Business Performance (Japan GAAP)

Here we breakdown our consolidated business results for the nine months ended December 31, 2024 with graphs and diagrams.

In the nine months ended December 31, 2024, Capcom Co., Ltd. (the "Company") actively pursued investments for growth focused on the ongoing enhancement of digital sales in order to further evolve and expand within the global market. In addition, as part of its human resources investment strategy, which is one of the Company’s top priorities, it continued to invest in human capital toward securing and fostering human resources who will support the future, with the aim of stable and sustainable growth. With these kinds of management policies, the Company has been working to continue strengthening its development and technological capabilities, including through the acquisition of a 3DCG production company with strengths in animation production for consumer game development as a subsidiary. Furthermore, with regard to the remuneration system for directors, in order to link remuneration for directors more closely to business performance and further share value with shareholders, the Company implemented measures aimed at continuously increasing corporate value over the medium to long term, such as by introducing a performance-linked stock remuneration system.

Regarding business performance, during the nine months ended December 31, 2024, in addition to the release of popular series titles, sales were dominated by catalog sales of major titles released in the previous fiscal years in the core Digital Contents business. Due to the timing of the upcoming fourth-quarter release of Monster Hunter Wilds, a major new title in the Company’s flagship series, total sales volumes in the Digital Contents business were 30.53 million units, down from 32.6 million units in the same period of the previous fiscal year during which Street Fighter 6 was released. However, sales volumes of catalog titles were 28.61 million units, up from 26.7 million units in the same period of the previous fiscal year, due to the Company’s efforts to promote its digital sales strategy. As a result, the Company sold 246 titles in 225 countries and regions, contributing to enhancing the value of the Company’s brands.

The Company also worked to increase earnings through efficient operation of amusement arcades and the promotion of store openings in new store formats in Arcade Operations, as well as through the continued introduction of smart pachislo machines and the utilization of the Company’s popular intellectual properties (IPs) in Amusement Equipments. In addition to such activities, the Company utilized its highly popular brands in film and television productions, licensed merchandise, and esports.

As a result, earnings for the nine months ended December 31, 2024, made favorable progress, with consolidated net sales of 88,853 million yen (down 16.3% year on year), operating income of 31,020 million yen (down 35.0% year on year), ordinary income of 31,417 million yen (down 36.5% year on year), and net income attributable to owners of the parent of 23,066 million yen (down 33.4% year on year).

In the Digital Contents business, the Company released physical versions of Dead Rising Deluxe Remaster and MARVEL vs. CAPCOM Fighting Collection: Arcade Classics in November, following prior digital releases of each title in September. In addition, the Company also released Resident Evil 2 onto Apple devices, representing a new title in the Resident Evil series for that platform, and garnering ongoing support from series fans.

Regarding catalog titles, anticipation for Monster Hunter Wilds, the latest title in the series scheduled for release in February this year, provided momentum for ongoing growth in the sales of Monster Hunter World: Iceborne and Monster Hunter Rise; at the same time, cumulative sales of the series overall surpassed 100 million units worldwide, contributing to enhanced brand value for Monster Hunter titles. In addition, the Company conducted proactive promotional campaigns to gain wider recognition of its IPs and acquire new fans, focusing primarily on sales for series titles, such as Resident Evil 4. Furthermore, the Company continued to strengthen coordination between its games and esports activities to pursue wider brand recognition and an expanded user base for Street Fighter 6, the major new title in its flagship series released in the previous fiscal year.

As a result, progress toward achieving the full-year plan proceeded as expected. Although total sales volume for the nine months ended December 31, 2024, decreased compared with the same period of the previous fiscal year when Street Fighter 6 was available, sales of catalog titles increased year on year, supporting earnings.

In Mobile Contents, Monster Hunter Now, which was released in the previous fiscal year, continued to gain in popularity among a wide base of users, as cumulative downloads exceeded 15 million, contributing to greater penetration and increased value for the Monster Hunter brand. In addition, the Company released Monster Hunter Puzzles: Felyne Isles (for iOS and Android) globally in June, which has achieved over 1 million cumulative downloads.

