In the past, this was a highly volatile industry where a new release in one fiscal year would drive large earnings growth, with a comparative drop in earnings in the next fiscal year. Recently however, we no longer see this pattern in Capcom’s earnings. Further, the company has achieved increased operating profit of over 10% each year. What has driven this?
In the past, we primarily sold games at physical retail stores, where we would typically sell a new game that was placed on the limited space of stores shelves for a period of approximately six months. However, accompanying the digital shift, in recent years game
makers have become able to sell games directly online, which allows us to carry out pricing strategies as well as discounts on past series titles in conjunction with the launch of a new release. Thanks to this, unit sales continue to grow even today for titles such as Resident Evil 7 biohazard, which was released seven years ago, as well as for Monster Hunter: World,
which was released six years ago. Further, we thoroughly manage our medium-term development schedule by maintaining a 5-year development map that enables us to effectively time the release of new titles. This has led us to think that the game industry
overall has shifted to one of low volatility due to a change in our business model, via which we can continue to sell games over the long term as the ratio of digital title sales increases.
