Business Performance (Japan GAAP)

Here we breakdown our consolidated business results for the six months ended September 30, 2024 with graphs and diagrams.

In the six months ended September 30, 2024, Capcom Co., Ltd. (the "Company," together with its subsidiaries, the "Group") actively pursued investments for growth focused on the ongoing enhancement of digital sales in order to further evolve and expand within the global market. In addition, as part of its human resources investment strategy, which is one of the Group’s top priorities, the Company continued to invest in human capital toward securing and fostering human resources who will support the future, with the aim of stable and sustainable growth. With these kinds of management policies, the Company has been working to continue strengthening its development and technological capabilities, including through the acquisition of a 3DCG production company with strengths in animation production for consumer game development as a subsidiary. Furthermore, with regard to the remuneration system for directors, in order to link remuneration for directors more closely to business performance and maintain a common point of view with shareholders, the Company implemented measures aimed at continuously increasing corporate value over the medium to long term, such as by introducing a performance-linked stock remuneration system.

Regarding business conditions, during the six months ended September 30, 2024, in addition to the release of popular series titles, sales were dominated by catalog sales of major titles released in previous fiscal years in the core Digital Contents business due to the timing of new title sales in the fiscal year under review being weighted to the second half of the fiscal year. As a result, the Company sold 246 titles in 220 countries and regions, contributing to enhancing the value of the Company’s brands and achieving unit sales of 20.02 million units. While down from the 22.6 million units in the same period of the previous fiscal year when Street Fighter 6 was released, thanks to efforts to promote digital sales, catalog title unit sales were 18.95 million units, up from 17.6 million units in the same period of the previous fiscal year.

The Company also worked to increase earnings through efficient operation of amusement arcades and the promotion of store openings in new store formats in Arcade Operations, as well as through the continued introduction of smart pachislo machines and the utilization of the Group’s popular intellectual properties (IPs) in Amusement Equipments. In addition to such activities, the Company utilized its highly popular brands in film and television productions, licensed merchandise, and esports.

As a result, earnings for the six months ended September 30, 2024 made favorable progress, with consolidated net sales of 56,402 million yen (down 24.7% year-over-year), operating income of 20,726 million yen (down 38.7% year-over-year), ordinary income of 20,706 million yen (down 42.7% year-over-year), and net income attributable to owners of the parent of 15,275 million yen (down 39.6% year-over-year).

In the Digital Contents business, Kunitsu-Gami: Path of the Goddess (for Xbox Series X|S, Xbox One, PlayStation 5, PlayStation 4, and PC), a new IP, was released in July and received critical acclaim. In addition, Ace Attorney Investigations Collection (for Nintendo Switch, PlayStation 4, Xbox One, and PC), Dead Rising Deluxe Remaster (for PlayStation 5, Xbox Series X|S, and PC), and MARVEL vs. CAPCOM Fighting Collection: Arcade Classics (for Nintendo Switch, PlayStation 4, and PC) were released in September and garnered solid support from series fans.

Regarding catalog titles, sales of Monster Hunter World: Iceborne and Monster Hunter Rise continued to grow, contributing to the improvement of the brand, with cumulative sales of the series surpassing 100 million units worldwide, in the lead-up to the release of the latest title, Monster Hunter Wilds, in February 2025. In addition, the Company conducted proactive promotional campaigns to gain wider recognition of its IPs and acquire new fans, focusing primarily on series title sales, such as Resident Evil 4 and Dragon’s Dogma 2. Furthermore, the Company pursued wider brand recognition and an expanded user base for Street Fighter 6, the major new title in our flagship series released in the previous fiscal year, by strengthening collaboration with esports activities.

Consequently, progress toward achieving the full-year plan was generally in line with the plan, though sales volume for the six months ended September 30, 2024, decreased compared with the same period of the previous fiscal year when Street Fighter 6 was released.

In Mobile Contents, cumulative downloads of Monster Hunter Now, which was released in the previous fiscal year, exceeded 15 million, continuing to gain in popularity among many users and contribute to greater brand penetration. In addition, Monster Hunter Puzzles: Felyne Isles (for iOS and Android), released globally in June, surpassed 1 million cumulative downloads.

