For the financial quarter beginning April 1st and ending June 30th, Capcom didn’t do so hot, reporting a decline in both sales and profits. Its total sales were $104 million, down 24% compared to the same time last year, and its profits were down as well, forcing Capcom to take a $6.9 million loss.
Capcom has a few reasons for its investors as to why its business has suffered in 2016 so far. It points to foreign exchange loss as one potential reason, as well as a lack of major video game releases. One look at Capcom’s recent output, and it’s easy to see that the majority of the studio’s releases this year have been remasters or failed experiments, like the critically panned Resident Evil multiplayer spinoff Umbrella Corps. And the big games Capcom did release in 2016 haven’t been huge successes, with Street Fighter V missing its sales target by a considerable margin.
Another reason why Capcom’s profits were down this quarter is because the company is spending more money than usual. It has apparently “increased development” at its in-house studios, which could indicate that there are a number of unannounced Capcom games currently in the works.
Capcom expects to perform better in the coming quarters thanks to the release of some major games. The Xbox One and Windows 10 timed exclusive Dead Rising 4 will be Capcom’s holiday 2016 game, and in early 2017, it plans on launching Resident Evil VII. The latter could mean especially big things for Capcom, if its record-breaking demo is any indication.
These major new releases should help Capcom bounce back, but so will its increased focus on remasters. While not all of Capcom’s remaster projects have been runaway successes, both Resident Evil HD Remaster and Resident Evil 0 HD Remaster have sold over a million copies, and the process of creating a remaster is a minimal expense compared to developing a brand new game. So while remasters alone can’t help Capcom be a strong business, they can help it regularly release content without having to burden itself with the long, expensive development cycles required by original projects.
Capcom’s last quarter may disappoint investors, but it has some high profile games on the horizon that could potentially turn things around. Resident Evil VII and the Resident Evil 2 remake will likely be big sellers, and it apparently has some unannounced projects in development as well. So don’t count Capcom out just yet, even if this past quarter wasn’t the greatest moment in the company’s history.