Capcom annual profits fall 73.1%

Weak Dark Void and Bionic Commando sales, flagging arcade division create unfavorable year-over-year comparison for Japanese publisher--which still posts $23.8 million in net income.

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The fiscal year ending March 31, 2009, was a good one for Capcom. Two megahits--Street Fighter IV and Resident Evil 5--sent the Japanese publisher's revenues soaring. The critically acclaimed games sold over 2 million and 4 million units, respectively, helping the company reap over $1 billion in annual sales.

Once pegged as a sure-fire hit, Dark Void was a critical and commercial disappointment for Capcom.
Once pegged as a sure-fire hit, Dark Void was a critical and commercial disappointment for Capcom.

Unfortunately, the 12 months ending March 31, 2010, were a different story. For that period, Capcom reported annual revenues fell 27.3 percent to ¥66.84 billion ($734 million, £500 million), with operating income dropping 61.8 percent and net income plummeting 73.1 percent to ¥2.17 billion ($23.8 million, £16.2 million). The publisher's Home Video Game division saw net sales fall 30 percent from ¥62.9 billion ($690 million, £470 million) to ¥44 billion ($482 million, £329 million) and operating income sink 52.1 percent from ¥16.4 billion ($180 million, £122 million) to ¥7.9 billion ($87 million, £59 million).

Though it had predicted big sales for Dark Void, Capcom didn't prevaricate about what went wrong with its self-described "sluggish financial results." In a statement, the company said "three software titles that were released in the overseas markets, namely Bionic Commando (for the PlayStation 3, Xbox 360), Resident Evil: The Darkside Chronicles (for the Wii), and Dark Void (for the PlayStation 3, Xbox 360), underperformed their sales and remained weak." However, Monster Hunter Tri, Resident Evil 5: Alternative Edition, and Sengoku Basara Battle Heroes "performed satisfactorily," according to the company.

Capcom's arcade department saw an "extraordinary loss," which it blamed on overall decline in consumer spending and consumers pushing into "alternative at-home entertainment." Revenue in its Arcade Operations division fell 11.3 percent from ¥13.5 billion ($148 million, £100 million) to ¥11.9 billion ($131 million, £89 million), but operating income shot up 162.9 percent to ¥590 million ($6.48 million, £4.4 million). Arcade Games Sales revenue fell 71.6 percent from ¥8 billion ($86 million, £59 million) to ¥2.3 billion ($24 million, £17 million), with the division losing ¥203 million ($2.23 million, £1.5 million).

Mixed financials aside, Capcom is bullish about its current financial year, which ends on March 31, 2011. The company predicts sales of Super Street Fighter IV, which has already shipped 1 million units, and next week's Lost Planet 2 will boost annual net sales to ¥95 billion ($1.03 billion, £710 million). The company expects operating income to increase to ¥15 billion ($163 million, £112 million) and ¥8 billion ($163 million, £112 million) in profits for the 12-month period.

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