Capcom bounces out of red

TOKYO--After a string of unprofitable years, Capcom is no longer a lurching zombie filled with red ink. Capcom has announced that it earned a net profit of 3.6 billion yen ($33.5 million) for the business year that ended March 31, 2005. That's a major rebound from FY2004, when it took a loss of 9.2 billion yen ($85.7 million), 7.73 billion ($67.74 million) of which came as a one-time loss suffered by its banking house subsidiary.

For the past three years, Capcom has been striving to improve its business structure. The company has struggled to close down unprofitable operations and focus its resources on consumer game research and development. The strategy seems to have worked, as revenue was up by 25 percent to 65.9 billion yen ($614 million), and the company had a recurring profit of 7.4 billion yen ($69 million) in FY2005--more than nine times what it earned in FY2004.

In Japan, Grand Theft Auto: Vice City, which Capcom picked up the Japanese rights to from Rockstar Games, sold well for an imported title, and Monster Hunter G was also a success. Mega Man Zero 3 and Mega Man Battle Network 5 also sold well throughout the year. On the flip side of the coin, some anticipated titles, such as Resident Evil Outbreak File 2, Devil May Cry 3, and Viewtiful Joe 2, saw slack sales.

In overseas markets, however, Resident Evil 4, Devil May Cry 3, and Resident Evil Outbreak were popular enough to increase Capcom's bottom line. Sales of budget reprint titles also contributed to the company's profits.

In America, Mega Man Anniversary Collection, Mega Man Battle Network 4, and the Street Fighter Anniversary Collection proved to be winners for the company. On the other hand, Onimusha 3 failed to reach Capcom's sales expectations.

Looking ahead, Capcom expects a net profit of 3.9 billion yen ($36.3 million) for the current business year starting April 1. The company hopes to strengthen its multiplatform offerings, as well as increase sales in overseas market.