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Here, we are engaged in two sub-segments that utilize the contents from our home video games. The Pachinko & Pachislo (PS) sub-segment is involved in the development, manufacture and sales of frames and LCD devices for gaming machines as well as software. The Arcade Games Sales sub-segment develops, produces and sells arcade games for amusement facilities, creating synergy between businesses.
Net Sales/Operating Margins
Utilization of Non-Financial Capital
Market Trends and Operating Results for This Fiscal Year
Operating Income Increased 81.6% on Launch of Popular Pachislo Machines in the Midst of a Weak Market
In the previous fiscal year (ended March 31, 2016), the gaming machine market shrank to 982.7 billion yen (down 9.0% from the previous year). This was due to a temporary decline in the number of new machines launched resulting from changes to rules concerning pachislo machine model certification*1 by the Security Electronics and Communications Technology Association that went into effect in September 2014 in the pachislo market, as well as the sixth straight year of declines in the Pachinko market.
In the arcade game market, medal game and game card sales declined, resulting in the fourth consecutive year of negative growth, reaching 146.1 billion yen (down 3.3% from the previous year).
This year (ended March 31, 2017), the gaming machine market remained weak on the impact of pachislo machine operation rule changes. The arcade game machine market also continued to shrink due to a decline in the number of large cabinets sold, except for some hit products.
This fiscal year (ended March 31, 2017), in the Pachinko and Pachislo sub-segment, Monster Hunter Kyoryu Sensen was a big hit owing to synergies created with the home video game version. The result was sales of 37,000 units, driving sales beyond initial projections. In the Arcade Games Sales sub-segment, we focused on catalog sales and also released Mario Party Fushigi no Challenge World.
As a result, net sales were 16.856 billion yen (up 26.3% from the previous year) and operating income was 5.106 billion yen (up 81.6% from the previous year).
*1 Model certification: A public test to verify whether or not gaming machines are in accordance with regulations conducted by the Security Communications Association on behalf of public safety commissions in each of Japan’s administrative divisions.
*2 Changes to certification methods: Three self-imposed restraints implemented in stages. Up to November 2014 (1) guarantee a minimum (55%) ball dispensing ratio, (2) implement limits on penalty functions, and from December 2015 (3) implement functional limitations in sub-substrates.
Monster Hunter Kyoryu Sensen
Mario Party Fushigi no Challenge World
Licensed by Nintendo
© 2012 Nintendo © CAPCOM CO., LTD. 2016 ALL RIGHTS RESERVED
Market Forecast and Outlook for the Next Fiscal Year
Projecting an 8.0% Decrease in Net Sales and a 25.6% Decrease in Operating Income Due to an Uncertain Market and a Downturn from the Previous Year
In terms of the PS market outlook, the pachislo machine operation rules are scheduled to change in October 2017, so further restraints on gambling are expected.Moreover, legal regulations are also being considered as a measure against gambling addiction, thus the market environment is expected to become even more difficult. Additionally, we anticipate that the market conditions will continue to be difficult for pachinko machines as well, due to restrictions on ball dispensing as a measure against gambling addiction. Capcom aims to increase unit sales by continuing to (1) supply four proprietary cabinets per year, (2) secure a strong sales network and improve development quality through an alliance with major sales company Fields Corp., and (3) release proprietary pachislo machines not dependent on gambling and that feature a variety of clever video elements and playing styles. Next fiscal year, we are projecting sales of 50,000 units comprised of four machines, including Ace Attorney and Resident Evil Revelations.
In the Arcade Games Sales sub-segment, we expect a continued decline due to diminished motivation to invest among facility operators and a decrease in large products. Under these circumstances, we plan to release Monster Hunter: Medal Hunting G as a new machine utilizing our popular intellectual property.
However, taking into account the difficult PS market environment and a downturn from the previous year’s hit machines, we forecast lower sales and profits, with net sales of 15.5 billion yen (down 8.0% from the previous year) and operating income of 3.8 billion yen (down 25.6% from the previous year).
Resident Evil Revelations
Business Activity Achievements (PDF:2.72MB/12 pages)