Biggest Story of the Day

Capcom issues profits warning, cuts ties to Western developers, Scraps projects

Profits for the current financial year will be about half of what was initially forecast, Capcom has warned.

This is in part due to expenses associated with a freshly announced company-wide restructure.

That was far from the only factor, however. The company also blamed “drastic changes in the industry’s market environment”, the “concentration of AAA titles in the hands of few foreign competitors” and its “delayed response to the shift to digital media in the Home Video Games business”.

More worrying for Western devs is Capcom’s assertion that it has suffered a “decline in quality of titles outsourced to overseas developers” which has forced it to alter its strategy – it will now place shift to internal game R&D and increase its post-release DLC.

Earlier this year Capcom released DMC: Devil may Cry, which was developed by UK studio Ninja Theory. It was the first game in the series to be developed outside of Japan and fell short of commercial expectations.

Furthermore “work in progress in game software” has been “strictly re-evaluated for business restructuring”. In other words, it is cancelling games.

Capcom had previously forecast net income of ¥6,500m for the year ending March 31st. This has now been revised to ¥2,900m.

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Capcom has once again revised down sales of its big games for the last financial year - and blamed the decision in part on "excessive outsourcing".

In a note to investors warning of a "special loss" incurred after a "strict review of games under development", Capcom revealed new expected sales for the games it released in 2013 financial year.

Its revised forecast for sales of Resident Evil 6 from 5 million to 4.9 million. Once upon a time the Japanese company had hoped to shift 7 million copies of the action shooter.

Its revised forecast for Devil May Cry is 1.15 million, down from 1.2 million, itself down from an expected 2 million.

Capcom identified three reasons for these further revisions: a "delayed response to the expanding digital contents market"; "insufficient coordination between the marketing and the game development divisions in overseas markets"; and "decline in quality due to excessive outsourcing".

The latter point - the "decline in quality due to excessive outsourcing" - is sure to make UK studio Ninja Theory wince. It made Devil May Cry at the request of Capcom, which wanted a game different in style to the previous made-in-Japan titles in the series.

Capcom's "countermeasures", as it calls them, to its lower-than-expected financial performance, include increasing DLC and shifting to internal R&D. It has also "strictly re-evaluated" work-in-progress games as part of a business restructure, which has resulted in a 7.2 billion yen (£48.1 million) special loss. In other words, it cancelled a number of unannounced titles.

All told, Capcom halved its expected profit for the 2013 financial year from £43.4 million to £19.4 million.

Capcom has a number of games due out in the current financial year, including some that have been outsourced.

Lost Planet 3, made by Legendary: The Box studio Spark Unlimited, is one. It was recently delayed by two months to the end of August for "business reasons".

So for games like Lost Planet and Dead Rising, ORC, even DMC this will have implications. Also outsourcing leading to a quality decline isn't just for outsourced games but for work on games like RE6 where they outsource many aspects of its development in the way AC4 uses 7 studios in conjunction. Now Capcom seem to be saying that they will be internalising things more, less outsourcing possibly means smaller less bloated productions compared to games like RE6, of higher quality but they seem to be inferring that all their games must have DLC potential.

There's also probably some implications for Wii U as it would probably be number 1 on their skus to scrap list.

I would have bought the SEGA Pluto.

You know, I've said it before and I'll say it again....SEGA's problem was that while they made lots of original games and games of high quality, most of their Dreamcast era stuff lacked mass appeal. THAT'S why they didn't do so well. Its fine --GREAT, even-- to have lots of original quirky games, but you also need the Metroid Prime's and the Halo's and the Final Fantasy's that are not only high quality but titles that can sell consoles. The only title I could have seen doing that on Dreamcast was Shenmue.

gamingeek said:

Oaspro said:

For my part I said I've always enjoyed Nintendo's hardware and third party games.  I am just sick of Nintendo's games, (with three notable exceptions)..

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It's fine if people groan when Nintendo announce a sequel but when God of War X, Gears of War X, Halo X and Splinter Cell X and Call of Duty X etc get announced there should be a similar reaction IMO.

They bitch endlessly (as do I). You clearly don't listen to gaming podcasts.  As stated earlier, every franchise listed there I once loved and bought every instance of but now no longer buy because the are re-hashed to the point of irrelevance.  I skipped ODST and Reach for example, picked up Halo 4 out of curiosity of what a new studio could do with the franchise.

Old things get older with time GG.  This is not a special thing that only Nintendo gets criticized for, you are just more sensitive to criticism of Nintendo because of your preferences.

gamingeek said:

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The problem with Nintendo is that when people say they want new Nintendo games usually they mean that they want Nintendo to make Xbox or Sony style games.

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What exactly do you mean by Xbox or Sony style games? Both consoles have a ridiculous scope of games from small one-man projects to AAA titles?  When I think of "Sony" games I think of Journey and Uncharted.  When I think of Xbox games I think of Limbo and Gears.  Maybe in the last gen you could have categorized those consoles as having a limited number of game types, but back then the Gamecube had just as many of the same types of games (I know, I bought them on the GC whenever it was an option).

And why do you continue to construct strawmen to argue with when you have real people, right here, willing to have a conversation?  Whenever we have this conversation it always, "people this and people that".

Ravenprose said:

MS are bastards. Okay, a couple weeks ago, my sister's laptop broke. I took the HDD out of her broken laptop, and put it in one of my old retired laptops. It worked fine for about 3 weeks. Now MS is claiming it's a counterfeit OS, and is now demanding her to pay over $100 for the copy she already bought years ago. Bastards.

Usually when you call them on OS licensing they give you a pass.  Have you tried just installing it and then calling the 800 number they give you to validate a key?

I'd give the system restore disks a try anyway.  Drivers etc... are a lot easier to wrangle these days than they used to be.

Speaking of Intelligent Systems, they -----BETTER----- be the ones developing Mario and Luigi: Dream Team or I may very well boycott!

EDIT: Oops! Intelligent Systems does PAPER Mario. Alpha Dream does Mario and Luigi... and they ARE doing Dream Team, so the game is in good hands!

**Breathes easier!**

Grandfather in the hospital, he is not swallowing on his own. May need tube. I am in Indy so it sucks that I cant be there. This is my grandfather whos mind has been gone for years now, hes basically just a human shell. As sad as it is I am far more worried about how my grandmother is taking it.

GG man I feel for you and your back pain. About all the patients I see are patient with back problems and the issues they have freak me out, I dont know if I could handle it. Today one dude, around our age, works 12 hours a day in pain, comes home dead tired and cant move cause his back pain. But he stills gets on the floor to play with his kids even though it is excruciating for him to do. Man. Stay strong GG.

Dvader said:

Grandfather in the hospital, he is not swallowing on his own. May need tube. I am in Indy so it sucks that I cant be there. This is my grandfather whos mind has been gone for years now, hes basically just a human shell. As sad as it is I am far more worried about how my grandmother is taking it.

I hope she can cope with it as well as you are.