Capcom is experiencing financial difficulties with profits being cut by half of their predicted outcomes, and the company has cited excessive outsourcing and underutilization of digital markets as the cause.
This year marks the 30th anniversary of Capcom's presence in the video games industry, and in those three decades the company has delivered countless memorable titles across nearly every platform.
Despite its thirtieth anniversary, 2013 is actually proving to be an unfavorable year for Capcom in the way of financial earnings, and the company has recently made a few critical decisions to try to rectify the losses.
According to a presentation on Capcom's Investor Relation's page, the company's annual profits for 2013 are projected to be half of the initial predicted forecast, forcing Capcom to reduce the yearly profit projections of recent flagship AAA releases like Devil May Cry (DmC) and Resident Evil 6.
Capcom has apparently identified the potential causes of the profit loss, blaming the losses on the recent restructuring efforts that the company took to keep up with "drastic changes in the industry's market environment".
The company also cited the "delayed response to the shift to digital media in the home videogames business" as a key contributor to their current situation, and has avowed to address this in the future.
In response to the lowered projections and losses, Capcom is adjusting its approach in critical ways that include the shift from Western developers to internal R&D.
Capcom cites the "decline in quality of titles outsourced to overseas developers" as a direct correlation to their lowered profits, prompting them to focus more on internalizing games development.
Another key example of Capcom's justification for the shift in development is the poor sales of the recent Devil May Cry (DmC) reboot. The game was developed by UK studio Ninja Theory, and despite the fact that it was generally well-liked by reviewers, DmC failed to meet the company's projected profit earnings.
As a result, Capcom has been forced to lower their projections for DmC–lowered to 1.25 million from the initial expectation of 2+ million sales.
Capcom has also stated that it is re-evaluating games that are currently still in development, and that they may cancel certain titles that don't fit their current business structure: "work in progress in game software" has been "strictly re-evaluated for business restructuring".
This news is quite worrying to gamers who are anticipating the recently announced Duck Tales HD remake of the beloved NES classic, since Capcom has chosen the American studio WayForward to develop the game. In light of the company's recent strategic overhaul, the game may change hands in the way of development or be canceled altogether.
In any case, it's somewhat alarming to see Capcom make these kinds of decisions in order to adapt to their profit losses, however only time will tell if this is a good or bad move for the company as a whole.
In the way of gaming, Capcom may in fact provide higher quality titles with internal developers, or we may get games that are heavily saturated in DLC that nobody wants to shell out the extra cash for.