Gaming Capcom losing money on Gamecube

[BlueGender]

[i][b][u]Sales of key games fall short of original expectations.[/u][/b]

According to Bloomberg Japan, Capcom has declared 19.5 billion yen ($163 million) in losses for its 2002 fiscal year. While its losses where originally estimated at 12.7 billion yen ($106 million), Capcom explained that its major titles sold below expectations. Biohazard 0 (Resident Evil 0) for the Nintendo GameCube was expected to sell 1.42 million copies but sold only 1.12 million. Devil May Cry 2 for the Sony PlayStation 2 sold 1.4 million copies instead of the expected 1.66 million. Clock Tower 3, which was also released for the PlayStation 2, sold 250,000 copies instead of the expected 450,000. Capcom released Chaos Legion (PS2) and P.N. 03 (GC) in March as part of an effort to meet its sales goals for the year, but the sales of the additional games did not offset its losses.

The company's losses were also attributed to the cancellation of projects that were not likely to be profitable. Capcom has terminated 18 games out of approximately 100 currently in development. This is the first time that Capcom has canceled nearly 20 percent of its projects. The development funds spent on these terminated projects will be declared as special losses, totaling 5 billion yen ($41 million). No specific games were revealed in the cancellation announcement.

Capcom vice president Heiji Oshima said that one of the reasons for the decline in sales was some of its titles simply didn't suit the market's demand. From now on, Capcom will strengthen its evaluation structure in order to better assess projects before they go into development. Capcom will also begin to frequently evaluate games in the middle of their development and immediately cancel any projects that may not suit the interests of the market.

Oshima also said that Capcom currently does not have any plans to merge with another company, although he does not know about the future. Oshima believes that Capcom has enough competitive edge to survive on its own at the current time. (article gotton from GameSpot.com)[/i]

[size=1][color=blue] It is a real shame that Capcom is losing so much money. I myself think that Capcom is the best 3rd party company out there. I am a huge Nintendo fan but I think it is in Capcoms best interst to get Resident Evil off the Gamecube as an exclusive.I think they would make much more money if Resident Evil was not exclusive to any console and it appeared on all 3 major consoles I think they would make a lot more money because they would be selling to Gamecube, X-Box and, PS2 gamers. What do you guys think about this?[/size][/color]

[Semjaza]

I'm not sure what in this press release, or anything Capcom has said concerning this, makes you think it's targetting GC releases... Especially considering the differences between sales on the PS2 versions compared to what they wanted is even bigger. Onimusha 2 did rather badly here by comparison. Certainly dropped in price fast.

As it is, RE is a slowly dying franchise sales wise as it is. It's dipped down since RE3 in general. RE4 is the second most anticpated title in Famitsu's Readers Poll right now (behind DQ8), so I am not so worried about how the first[i]real[/i] sequel will do. People are getting tired of RE (especially considering the supposedly "lesser" Silent Hill is doing so well)... And RE4 might rejuvenise that. If not, I think it won't do well anywhere really.

I don't know how they ever expected Clock Tower 3 or PN 03 to do so hot as it is... Especially considering these two haven't even been out all that long by comparison to the other games the article mentions.

I really doubt putting RE on everything will do much. I'm not convinced RE Zero would have sold super well on PS2 either. It would have sold more due to the bigger userbase, but I doubt it would be much higher ratio wise (plus, they have to be getting some sort of kickbacks from Nintendo in addition to that - I don't buy this happy lovey "we love eachothers philosophies so lets make games!" Mikami and Miyamoto stuff 100%).

Anyway, Capcom cancelled like 18 titles due to this and is still currently making 80 more. Most of the cancelled titles were on GBA, where they are making the most sales (and profit apparently) as it is, so go figure.

Plus, most companies aren't making their quotas as it is. The economy isn't exactly wonderful in Japan right now.

[James]

[color=#808080]I'd have to agree with Semjaza on that one.

Capcom hasn't changed its plans for GameCube whatsoever. As a side issue, a lot of sites are reporting that "everything after RE4 may not be exclusive". Geez -- they say it as if it's a new decision. They're wrong.

Capcom's position on that aspect hasn't changed at all. Capcom [i]never[/i] planned to have "exclusives" after RE4 as it is. I mean, RE4 is where the agreement went up to -- no further.

In addition, Semjaza is right about RE0. This game may have sold in greater numbers on PS2, but only because of that console's higher userbase. It may very well have not met Capcom's expectations had it sold on PS2 anyway.

Also, I'd say that Capcom [i]are[/i] receiving an added benefit for working with Nintendo. Primarily, there'd be some shared development costs (on games like Zelda for GBA). But also, with games like RE, I'd say that Nintendo has significantly cut its licensing fees for Capcom.

And of course, you have the added benefit that GameCube games are essentially piracy-proof. That is a bigger financial incentive than many publications suggest (and many totally ignore it).[/color]

[Semjaza]

I was just reading some financial report today. Gamecube, Xbox and PS2 were all mentioned... and the only one that met the sales targets was Gamecube. In fact, it passed them by a small amount. So really, I doubt GC is what's causing them to lose money at this point.

Xbox sales were like 1/3 of what was expected and PS2 sales were a bit low as well.

[Guest Steiner]

I always thought that capcom would loose money by goin purely with Nintendo, i mean people have gotten used to the RE games on the ps2 and know what thier all about but on the GC people are abit skepticle(dosnt know how to spell it!) about buying the games on GC but now that people have played them and the word has gotten out about how good the GC versions are more people will go out to buy them.