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

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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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