Our Strategy for Growth
Our Strength and Strategy for Growth
Development Capabilities as Competitive Advantage for Global Success
In the contents industry, generation of new content is the source of a company's competitiveness. One of the reasons Capcom has continued to grow is due to our core Consumer Online Games business' "ability to provide superior content" through the utilization of strong development capabilities for creating a large amount of original game content.
Capcom's superior development capabilities maintain "developer creativity" and an "organizational structure that enables developers to hone their skills", two factors successfully realized through the next several structural reforms.
Extensive Collection of World-Class Leading Content
The originality of content created by Capcom using the world-class development capability is, naturally, held in high esteem by users. We attempt to secure stable earnings by creating new million-seller titles once every two or three years, and introducing the sequels of these titles regularly, such as "Street Fighter" and "Resident Evil", which have sold over one million copies worldwide. We possess the most popular contents among Japanese game software manufactures, and development capabilities continue to be one of our biggest strengths.
Furthermore, possessing scores of content with universal market appeal enables us to develop our Single Content Multiple Usage strategy worldwide. Based on our success in the Consumer Online Games business, we have engaged in the multiple development of popular content for various forms of media which has led to success in other businesses, and we are now creating a business model to realize multiple profits in the contents market as well.
Three Growth Strategies For Achieving Medium-Term Business Goals
As a result of last fiscal year's platform expansion, the game market was worth 52.9 billion dollars in 2011 (up 19.1% from the previous year). The market is expected to expand significantly, reaching 79.9 billion dollars in 2016.
The online game market expanded rapidly to 30.4 billion dollars (up 44.8% from the previous year) in 2011. Reasons for this include, in accordance with advances in broadband networks, (1) high-speed PC and mobile phone communications, (2) the spread of smartphones and tablets, (3) the expansion of social networking services (SNS) and (4) home video game console online functionality that enables online game platform connecting high-performance devices such as PC, smartphone, iPad and a wide range of other consoles to the home video game console. As a result, the online game market is expected to grow steadily to 58.2 billion dollars in 2016 (up 91.4% from 2011).
The traditional home video game market was worth 22.5 billion dollars in 2011 (down 3.8% from the previous year). The market is expected to remain flat, growing slightly to 21.7 billion dollars in 2016 (down 3.6% from 2011). Despite this outlook, we nevertheless foresee maintaining these operations as a primary point in the game market five years hence.
In response to the changing market environment, and to achieve our medium-term business goals (please see "CEO's Discussion on the Summary of This Year's Performance and Medium- and Long-Term Business Goals", Q4), Capcom has outlined three major strategies for growth, which are: "strengthening of our Online business", "expanding our line-up of games under development" and the "expansion of Single Content Multiple Usage", and will allocate 90% of management resources to the Consumer Online Games and Mobile Contents businesses promoting these strategies.
One factor behind the forecast for Capcom's best performance ever next fiscal year (ending March 2013) is that our growth strategy is already beginning to achieve success. Also, to further ensure the achievement of medium-term business goals, we will expand the platform and territory of the Online Games business and increase share in the mobile and PC online markets. Additionally, we will attempt to shorten the sales cycle of major titles through development staff enhancements and design process efficiency, creating a structure to deliver stable earnings every year. Furthermore, we will continue to focus efforts on the development of Single Content Multiple Usage, which is at the core of our business development.
On the following pages, I will explain each of our three growth strategies.