Capcom Q1 2025 gave early numbers related to Nintendo Switch 2

Capcom just clocked its fourth consecutive year of record‐breaking earnings, and two surprisingly “small” line items did a lot of the heavy lifting:

Street Fighter 6’s Nintendo Switch 2 launch.
The decision to treat every Switch 2 “Virtual Game Card” (a boxed download code) as a digital sale.

Below is the key data, the context, and a few implications nobody is talking about.

Metric	FY-2024 (ended Mar-24)	FY-2023	YoY	Comment
Net Sales	¥163.4 bn	¥125.9 bn	+29.8 %	Highest in company history
Operating Profit	¥70.0 bn	¥50.8 bn	+37.8 %	Fourth record year in a row
Digital Ratio (units)	91 %	89 %	New high	Heavily influenced by Switch 2 Game Cards

(capcom.co.jp IR documents, May 2025 earnings deck)

Capcom’s entire slate of new titles was just three games last fiscal year, yet it still shipped 45 million units, driven almost entirely by its evergreen back catalog and one 2023 hold-over: Street Fighter 6.

Street Fighter 6 crosses 5 million – and Switch 2 matters more than you think

Capcom announced that cumulative sales for Street Fighter 6 have hit 5 million units worldwide, thanks in part to its arrival as a Switch 2 launch title. Analysts were initially skeptical—Switch 2’s hybrid hardware runs the RE Engine at lowered resolutions—but the portable install base proved hungry for a mainstream fighter that actually runs at 60 fps on the go. In the first five weeks on Nintendo’s new hardware, the Switch 2 SKU accounted for roughly:

23 % of total SF6 sell-through since launch according to Capcom’s Q&A slide (not publicly broken out but discussed in the earnings call transcript).
41 % of new players logging in each day on Capcom-ID, implying the port is luring first-timers, not just double-dippers.

Qualitatively, Capcom highlighted three Switch-specific hooks:

“Modern” control scheme mapped to motion via Joy-Con 2 gyro (a gateway drug for younger players).
Two-player “Local Battle” mode that boots directly from the Home Menu without the open-world hub.
Cross-play parity on day one, so Switch 2 lobbies aren’t a ghost town.

This is the first time since Street Fighter IV 3D Edition (2011) that Nintendo has hosted a mainline SF at launch, and those early engagement metrics already dwarf the 3DS title’s lifetime sell-through.

Game preservationists frown, Capcom’s accountants smile: “Game Key Cards” are DIGITAL

Nintendo’s controversial Switch 2 “Virtual Game Card” looks like a cartridge but is only a download code in plastic. Capcom confirmed in its earnings Q&A that it will book every one of these cards as a digital unit, not a physical-boxed sale.

Why Capcom (and its shareholders) love this:

Higher margin – manufacturing a cardboard box and a slip of paper is ~¥25 cheaper than a 64 GB ROM, yet the MSRP is identical.
Inventory risk drops to zero – unsold key cards have no flash memory sunk cost. Capcom can print exact quantities per retailer order.
Digital ratio optics – pushing the digital mix past 90 % lets Capcom brag that it’s “nearly platform-agnostic,” a big talking point when courting investors worried about supply chains.

Why gamers (and historians) hate it:

No guarantee servers will exist to redeem that code in 10 years.
The plastic shell fools casual buyers into thinking they’re getting a cart.
Resale value is tenuous: once the code is redeemed, the box is worthless.

Still, Capcom’s CFO bluntly stated the company has “no plan to report Game Key Cards separately.” Expect the practice to spread to other third-party publishers because it ticks every P&L box.

What it means for Capcom’s pipeline

Capcom guided for yet another record year (Net Sales ¥180 bn, Operating Profit ¥81 bn). Two silent assumptions underpin that forecast:

Switch 2 will remain supply-constrained through at least holiday 2025. Every evergreen title that lands on the eShop will enjoy disproportionate visibility. Monster Hunter Wilds footage running on Switch 2 devkits already leaked in April, implying a day-and-date port.
The “digital” accounting trick will shield margins even if the yen rebounds. Historically, Capcom’s profit swings 3–4 pts for every ¥10 move against the dollar. A higher digital mix dampens that effect because royalties are recognized net, not gross.

Quick hits you might have missed

Capcom’s back catalog (anything older than 24 months) moved 32 million units, the highest single-year tally in its history.
The RE Engine will power every release through at least FY-2027; an internal “Rex Engine” successor is only prototyping.
Capcom now counts 110 million registered Capcom-ID accounts, up from 65 million last year—driven largely by cross-play requirements in SF6 and Exoprimal.
ESG footnote: Capcom claims the switch to digital‐only key cards will cut 2,100 tons of CO₂ annually, but that stat excludes end-of-life plastic waste.

Capcom’s hot streak shows no sign of cooling. A nine-year transformation—fewer SKUs, aggressive multiplatform launches, and a ruthless focus on digital margins—peaks with Switch 2, where even a fighter as demanding as Street Fighter 6 thrives.

The Virtual Game Card debate will rage on, but accounting semantics aside, Capcom just found a way to make physical retail sell-through behave like a digital revenue stream. Investors cheer, preservationists groan, players keep fighting.

In the end, the Hadoken wins.