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Online Annual Report 2012

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IR Top Page > IR Presentation Materials > Annual Report 2012 > Online Annual Report 2012 > Our Strategy for Growth > Growth Strategy 1: Market Strategy

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Our Strategy for Growth
Growth Strategy 1: Market Strategy

Strengthening Online Businesses Worldwide, the Pillar of Growth

Aiming for Online Business Sales of 30,000 Million Yen in 2015

Here, I'd like to explain the "strengthening of the Online business", the first of our growth strategies for achieving medium-term business goals.

Online business measures include (1) increasing the number of mobile and PC social games, (2) enhancing downloadable content (DLC) for home video games, (3) developing PC online games by region and (4) enhancing development staff. By implementing these measures, we will grow Online business sales to 23,000 million yen (up 46.5% from the previous year) in the fiscal year ending March 2013 and 30,000 million by the fiscal year ending March 2015.

Online Market and Capcom Online Sales Growth Rate Forecast

Capcom Online Strategy (Matrix)

Measure 1 Increase Number of Mobile and PC Social Games

This measure has three points. First, expand domestic market share by increasing social game titles making use of the "Capcom brand". Second, acquire a wide range of customers by strengthening "Beeline brand"management structure and releasing major titles. Third, introduce a new PC browser game into the market. These three actions will intensify connections with users and bring in new customers.

"Capcom brand" strategy, with regard to the first point in particular, is to attract mobile lights users to home video games and home video game core users to mobile content with the development of social games utilizing the brand power of popular Capcom titles created in Japan. Furthermore, we will actively provide content by significantly increasing the number of social games released through alliances with proven outside development companies such as gumi Inc. and gloops, Inc., while developing GREE and other domestic platforms for overseas distribution.

The second point is that we will continue to strengthen social games for smartphones with the "Beeline brand" strategy. The reason for creating a separate brand stems from Capcom brand games having an image of difficulty and complexity about them, creating a barrier that would prevent most light users who normally don't play games from purchasing a casual download. The appeal of a new brand is more effective. Furthermore, development facilities in North America, Europe and Japan are developing social games that incorporate distinctive characteristics to acquire users in developing regions where home video game consoles have yet to be adopted. With major title "Smurfs' Village" ranking as the "top-selling app" in the App Store sales rankings in 80 countries and downloads of "Beeline" titles in Japan and overseas in excess of 56 million, we are already realizing the achievement of our growth strategy. Moreover, with 43% men, 57% women and approximately 1.5 million active players over 50, "Beeline" user composition is extremely well-balanced. In terms of the overseas title lineup, next fiscal year (ending March 2013), Beeline will release 15 titles, including "Shrek's Fairytale Kingdom" featuring popular Western character from another company "Shrek", accelerating growth with Mobile Contents sales of 12,000 million yen (up 90.5% from the previous year).

The third point involves establishing a new revenue source with the release of PC browser games "Onimusha Soul" and "Browser Sengoku BASARA".

Mobile Contents and Two Brand Strategy

Measure 2 Expand Downloadable Content for Home Video Games

All major titles will be put online and made available for download. By introducing a system that enables users to play one another across the globe, and by continually introducing additional downloadable content(DLC), user playing time will increase, and we can acquire new users who cross over from package users while receiving addition revenue in the form of additional item purchases. Also, we will promote sales of downloads of past popular video games through the effective use of our extensive collection of titles to achieve sales of 3,500 million yen (up 25.0% from the previous year) next fiscal year.

Measure 3 Regional Development of PC Online Games

Capcom will develop PC online games in Asia and South America, utilizing popular home video games with a global appeal. At present, we distribute "Monster Hunter Frontier Online" (MHF) in Japan with an eye towards development in China, soon to be the world's largest online market, expanding distribution regions by region. Also, to avoid country risks and acquire management experience in these regions, we will develop business partnerships with leading local companies. At the same time, while releasing new titles in Japan, we will make regular major updates to MHF to maintain user interest and improve earnings stability. We forecast sales in the next fiscal year (ending March 2013) of 7,500 million yen (up 13.6% from the previous year).

Measure 4 Strengthening Development Structure and Increasing Development Staff

In this second phase of structural reforms, Capcom Integrated its vertically segmented consumer, mobile and online development structures, switching to a new multi-platform development system compatible with all types of hardware. Additionally, we integrated global organizational functions with new facilities and absorption of organizations around social games.

Moreover, we will increase development staff and provide in-house training. We plan on hiring 300 new employees, mainly new graduates, next fiscal year to implement above measures 1-3.

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