while withdrawing from unprofitable areas in order to better exercise Capcom's comprehensive strengths. At the same time, we are reinvigorating our businesses with quick management and a clear vision.
- (5) Strengthening corporate structure
We are building a corporate structure to fortify our revenue base, while enhancing management efficiency and flexibility.
As part of these efforts, we are precisely coordinating strategic restructuring of Capcom's operations and finance across all domestic and overseas affiliates to improve management quality.