Capcom ended 2024 with a sudden stop on positive quarters

For those who has been following corporate news and mainly from Capcom, the Japanese veteran has been nailing good numbers in each earning report from the past 2 years, but of course and unfortunately, some things cannot last forever and this is what the latest earning can tell us.

Capcom released its consolidated financial results for the 9 months ending December 31, 2024 for its Q3 for the fiscal year 2024. The report provides a comprehensive overview of the company’s performance and future outlook, revealing both challenges and opportunities ahead.

The creators of franchise like Megaman, Resident Evil, Street Fighter and other classics, reported net sales of 88.853 billion yen or around $573.08 million, a decrease of 16.3% compared to the same period last year. The operating income also saw a significant decline, dropping by 33.4% to 23.066 billion yen or around $149.84 million.

Despite these decreases, Capcom remains optimistic about its future performance, citing several key factors contributing to its resilience.

The Digital Contents segment, which includes home video games, experienced a slight decline in unit sales for new titles. However, the performance of catalog titles (excluding those released in the previous fiscal year) has steadily increased year over year2. The Arcade Operations business saw growth in existing stores, which were utilized as cooling shelters during hot weather, resulting in increased revenue and profit. The Amusement Equipments business launched two new models and sold 17,000 units as planned, benefiting from cost reductions through the procurement of common components.

Future Outlook

Capcom has maintained its full-year forecast, with expectations of increased sales and profit due to digital sales growth in the Consumer sub-segment. The company forecasts an earnings per share of ¥109.98 (US’ 71 cents) and a dividend of ¥36 (US’ 23 cents) for the fiscal year ending March 31, 2025. Capcom aims for 12 consecutive years of operating profit growth, driven by the stability of Digital Contents and strong performance in the Amusement Businesses.

Key Takeaways

1. Resilience Amid Challenges: Despite a decrease in net sales and operating income, Capcom remains optimistic about its future performance.
2. Growth in Digital Sales: The company expects increased sales and profit due to digital sales growth in the Consumer sub-segment.
3. Strong Performance in Amusement Businesses: The Arcade Operations and Amusement Equipments businesses have shown growth and resilience.

Capcom’s latest earnings report highlights the company’s ability to navigate challenges and capitalize on opportunities in the ever-evolving video game industry. With a strong focus on digital sales and continued innovation in its business segments, Capcom is well-positioned for future growth.