Capcom reported financial results for its 2012 fiscal year today, posting a significant drop in net income due to restructuring costs as the company shifts focus for a future in which it expects development costs to rise on next-generation consoles.
The Japanese publisher's 2012 fiscal year ran from April 1, 2012, through March 31, 2013.
Capcom tallied net sales of 94.08 billion yen ($953.2 million) for the full year, a 14.6 percent jump from the 82.07 billion yen ($831.3 million) it recorded in the 2011 fiscal year. But net income dropped by 55.8 percent from 6.72 billion yen ($68.1 million) in fiscal 2011 to 2.97 billion yen ($30.1 million) this past year.
The major drop in Capcom's net income resulted largely from a "special loss" of 6.95 billion yen ($70.4 million) associated with a reorganization of its development structure and a revision of its business strategy. The company announced that program last month, saying it was canceling multiple unannounced games that were being developed internally and at overseas studios because they were "no [longer] compatible with the current business strategy."
Capcom also commented on future prospects. The company will strengthen its focus on console software, which is its key business segment, because it expects "an increasingly mature market of home video games" in the near future. Capcom also believes the next few months will see few new games as the industry prepares for the full launch of next-generation consoles, and that development costs will "soar" on those new platforms.
The publisher hopes to take advantage of that market with Lost Planet 3 worldwide and Monster Hunter 4 in Japan, and cut costs by moving development in-house and streamlining its own business. That includes "corporate reforms" of important subsidiaries, including the company's U.S. branch. In addition, Capcom plans to expand its distribution operations in southeast Asia, a region in which the company projects "rapid growth" fostered by the increased spread of smartphones.
Capcom expects development costs to "soar"
According to Capcom, Resident Evil 6 initially performed well at retail but sales soon plateaued. In December, the company revised its sales forecast downward from 7 million to 5 million copies, and again last month from 5 million to 4.9 million copies.
That was offset somewhat by Dragon's Dogma, which "became a greater-than-expected hit product" in the highly profitable Japanese market; the company has sold more than 1 million copies worldwide. Capcom did not announce specific sales numbers for DmC: Devil May Cry, but last month the company revised its forecast from 1.2 million to 1.15 million copies; it had previously lowered its projection in December, from 2 million to 1.2 million copies.