Capcom cuts profit forecast in half due to "rapid changes" in the games market

Dead Rising, Resident Evil publisher halves earnings forecast and now expects to post a "special loss" for the year.

Dead Rising 3

Dead Rising and Resident Evil publisher Capcom announced today that it had slashed its profit forecast for the year ending March 31 (today) by a whopping 51.5 percent due to "rapid changes" in the games market. The Japanese publisher previously expected to post a profit of ¥6.8 billion yen ($66 million) but is now anticipating net income of ¥3.3 billion ($31.9 million), a dropoff of ¥3.5 billion ($33.9 million).

Capcom's expectation to post a "special loss" for the year primarily came down to the company's struggles in the mobile business, the publisher said.

"Due to rapid changes taking place in the market for games, Capcom is building a sound base for earnings by reorganizing the product development framework and improving development processes. These are two core elements of the company's operations. The objective of these activities is to earn consistent earnings in each fiscal year. However, these initiatives have not yet started to produce benefits mainly in the Mobile Contents."

At the same time, Capcom raised its net sales (revenue) forecast for the year from ¥97 billion ($939 million) to ¥101.5 billion ($983 million), an increase of 4.6 percent. Capcom attributed the uptick in its sales forecast mainly to "strong sales" of Monster Hunter 4, as well as the "highly successful" slot-machine game Monster Hunter Gekka Raimei.

"Sales are expected to be higher than one year earlier due in part to the launch of major titles," Capcom said. "However, Capcom anticipates declines in operating income, ordinary income, and net income because of increases in the cost of sales and selling, general, and administrative expenses."

One of Capcom's latest major titles was Dead Rising 3 for the Xbox One. That game has shipped over 1 million copies to date.

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