Furthermore, Monster Hunter Wilds won the most honors at the Gamescom Awards 2024 during Gamescom, held in August in Germany, one of the largest European game award events, taking home a total of four awards. Additionally, the Company’s booth at Tokyo Game Show 2024, held in September, drew large crowds of people looking to try demos of upcoming titles. The Japan Game Awards: 2024 was also held during the show, at which Street Fighter 6 won an Award for Excellence and Special Award, while Dragon’s Dogma 2 won an Award for Excellence, all in the Games of the Year Division. At the same time, Monster Hunter Wilds won an Award in the Future Division, providing momentum for future sales.

As a result, the segment earned net sales of 39,775 million yen (down 35.1% year on year), and operating income of 20,640 million yen (down 40.2% year on year).

In Arcade Operations, in addition to increased tourism after the COVID-19 pandemic, consumers have returned to their previous lifestyles. As such, the Company strived to increase the number of visitors while improving earnings through efficient operation of existing stores and store openings in new store formats. Moreover, the Company worked to maximize the appeal of our brick-and-mortar stores by holding events and creating synergies with other businesses.

During the six months ended September 30, 2024, the Company opened Plaza Capcom Oyabe (Toyama Prefecture) in April, and opened a new area at Plaza Capcom Ikebukuro (Tokyo) in May, bringing the total number of stores to 51.

As a result, the segment earned net sales of 10,991 million yen (up 19.9% year on year), and operating income of 1,667 million yen (up 47.8% year on year).

In Amusement Equipments, the pachislo market remained solid, driven by customer demand for smart pachislo machines. Sales of 5 thousand units of the new smart pachislo model Street Fighter V Chosensha no Michi, which was released in June, and 11 thousand units of the new smart pachislo model Onimusha 3, which began operating in halls on October 6th, contributed to earnings. Sales of Strike the Blood, which was released in March, also contributed.

As a result, the segment earned net sales of 3,176 million yen (up 22.2% year on year), and operating income of 1,587 million yen (down 10.9% year on year).

In Other Businesses, the Company bolstered its structure by integrating internal organizations to accelerate collaboration between esports and the licensing business, with the aim of improving the brand value of its titles.

With this structure in place, the Company utilized its popular title Street Fighter 6 and kicked off the global Capcom Pro Tour 2024 in June, while also holding the team-league Street Fighter League: Pro-JP 2024 in Japan from August, leading to heated battles unfolding across these various competitions. Moreover, the Company worked to further promote its esports tournaments, announcing that, continuing from the previous season, it will offer a grand prize of $1 million USD at Capcom Cup 11, the championship tournament for the Capcom Pro Tour 2024. In addition to expanding the esports fan base on a global scale, the Company will also hold the championship tournaments for the 2024 season at the Ryogoku Kokugikan arena in Japan to contribute to the domestic spread of esports as well.

Additionally, the Company focused on promoting various events and collaborations in conjunction with the 20th anniversary of the Monster Hunter series, as well as focusing on movie and television adaptations of its major IPs and developing character merchandise for its popular titles.

As a result, the segment earned net sales of 2,459 million yen (up 30.1% year on year), and operating income of 1,195 million yen (up 94.7% year on year).

Total assets as of the end of the second quarter increased by 2,305 million yen from the end of the previous fiscal year to 245,782 million yen. The primary increases were 10,228 million yen in work in progress for game software, 1,272 million yen in raw materials and supplies, 806 million yen in cash on hand and in banks, as well as 735 million yen in current assets, other and 493 million yen in merchandise and finished goods due to an increase in prepaid expenses, etc. The primary decrease was 11,624 million yen in accounts receivable – trade.

Total liabilities as of the end of the second quarter decreased by 1,520 million yen from the end of the previous fiscal year to 46,874 million yen. The primary increases were 2,660 million yen in notes and accounts payable – trade, and 1,528 million yen in current liabilities, other, due to an increase in accrued expenses, etc. The primary decrease was 5,754 million yen in accrued bonuses.

Net assets as of the end of the second quarter increased by 3,825 million yen from the end of the previous fiscal year to 198,907 million yen. The primary increase was 15,275 million yen in net income attributable to owners of the parent. The primary decreases were 9,163 million yen in dividends from retained earnings, and 2,309 million yen in cumulative translation adjustments.

The forecast for the consolidated business results for the current fiscal year ending March 31, 2025, remains the same as what was projected at the financial results announcement on May 9, 2024.