As a result, the segment earned net sales of 58,534 million yen (down 28.1% year on year), and operating income of 29,247 million yen (down 38.2% year on year).

In Arcade Operations, in addition to a recovery in inbound tourism and out-of-home spending after the close of the COVID-19 pandemic, consumer lifestyle habits are undergoing change. As such, factors such as efficient operations at existing stores and store openings in new formats led to an increase in the number of visitors, which contributed to earnings expansion. Moreover, the Company worked to maximize the appeal of its brick-and-mortar stores by holding events and creating synergies with other businesses.

During the nine months ended December 31, 2024, the Company opened Plaza Capcom Oyabe (Toyama Prefecture) in April, and a new area at Plaza Capcom Ikebukuro (Tokyo) in May. Additionally, in November the Company opened Capcom Store Annex Marine Pia Kobe (Hyogo Prefecture), a retail store that sells merchandise featuring the Company’s popular characters, bringing the total number of stores to 52.

As a result, the segment earned net sales of 16,552 million yen (up 19.5% year on year), and operating income of 2,258 million yen (up 45.9% year on year).

In Amusement Equipments, the pachislo market remained solid, driven by customer demand for smart pachislo machines. Street Fighter V Chosensha no Michi, released in June, sold 5 thousand units, while Onimusha 3, released in October, sold 11 thousand units. Further, Monster Hunter Rise, the new pachislo model released in November, sold 19 thousand units, which contributed to earnings. Sales of Strike the Blood, which was released in March, also grew.

As a result, the segment earned net sales of 10,242 million yen (up 27.7% year on year), and operating income of 5,083 million yen (up 11.5% year on year).

In Other Businesses, beginning in April, the Company bolstered its structure by integrating internal organizations to accelerate collaboration between esports and the licensing business, with the aim of improving the brand value of its titles.

With this structure in place, the Company utilized its popular title Street Fighter 6 and began the global Capcom Pro Tour 2024 in June, while also holding the team-league Street Fighter League: Pro-JP 2024 in Japan from August, and Street Fighter League: Pro-US in the US 2024 from October, leading to heated battles unfolding across these various competitions. Moreover, the Company worked to further promote its esports tournaments, announcing that, continuing from the previous season, it will offer a grand prize of $1 million USD at Capcom Cup 11, the championship tournament for the Capcom Pro Tour 2024, while also holding the championship tournaments for the 2024 season at Japan’s famous National Sumo Stadium, Ryogoku Kokugikan.

Additionally, Mega Man: Start, part of the Amazon Prime Video animated series Secret Level, was streamed worldwide in December. Furthermore, the Company focused on promoting various events and collaborations in conjunction with the 20th anniversary of the Monster Hunter series, as well as focusing on movie and television adaptations of its major IPs and developing character merchandise for its popular titles.

As a result, the segment earned net sales of 3,524 million yen (up 22.6% year on year), and operating income of 1,250 million yen (up 94.8% year on year).

Total assets as of the end of the third quarter increased by 7,966 million yen from the end of the previous fiscal year to 251,443 million yen. The primary increases were 15,523 million yen in work in progress for game software, 1,113 million yen in merchandise and finished goods, as well as 1,057 million yen in tangible fixed assets, net of accumulated depreciation. The primary decrease was 10,681 million yen in accounts receivable – trade.

Total liabilities as of the end of the third quarter decreased by 22 million yen from the end of the previous fiscal year to 48,372 million yen. The primary increases were 3,176 million yen in current liabilities, other, and 996 million yen in electronically recorded monetary liabilities due to an increase in sales deposits, etc. The primary decrease was 5,798 million yen in accrued bonuses.

Net assets as of the end of the third quarter increased by 7,989 million yen from the end of the previous fiscal year to 203,071 million yen. The primary increases were 23,066 million yen in net income attributable to owners of the parent, and 1,718 million yen in cumulative translation adjustments. The primary decrease was 16,835 million yen in dividends from retained earnings.

The forecast for the consolidated business results for the current fiscal year ending March 31, 2025, remains the same as what was projected at the financial results announcement on May 9, 2024.