Business Performance (Japan GAAP)

Here we breakdown our consolidated business results for fiscal year ended March 31, 2023 with graphs and diagrams.

During the fiscal year ended March 31, 2023, the Company actively pursued growth investments focused on enhancing digital sales to respond to the continuously evolving and expanding global market. Moreover, with the aim of enhancing corporate value and in order to further its steady, sustainable growth, the Company implemented specific policies for its Human Resources investment strategy, which is one of management’s priorities. These included reorganizing its Human Resources operations and establishing the new post of Chief Human Resources Officer (CHO), in addition to revising its compensation system to increase average annual compensation of its permanent employees by 30% while also introducing a stock-based compensation plan for permanent employees in Japan utilizing 4 million shares of treasury stock.

With this management policy, the Company increased its sales volume in the global market through the launch of a major new title in its flagship series and the active promotion of digital catalog titles sales in its core Digital Contents business. As a result, the sales volume of the Digital Contents business in the fiscal year under review was 41.7 million units, exceeding the 32.6 million units in the previous fiscal year to significantly contribute to the enhancement of the Company’s value. The Company also reinforced the use of its major brands in films, licensed products, and in eSports to further enhance the brand strength of its intellectual property. Additionally, sales were boosted by promoting efficient store operations and opening new stores in new business categories in the Arcade Operations business, and with sales promotions that effectively used the Company’s popular intellectual property in the Amusement Equipments business.

As a result, for the fiscal year ended March 31, 2023, consolidated net sales were 125,930 million yen (up 14.4% from the previous fiscal year). In terms of profitability, operating income was 50,812 million yen (up 18.4% from the previous fiscal year,), ordinary income was 51,369 million yen (up 15.9% from the previous fiscal year), and net income attributable to the owners of the parent was 36,737 million yen (up 12.9% from the previous fiscal year), marking 10 consecutive fiscal years of operating income growth.

In this business segment, Monster Hunter Rise: Sunbreak (for Nintendo Switch, PC), which was released in June 2022, garnered positive reviews globally for its quicker action and other features, and secured steady popularity with ongoing measures including free content updates, leading the game to achieve sales of 5.45 million units, which contributed significantly to earnings.

In addition, Resident Evil 4 (for PlayStation 5, PlayStation 4, Xbox Series X|S, PC), released in March 2023, continued to receive favorable market responses owing to its reimagining of the original story and use of cutting-edge graphics technology, leading the game to achieve sales of 3.75 million units, which contributed significantly to increasing sales.

As for catalog titles, the Company conducted proactive promotional campaigns to gain wider recognition for its intellectual property and acquire new fans. This, in conjunction with the synergetic effects of ongoing releases of new titles and pricing strategies, helped boost sales, mainly for series titles, such as Monster Hunter Rise, Monster Hunter: World, Devil May Cry 5, and Resident Evil Village. As a result, the sales volume of catalog titles was 29.3 million units, exceeding the 24 million units in the previous fiscal year and boosting sales.

The resulting net sales were 98,158 million yen (up 12.1% from the previous fiscal year) and operating income was 53,504 million yen (up 18.0% from the previous fiscal year).

In this business segment, both sales and profits increased compared to the previous fiscal year. This was due to a recovery in the number of customers visiting stores following the complete lifting of the semi-state of emergency COVID-19 measures in March last year, as well as the effect of efficient operations at existing stores and the opening of new stores in new business categories in an effort to expand earnings.

New openings during the fiscal year under review included the comprehensive amusement facility Miraino at Aeon Mall in Toki (Gifu Prefecture), which includes a Crazy Banet attraction, in October 2022; the Capcom Store & Cafe Umeda (Osaka Prefecture), which offers merchandise featuring the Company’s popular characters and features a café, in November 2022; and Miraino at Aeon Mall in Toyokawa (Aichi Prefecture) in March 2023. Under our scrap-and-build store opening strategy and community-based store operation strategy, five new stores were opened while two stores were closed, taking the total number of stores to 45.

The resulting net sales were 15,609 million yen (up 25.8% from the previous fiscal year) and operating income was 1,227 million yen (up 88.0% from the previous fiscal year).

In this business segment the environment began to show signs of improvement in some parts of the market. In addition to Shin Onimusha 2, launched in August 2022, selling 15,000 units, Resident Evil RE:2, launched in September 2022, sold 15,000 units and Monster Hunter World: Iceborne, launched in January 2023, sold 12,000 units. These titles garnered positive reviews from the market, commencing their operations on a high note, and leading to a total of 5 models selling 44,000 units altogether during the fiscal year under review.

The resulting net sales were 7,801 million yen (up 35.7% from the previous fiscal year) and operating income was 3,433 million yen (up 46.2% from the previous fiscal year), owing to a diversified business model.

In Other Businesses, the Company established a movie production subsidiary in the US dedicated to adapting its major IP into movies and other visual media while also signing a deal to create a live action film for Street Fighter. Additionally, the Company continued to focus on developing character merchandise for new and popular titles in its licensing business.

The Company has also been pursuing the expansion of the global esports fan base. In addition to adding the new World Warrior category to the Capcom Pro Tour 2022 and holding online events for the tournament around the world, the Company held Street Fighter League: Pro-JP 2022, Capcom Cup IX and Street Fighter League World Championship 2022. The Company also promoted Street Fighter 6, which is scheduled to be launched in June 2023, in conjunction with the promotion of these competitions

The resulting net sales were 4,360 million yen (down 0.1% from the previous fiscal year) and operating income was 1,433 million yen (down 5.5% from the previous fiscal year) due to up-front investments mainly in eSports.

Total assets as of the end of the fiscal year ended March 31, 2023, increased by 29,999 million yen from the end of the previous fiscal year to 217,365 million yen. The primary increases were 17,576 million yen in accounts receivable – trade, 7,317 million yen in work in progress for game software, and 3,717 million yen in land.

Total liabilities as of the end of the fiscal year ended March 31, 2023, increased by 15,346 million yen from the end of the previous fiscal year to 56,236 million yen. The primary increases were 6,134 million yen in accrued income taxes, 3,591 million yen in short-term borrowings, and 3,000 million yen in current portion of long-term borrowings.

Net assets as of the end of the fiscal year ended March 31, 2023, increased by 14,653 million yen from the end of the previous fiscal year to 161,129 million yen. The primary increases were 36,737 million yen in net income attributable to owners of the parent, and 2,442 million yen in cumulative translation adjustments. The primary decreases were 13,645 million yen in treasury stock acquired through a tender offer, and 10,879 million yen in dividends from retained earnings.

Cash and cash equivalents as of the end of the fiscal year ended March 31, 2023, decreased by 6,165 million yen from the end of the previous fiscal year to 89,470 million yen.

Please refer to "Cash Flows."