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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 > Top Management Message > CEO's Discussion on Summary of This Year's Performance and Progress Toward Medium- and Long-Term Business Goals > Medium-Term Business Goals and Progress

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Top Management Message
CEO's Discussion on Summary of This Year's Performance
and Progress Toward Medium- and Long-Term Business Goals

Medium-Term Business Goals and Progress

Q4Last year Capcom announced new mediumterm business goals. How much progress have you made and what is the strategy going forward?
A4We are on track, having already achieved 36% of sales and 35% of operating profit goals over the past two fiscal years. Our strategy is to promote the expansion and upgrade of our development lineup and the strengthening of our Online business.

1. Corporate Philosophy and the Direction of Management

Our corporate philosophy is to create "entertainment culture" through the development of highly creative software contents that "excite" our customers and "stimulate" their senses. To realize this, our world-class R&D capabilities will serve as the basis for delivering globally popular titles and a multitude of content brimming with creativity in the home video game area.

Furthermore, by developing our content further for various facets in a range of entertainment areas, we will be able to get more exposure and expand our fan base. We aim to become a comprehensive entertainment company that demonstrates steady growth and has a commanding presence in every business line in which we are involved. We will continue to pursue this ideal.

2. Capcom's 5-Year Management

First, I'd like to explain what we mean by Capcom's 5-year management.

The environment surrounding the contents industry is constantly changing, and for that reason We take a look at the state of the company every five years. Of course, looking at single-year, sales decrease compared to previous years, product sales often appear to fall short of forecasts, but the important thing is that you learn to see when times are changing.

We create a report with calculations in five-year increments then compare current numbers with numbers from five years ago and rates of change become apparent. When times are changing growth has stopped in one area, while changes are clearly taking place in another area where new elements are emerging, indicating new opportunities. In this way, five years is a very important time frame for Capcom management.

3. Medium-Term Business Goals and Progress

Capcom's medium-term business goals for the five years from the fiscal year ended March 31, 2011 through the fiscal year ending March 31, 2015 are (1) operating margin of 15% or higher and (2) net sales of 500,000 million yen (up 29.3% compared to past five years) and operating income of 75,000 million yen (up 51.5% compared to past five years).

At present, in terms of progress over the past two fiscal years, we are on track with cumulative sales of 179,700 million yen (36% achieved), operating profit of 26,600 million yen (35% achieved) and an operation margin of 14.8%.

Medium-Term Business Goals (for the five years ending 2015)

Medium-Term Business Goals Progress

4. Medium- and Long-Term Strategies

Our growth strategy of expanding and upgrading our development lineup while strengthening the Online business is the key to achieving our medium- term business goals.

First of all, expanding and upgrading our traditional home video game development lineup by shortening the series title sales cycle and establishing new titles, we will increase Single Content Multiple Usage development of popular content.

We will also strengthen the Online business, which has strong potential for growth. Specifically, we will (1) increase the number of mobile and PC social games, (2) enhance downloadable content for home video games, (3) promote PC browser games in our traditional areas of business, Japan, North America, Europe and Asia, as well as South America and Eastern Europe as a means of developing Online business by region.

To this end, next fiscal year, we will increase Consumer, Mobile and PC Online development staff to 100 people each.

As a result, we aim for sales in the highly profitable Online business to increase from 15,700 million yen at the end of the fiscal year ended March 31, 2012 to 30,000 million yen in the fiscal year ending March 31, 2015. By increasing the Online business sales composition, we will gradually improve the consolidated earnings operating margin above 15%.

Furthermore, Capcom will make an effort to stabilize earnings by placing mature businesses on the periphery and investing 10% of management resources into profit-maximizing Single Content Multiple Usage developments to seize diverse profit opportunities.

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